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  • Published on: 14th September 2019
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Business Foundation

Student ID: 18574658

Full name: Lam Minh Tuan LE

Teacher name: Nicole El-Haber

Class time/location: Wed 3-4pm/TLC 414

Marketing report: Best Buy Co.,USA, Inc.

Executive Summary:

The following report illustrates the electronics company Best Buy in the United States of America. Moreover, this report is primarily focused on the SWOT analysis managed in order to describe the new product – Go Pro Karma Drone – which is known as unmanned aircraft systems (UASes). Best Buy has manufactured to provide to consumers and also come up with plenty of recommendations about a drone.

This report is mainly using the SWOT analysis method in order to analyze strengths and weaknesses and describe opportunities and threats. Then using theses factors to advantage the new product to encourage customer. Additionally, Best buy had established 1,415 stores on February 2016 which including 28 Pacific sales stores and 350 best buy mobile stand-alone stores (Marketline 2016, p.4).Also, Best Buy Co was one of the op retailer in Carbon Performance Rankings (Marketline 2016, p.8).

In the report, a various of figures, tables and data are examined in order to introduce company's profile , also, discovering a new product that will be successful or not. This report is going to describe how Best Buy can maximize its strengths and opportunities to develop their company. Moreover, this also analyze weaknesses and threat for Best Buy Co to improve and become more successful.

Table Of Contents

EXECUTIVE SUMMARY……………………………………………………………………….

INTRODUCTION AND BACKGROUND TO THE COMPANY…………………….

MARKET DESCRIPTION………………………………………………………..

   Market Size…………………………………………………………………………………

   Market Leaders………………………………………………………………………….

   Market Concentration………………………………………………………………..

   Distribution And Industry Growth………………………………………………

SWOT TABLE FOR BEST BUY Co USA, INC……………………………..

FINDINGS AND EXPLANATION OF THE SWOT TABLE…………….

   Strengths……………………………………………………………………………………

    Weaknesses………………………………………………………………………………..

    Opportunities………………………………………………………………………………

    Threats………………………………………………………………………………………..

RECOMMENDATIONS ……………………………………………..............

   Target Market……………………………………………………………………………

    New Product Description……………………………………………………………

    Customer Value Proposition……………………………………………………….

    Justification Of the Choice Of The New Product Using One Strategy……………………………………………………………………………………………..

CONCLUSION……………………………………………………………………….

REFERENCES………………………………………………………………………..

APPENDICES………………………………………………………………………..

INTRODUCTION AND BACKGROUND OF THE COMPANY:

The purpose of this report is to analyze the external and internal environment (SWOT), then describe the new product and strategies that would be successful and  encourage their customer to buy their product.

A SWOT analysis is defined as strengths, weaknesses, opportunities and threats. Also, it is a planning method that assesses those four components of an association, venture or business wander. The analysis helps company to recognize the positives and negatives to develop their company and discover many new products for their consumers.

There are six categories that Best Buy Co has divided such as consumer electronics, computing and mobile phones, entertainment, appliances, services and other (Marketline 2016, p.4)

In the international sector, Best Buy organized 265 stores in Canada(137 Future Shop stores, 72 Best Buy stores and 56 Best Buy Mobile remain solitary stores), 189 Five Star stores in China, and 17 Best Buy stores and two Best Buy Express stores in Mexico (Marketline 2015, p.21)

The organization works 23 circulation focuses in the 17 satisfies of the US with aggregate space of 10,657 thousands sq. ft. what's more, three universal appropriation focus incorporating two in Canada and one in Mexico, with aggregate space of 2,213 thousands sq. ft. (Marketline 2016, p.5)

MARKET DESCRIPTION

MARTKET SIZE:

According to Markerline 2016, the organization announced incomes of (US Dollars) US$39,528 million for the monetary year finished January 2016 (FY2016), an abatement of 2% over FY2015. In FY2016, the organization's working edge was 3.5%, contrasted with a working edge of 3.6% in FY2015. In FY2016, the organization recorded a net edge of 2.3%, contrasted with a net edge of 3.1% in FY2015. Therefore, the market size of the U.S is really huge and still developing in the future.

