Best Buy SWOT Analysis This paper is about the SWOT analysis of the US based retail shop Best Buy. This will include an analysis of external and competitive factors and key success factors in the industry. External and Competitive Factors The major external factor that is responsible for the success or failure of a firm in retail industry is the attitude of the consumers to wards retail shopping. Internet shopping for example has created a lot of ease for the customers who used to visit the retail shops like Best Buy and Wal-Mart for their monthly shopping.
Recession or prosperity in the economy is another external factor which can help the firm or plunge it into deep danger. The buying power of the consumers and their propensity to save and spend are other external factors important for the firm. Best Buy should also consider e-tailers and the emerging specialized retail shops as their main competitors. SWOT Analysis Strengths Weaknesses - High brand recognition of Bet Buy products by the consumers - Offer affordable prices and deals that the consumers are interested in - The company has a strong online presence - Reward system for the regular customers has attracted many consumers from competition - The firm is able to increase the total sales as a result of low priced deals and bundle offers - Has the image of being strongly associated with technology - The customer loyalty program has kept 31 million US customers connected to Best Buy (Best Buy, 2010) - Best Buy has assumed about 30% of the shares of Circuit City’ consumers - The cost of maintaining the mega stores is very high - The customer service is not very personal and customer complaints are not very welcomed - The pricing strategy is too aggressive which causes the consumers to rethink of the quality of Best Buy products (Walberg, 2007) Opportunities Threats - Costco Wholesale Corp.
has reported a 38% decrease in the sales on televisions in 2009 (Gruenwedel, 2009) - Wal-Mart sales are decreasing as well - Consumers are attracted more towards gadgets and electronics - Introduction of innovative and low prices electronics - The consumers are in the phase of replacing all the CRT television sets with the new LCD/LED television sets - Sales of consumer electronics decreased by 12% in the year 2009 compared to 2008 - Uncertainty in the market - Decreasing household income of the average families will cause sales to further decrease - Boom in the internet retail shops which offer lower prices than the physical retail shops - Changes in technology are rapid which decreases the shelf life of the electronic products sold by Best Buy Key Success Factors Inventory management should be the first priority of the firm The firm should focus on the relationship with its suppliers and customers I order to be profitable The time spent on the selection of the suppliers should not be very less in order to select the best suppliers Trust should be developed with the customers The staff should be compensated according to their performance Staff should be trained well and should have the complete product knowledge Firm should have a strong presence on the web Works Cited Walberg, Robert.
“Best Buy in a big-time bargain. ” MSN Money 4 April. 2007. Web. Gruenwedel, Erik. “Analyst: CE Weakness Hurting Best Buy, Costco. ” Home Media Magazine 13 May. 2009. Web. Best Buy. About Best Buy. Bestbuyinc. com, 2010. Web. March 1, 2010.