Value Chain Analysis of Best Buy Co., Inc - Case Study Example

Best Buy Co., Inc Sustainable Centri Model? Introduction Company’s performance within a competitive market environment, position business organization at a particular life cycle that the company’s resources, capabilities and core competencies essential components for their operational management and leadership success. Thus, the discovery of the core competence of business organizations as the central point of focus among developed and developing business gives the organization an opportunity to conduct a successful SWOT analysis (P. 775). For this case, the Best Buy Co., Inc discovery of its core competence links the company’s ability to apply its Value Chain Analysis elements to the core competencies sources of competitive advantage. In addition, the Best Buy Co., Inc utilized its values, mission and goals towards a sustainable and strategic competitive advantage limiting its competitors’ chances of competition in the market segments unfavorably (P. 769). Findings of the facts Analysis presented in this paper is helpful in understanding the Best BUY Company’s resources, capabilities and the core competencies that affects the Company’s managerial decision-making in relation to its market and geographical segments. The paper further uncovers the Best Buy Company’s tactics, operational history as well as strategies used to overcome reliable and potential competitors based on its discoveries of the core competencies. Broadly, the paper-based its arguments on facts and theories based on the facts and implications of the core competence, capabilities and resources in relation to its financial position and competitive advantage (P. 774). Lastly, based on the facts and examples obtained from the company’s business description as well as history, recommendation or justification is provided by paper in relation to the company’s SWOT analysis conducted. BEST BUY COMPANY’S RESOURCES Facts The Best Buy Company resources range from tangible to intangible resources that include financial, physical, organizational, human, innovation and reputation resources. On a broad front, the Best Buy ‘objective is to link its human resources department in providing the right knowledge of the products and services description to customers and employees. Similar, the company is equipped with sufficient personal such as retail field officers, store managers, and 115000 employees. Analysis of the company’s financial resources has a high penetrative value as evidenced by the company’s ability to generate an internal fund accounting for 19% of the total market production (P. 771). The company has multiple shares achieved through forming strategic alliances with other companies such as Carphone Warehouse mobile phone providers. Conversely, Best Buy Company has highly trained sales professions that apply unique technological changes compared to the Consumer Electronic Industry serving as technical resources (P. 775). Justification The Company’s financial resources project increased revenue caused by an increase in net income and a decrease in the operating margin. The Company acquires commercial borrowing of 25% from the Jiangsu Five Star company in conjunction with the alliances formed. The company’s physical, technological and organizational resources include, over 1100 stores, ability to use the internet, as well as physical and online sales and stores. Hence, the company’s long-term debts increase significantly from fiscal 2008 to 2009 while the company’s acquisition of assets increases with the increase in revenues (240%) collected compared to the competitors (P. 773). CORE COMPETENCIES Facts Based on the Customer Centricity Model, best buy company construct a diversified portfolio compared to its competitors that are aimed at providing goods and services at the lost cost. For example, the company has highly trained sales personnel compared to the competitors that train reliable and potential customers’ products features (P. 776). In addition, compared to the company online competitors, the Best Buy Company provides installation, product repair, and ongoing support services that earn the company a competitive advantage and an end- to-end solution compared to its competitors over a long period. However, the company strategically and sustainably uses its diversified portfolio unlike its compactors such as Wal-Mart Store Inc and gameStopCorp to produce different products in different stores (P. 777). Justification From a different perception, the Best Buy Company tremendously produces products are valuable and difficult for the competitors to imitate allowing reliable customers to buy all their goods in a Best Buy family achieved by successful acquisition. In addition, the Best Buy Company provides a store-within-a-store service with limited substitute products for competitors to take a competitive advantage. Nevertheless, Best Buy Company as an ability to evaluate and differentiate different market environment possessing an ability to integrate value gained the experience to maturing a domestic market optimization (P. 769). In this regard, the Best Buy Company utilizes its core competencies effectively in testing its products and services in different markets to meet the potential customers’ needs. Similarly, the company’s talent retention policies compared to its competitors such as Circuit City’ demises is directed towards retaining high quality and trained staff. In addition, high trained sales professionals within the company’s management and leadership compared to the consumer electronics industry provides an additional technological resources competitive advantage (P. 777). BEST BUY COMPANY CAPABILITIES Facts Best Buy Company has an ability to integrate its competences and its resources successively in order to achieve both operational and competitive advantage. For instance, the Best Buy Company build a foundational capability of developing unique employees skills that provide sophisticated services to the customers through product demonstration in marketing and product features description. In addition, retained talents within the company enable the company uses empowering and motivational strategies in a logistics management of the company’s operation and leadership. Comparatively, the Best Buy Company has got a well-designed distributive, marketing as well as information management system. For example, in pricing and debt management, the company overcomes price pressure challenges by going beyond price pressure competition (P. 774). Justifications Further analysis of the Best Buy Company’s capability to control and manage the changes facing the company’s products and services is clearly illustrated. Hence, with an improved technology, Best Buy Company products life cycle and prices are decreased resulting in reduced margin cost and maximized profits. However, the Company possesses ability or capability of overcoming social threats in relation to the business progression by providing online marketing services to encounter internet-based competition. From leadership capability point of view, the Best Buy Company Former and Current CEOs such as Richard Shultze and Brian Dunn demonstrated a well-structured leadership that drove the entire company towards a successful financial position. Conclusion The Best Buy Company’s core competence, capabilities and resources facts, findings, recommendation and justification are complex and systematically analyzed that can only be achieved through collective bargains. Therefore, understanding the Company’s key components facts and findings independently directs to understanding the company’s economic performance in a competitive market structure. Thus, in order for the Best Buy Company maintain its competitive advantage in the market structure, it must identify, strategize and implement all the identified elements of capability, resources as well as core competencies. Bibliography Thomas, L, Wheelen , David Hunger, J. Strategic management and Business policy : Toward Global Sustainability http://tecdigital.tec.ac.cr/file/9565503/www.bloomberg.com Read More