MARKET LEADERS:

Best Buy is the main strength retailer in the US shopper gadgets retail industry. The organization is an immaculate play shopper gadgets retailer. This recognizes it from any semblance of Wal-Mart Stores and Target, which notwithstanding gadgets, offer a combination of items including clothing, toys, and home furniture (Bailey 2015)

On the main 100 shopper gadgets retailers, Wal-Mart and Amazon.com rank second and third in the purchaser hardware retail industry. Rather than the conventional blocks and-mortar retailers, which offer items through physical stores, Amazon is an internet business, or on the web, retailer(Bailey 2015).

MARKET CONCENTRATION:

There are three top competitor for Best Buy such as Wal-Mart stores, Costco Wholesale Corporation and Amazon. Best Buy returned $1.5 billion of cash to shareholders in the past year 2015 and continued to make significant progress to their key goals. The company increased online domestic revenue 13% to more than $4 billion, which means %11 of total domestic revenue.

DISTRIBUTION AND INDUSTRY GROWTH:

The company develop their capabilities in several areas to their future, including digital and mobile. They made a collaboration with key vendor partners. For example, the company is having 630 Samsung and 380 Sony home theater (Marketline 2016). In seeking after their first need proceeding to propel the current business we are executing various activities crosswise over promoting, showcasing, advanced, stores, administrations and production network. In FY16, they returned $1,5 billion to their shareholders which includes 1 billion in share repurchases, initially wanted to be finished more than three years.

SWOT TABLE OF BEST BUY Co,INC.

STRENGTHS

WEAKNESSES

1.Best Buy proved that it is one of the first destinations for customers looking for their product. The company has a ability to retain customer loyalty.

2.Best Buy has a high inventory turnover ratio

3. Best Buy has a good relationship with popular brand such as Apple which can build the company's reputation. In 2015, Best Buy became the second store in the United States to sell the apple watch, after the Apple store.

1.Recent years, Best Buy revenue has decreased which means the financial performance is weak

2. Best Buy failed in oversea operations, especially in some developed country such as Europe and China

3.The Company is mainly depends on few popular suppliers which could lead to lack of profitability

OPPORTUNITY

THREATS

1. There is a developing business sector for gadgets, including cell phones, for example, cell phones and computer games.

2. The organization's concentration towards limited time crusades may help in achieving expanded client base.

3. The developing notoriety of online business permits Best Buy to expand deals volume without building new stores.

1.There are lots of competitor recently, Best buy is facing with domestic and international competitors.

2.Operating in many countries could cause financial risks. Because the price of their products are in US dollar, so the exchange rate might be harmful to the company

3. Customers are changing their preferences because they have wide variety  of choices where to purchase and what products they want to buy in their area.

Strengths:

From the past until now, Best Buy is demonstrating that it is one of the first destinations for customers looking for their products. In many year, it has a ability to retain customer loyalty. “ The trusted blue-and-yellow branding scheme synonymous with electronics for many Americans” (Harrington 2016). Because Best Buy sells more televisions, computers and tablets with special offers than any other retailer in the world such as huge discount.

The organization detailed an expansion in the stock turnover proportion amid the survey year. In FY2016, Best Buy had stock turnover proportion of 6. Its stock turnover proportion was higher than one of its principle rivals, Sears Holdings Corporation detailed stock turnover of 3.7 times in FY2016.(Marketline 2016)

Best Buy has a good relationship with popular brand such as Apple which can build the company's reputation. For instance, Apple Watch, are likewise liable to contribute in a huge way to top line development. Prior in August, Best Buy BBY - 1.40% turned into the primary non-Apple store to authoritatively offer the item (Trefis Team 2015)

Weaknesses:

Best Buy displayed a peripheral decrease in money related execution in FY2016. The organization announced income of US$39,528 million in FY2016, when contrasted with US$40,339 million in FY2015, with a decrease of 2% over FY2015(Marketline 2016). This was basically because of the effect of remote money trade exchanges and increment in rebuilding charges. Powerless money related execution could influence the organization's capacity to seek after development and extension arranges.

The organization's operations are principally engaged in the US and this could restrict its income era. In FY2016, Best Buy created just 8% of its aggregate income from abroad operations. Reliance on the US advertise makes the organization powerless against monetary, social, political and climatic insecurity in this locale and decreases interest for its items or keeps clients from going to its stores. Any loss of offers thus of these variables may lessen the organization's income era.

