Executive Letter  



Industry Analysis

Competitive Analysis
Threat of New Entrants…
Power of Suppliers… 
Power of Power
Threat from Substitute Products.
Rivalry among the Existing Competitors… 


Alternatives Considered..


Financial Analysis…
Best Buy Co., Inc. is a technology and entertainment retailer based in the United States. It is active in the United States, Canada, China, Europe, and Mexico. Best Buy, based in Minnesota, owns and operates 11 different brands of retail locations and websites.
With a market capitalization of $16.53 billion, Best Buy is the largest consumer electronics store in the United States. Best Buy reported $45 billion in revenue for the fiscal year ending February 28, 2009.
Company Mission – Estefani

Best Buys mission was to make technology deliver on its promises to customers.

Company Overview – Estefani

Best Buy was originally known as Sound of Music. Incorporated in 1966, the company started as a retailer of audio components and expanded to retailing video products in the early 1980s with the introduction of the videocassette recorder to its product line. In 2020 the company launched its online retail store: BestBuy.com this allowed customers a choice between visiting a physical store and purchasing products online.

Sound of Music grew to become one of the largest consumer electronics companies in the US. Growth for the firm was mainly through global expansion and acquisitions of smaller product service-oriented firms that relied on differentiation strategy. Best Buy reached one billion sales in 1992 and was one of the top 10 performing stocks from 1990 to 2000(Forbes). Also, Best Buy continued international expansion in Canada, Mexico, China, UK, Turkey by acquisition and opening stores under Best Buy brand name.

However, due to the birth of online retailing, technology advancements, and poor leadership within the company, Best Buy experienced a significant downfall. Thus, it closed down most of its international stores or consolidated stores under its brand name. The new CEO  combat the downfall suggested a Renew Blue strategy to turn around the situation. 
In 2020 the company launched its online retail store: BestBuy.com this allowed customers a choice between visiting a physical store and purchasing products online.

Industry Analysis – Richard 
Best Buy’s PESTEL study can be used to examine the macro and distant environment in which the firm operates in order to find factors that could affect its performance and competitiveness. PESTEL, also known as PEST analysis, is a tool that is used before conducting a SWOT analysis. It informs a corporation about market trends that determine client needs, allowing them to influence a company’s future sales.
Best Buy received backlash from the network in 2011. The organization, which is based near Target, backed a Minnesota up-and-comer who opposed same-sex marriage. Best Buy redid their use tactics in response to the poor response. They formed a board of trustees to promote welcoming and significant ways that are supported by customers, colleagues, and partners. In terms of item returns, including guarantees and fixes, Best Buy is at risk. Best Buy is at risk if an individual is injured or dies as a result of using these things. It’s impossible to say how much this will affect Best Buy’s bottom line, but claims will almost certainly cause complications.
The majority of this company’s operations are based in the United States, where there are no unspoken economic conditions. The recent economic slump has undoubtedly impacted Best Buy’s business, and the corporation is confronting issues related to consumers at multiple market points. Because of the economic downturn, consumer behavior has changed dramatically and for the better. Consumers will require additional time to acclimatize to new reality. Best Buy required its employees to voluntarily leave the company due to the economic situation in 2008. The corporation was able to settle down inside the market to some extent thanks to this technique. Toward the end of the fiscal year 2008,This company’s revenue showed amazing consistency and stability, proving that the decision to downsize the workforce was correct.

Best Buy sells electronics and will match any competitor’s price. These products are purchased by price-conscious customers who compare prices before making a purchase. Best Buy has a mobile phone store called BestBuy Mobile, which sells phones, accessories, and contracts. They also have GeekSquad, which is a group dedicated to repairing gadgets, particularly computers and laptops. With many grant foundations, the corporation is also involved in the community. Many of the foundations urge children and teenagers to form strong educational bonds in order to mature into competent individuals.

To expand its consumer base, the corporation employs cutting-edge technology and devices. It provides a future proofing program that allows consumers to select the technology that best meets their needs. It also keeps up with the latest technological advancements. It also employs website encryption to protect customer transactions. Other technologies used by the company include click stream, which improves transaction security while providing a better shopping experience.

