Vladimir Adamovic 10.08.2013
Marketing
Situation Analysis
Company history and overview
Best Buy was established in 1966 by company’s founder Richard M. Schulze. The first store
was opened in St. Paul. Minnesota. Their goal was to capture twin cities home and car stereo
retail market. The company was grown steadily during the years, inspired by many innovations.
Their focus was on enhancing customer’s enjoyment of technology. Since then the company was
expanding territory and market share. In the mid-1980s in order to stand out of the competition
Schulze came out with an idea to introduce Concept II stores. The idea was that the traditional
superstore format was out of sync with the needs or preference of most shoppers. Therefore, the
revamped Best Buy stores would feature well-stocked showrooms, fewer salespeople, more self-
help product information, answer centers and one stop purchasing. This concept proved to be a
major hit. From 1989 to 1992 corporate sales rose annually by 23 %, while industry expanded
yearly by 3 %. In 1993 revenue catapulted for the first time beyond the 1 billion dollars. The
massive make over happened in 1997, scaling down expansion and reducing inventory. In 1999
Best Buy invested 10 million in consumer electronics information website etown.com. In the
early 2000s the company started selling personalized computers (Pederson 2013).
Today, Best Buy Co. Inc. is multinational retailer and developer of technology, products and
services. The company’s products include consumer electronics, computing and mobile phone
products, entertainment software, appliances and related services. Best Buy operates throughout
many countries in North America, Europe, and Asia. It is headquartered in Richfield, Minnesota
and employed over 167 000 people. Best buy Co. Inc. operates under different brand names
throughout the world. In the US they are operating under brand names Best Buy, Best Buy
Mobile, Geek Squad, Magnolia Audio and Video and Pacific Sales.. The International segment
include stores in Canada under brand names Best Buy, Best buy Mobile, Cell Shops, Future
Shops, Connect Pro and Geek Squad. In Europe stores operate under brand names The Carphone
Warehouse, The Phone House, and Geek Squad. China stores operate under brand name Five
Star and all Mexico stores operate under brand names Best Buy and Geek Squad.
The company reported revenues of 50,705 million during the fiscal year ended March 2012,
an increase of 1.93 % over 2011. The operating profit was 1,085 million in 2012 which is
decrease of 54,3 % compared to 2011. The net loss was 1,213 million in 2012 (Company profile,
2013).