Over the last decade, Best Buy has been sued multiple times. A lawsuit was filed in California in 2005 alleging that the corporation discriminated against women. Best Buy has recently adjusted its procedures to improve the relationship between new and former employees.A lawsuit was brought against the firm in the United States District Court in California in 2005. The corporation has been accused of discriminating against female employees, particularly African-American and Latino women. The corporation was accused of denying them good sales positions and promotions because of their ethnicity, although this was rejected by the company.To strengthen its employee interaction, the corporation committed to adjust its corporate and personal policies as well as processes. The corporation is working to improve fair job opportunities in its stores around the country. Furthermore, it works hard to follow all of the federal, state, and local governments’ rules, regulations, and policies in the areas where it operates.


Industry Analysis – Estefani

Porter Five Forces are a big part when it comes to doing the industry analysis of a company. The Five Forces help to understand how the five competitive forces influence profitability and develop a strategy.

The threat of new entrants is low because this type of business requires an enormous investment. Also, the buyers always look for a well-established name that if something goes wrong with the product, they can go back and exchange it or have better deals, that is almost impossible for new entrants to have better deals than Best Buy.

The power of suppliers is high because Best buy gets the products at a low price directly from the manufacturers. Suppliers offer products that are differentiated. Product differentiation can create a competitive advantage for the product’s seller and ultimately build brand awareness. Examples of differentiated products include a good quality product with an affordable price and music for free for three months.

The power of buyers is low because the buyers from Best Buy are mostly families or a single customer. But, on the other hand, buyers face low costs.

The threat from substitute products is moderate because the buyers cost of switching to the substitute is high. In this case, a substitute would be Amazon, Target, and Walmart. Buyers can also find good deals in those places but what makes Best Buy different is the customer service.

There is high rivalry within the competing firms due to strong price competition from retailers and online operators. Best Buys main competitors are Amazon and Walmart. These competitors goods provided are much diversified into different types of products besides consumer electronics, which makes them less category-dependent. Due to the broad variety of customer electronics products offered by all competitors, there is low customer retention and strong competition for maintaining their market share. There is one truth that no one can beat Best Buys quality customer service and electronic gadgets.

SWOT Analysis – Jazmine 


Numerous retail locations in the United States (1,199+) and International (2,800+)

Providing both low-end and high-end electronic products for consumers

 Strong marketing expertise in electronics sector

Bestbuy.com online retail store, expanding customer reach

Adoption of customer-centric innovation


Heavy dependency on Brick-and-Mortar locations

Rapid technological Innovations leading to shorter product life cycles, increased employee training costs, increased room for employee mistakes; decline in net income and operating margins

Limited profit margin

Operating expenses in stores are higher than other online retailers such as Amazon and Walmart

Highly dependent on supplier credit: based on financials there is an increased Inventory count and 240% increase in Accounts Receivable, less available cash and increased long-term debts leading to potential risk for losses due to bad debts


Growing market for electronics such as smart phones and video games

Global expansion

Technology revolution

Popularity of eCommerce can increase sales volume without building new stores

Bankruptcy of Cricut City


Digital delivery of electronic media (such as Netflix)

Price wars with competitors and pricing pressure (such as Wal-Mart)

Consumer preference for online shopping, product comparisons online, price comparison and access to product reviews rather than visiting a brick-and-mortar store

Entrance of new competition in the market (such as Wal-Mart)

Lawsuits for employee misrepresentation of manufacturers warranty and undisclosed anti-price matching policies to increase Best Buy sales and employee incentives can give a negative reputation to consumers and decline in customer trust 

Regulation of Federal Bank Reserves 

Economic Down Turn

Alternatives Considered

During the fiscal year 2008-09, Best Buy’s outstanding debt more than doubled. Understandably, this was mostly owing to the Carphone Warehouse’s takeover. While it is critical for the company to continue to develop its operations around the world, it may be advisable to slow down its expansion ambitions in the near term. With economies still grappling with the magnitude of the global credit crisis, it’s unclear how consumer spending will affect Best Buy in the coming quarters, so the company may require some financial cushion.
Internet sellers are another big source of concern for Best Buy. The internet has made it easier to link consumers and sellers, from the well-known Amazon.com to individuals on eBay. Best Buy will become outdated as internet retailing becomes more accessible to even people who are not technologically skilled. Furthermore, internet retailing is a growing industry because of decreased overhead costs, it will nearly always be less expensive for customers. Best Buy must modify the look and feel of its marketing and stores in order to withstand this pattern shift.
i have to do financial analysis.

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