The company is mainly depends on popular suppliers such as Apple and Samsung. Best Buy have a majority of products from these vendors, if any of these suppliers fail to supply product or disruption, the company will not be able to replace products.

Opportunity

With a high demand of technology of consumer nowadays, there is a developing business sector for gadgets, including cell phones, for example, cell phones and computer games. Best Buy can produce more and more products to satisfy the consumer.

The organization's concentration towards limited time crusades may help in achieving expanded client base. The organization's showcasing endeavors involving limited time exercises at provincial and national level through the methods for TV, regular postal mail, print media and other option channels, for example, the web has been paying off for Best Buy in the current years.

The company spent US$742 million on print and television advertisements, and promotional events in FY2016 (Marketline 2016).

The organization stands to profit by developing internet retailing, which gives purchasers the comfort of shopping from home. With the expansion in intelligent techniques and boundless substance, the retail web based business is developing at a quicker rate.(Marketline 2016)

Threats

Best Buy faces serious rivalry from both local and universal organizations in the retail advertise, which depends on store size, items and administrations offering, store arrangement and channel advertising. The organization confronts rivalry from national, provincial and nearby administrators of store-based retailers, multi-channel retailers, web based organizations and sellers and versatile system transporters.(Marketline 2016)

Best Buy works in many parts of the world and is presented to variances in remote trade rates. The organization reports financials in the US dollar and in this manner its income is presented to unpredictability of the US dollar against other utilitarian monetary standards, as it behaviors business operations around the world. Critical piece of its income is likewise designated in different monetary standards, for example, Canadian dollar and Mexican peso. Real components presented to conversion scale dangers incorporate the organization's interests in abroad auxiliaries and offshoots and money related resources and liabilities emerging from business exchanges in remote monetary standards.(Marketline 2016)

The client has a wide assortment of decisions where to buy and what items and administrations it needs to purchase. On the off chance that the organization neglected to foresee precisely and adjust to always showing signs of change innovation and purchaser inclinations, spending designs and other way of life choices, it could have antagonistic impact on the incomes and after effects of operations.(Marketline 2016)

RECOMMENDATION:

a Target:

With the development of technology, more and more people are going to record videos or taking pictures to keep the memories in their devices. Digital devices has become so common in out daily lives. Best Buy just produced a drone which could allow people to record videos which is an small aircraft with a recorder assembled in. The company has examined the people at all ages who love camera to survey them and how this product can be used.

b) New product description

Change over your GoPro HERO5 Black (accessible independently) into a completely coordinated airborne imaging instrument with the Karma Quadcopter with Harness for HERO5 Black. This conservative, collapsing automaton can stay overhead for up to 20 minutes and components a separable gimbal stabilizer that will help keep your recording smooth. Karma incorporates a canny, diversion style controller with a flip-up touchscreen for finish control over the HERO5 Black and in addition the capacity to see a live camera sustain. You can likewise amigo up with a companion: Thanks to the GoPro Passenger App, one individual can pilot by means of the controller while a moment uses the application to screen the camera and change settings as required.

The Karma controller which provides a video game-style controls, flip-up touchscreen and preflight training

Price:

The price is affordable for people who earns a reasonable income, loving recording and footage and it could be around $500 - $1000

c) Customer Value Prosition:

   The Karma ramble bundle is by a wide margin the best arrangement for the lion's share of individuals. For $1100, you get the automaton itself, battery, gopro legend 5 dark camera ($399 esteem), gopro balancing out stick (in reality exceptionally cool all by itself, $299 esteem), and a couple of different connections.

The camera obviously can be utilized separate from the automaton; and oh my goodness, that camera is extremely cool. It is waterproof to 30 feet without a case, can be voice controlled, touch screen (with on screen altering capacities), and obviously video that adversaries more costly camera frameworks.

REFERENCE LISTS:

MarketLine  2016a, Best Buy Co, company profile, viewed 5 April 2017, retrieved from Marketline Advantage Database.

MarketLine  2016b, Best Buy Co, company profile, viewed 5 April 2017, retrieved from Marketline Advantage Database.

MarketLine 2015, Global Consumer Electronics, industry report, viewed 5 April 2017, retrieved from Marketline Advantage Database.

Bailey, S 2015, ‘ Best Buy: The largest consumer electronics retailer', 19 January, viewed 5 April 2017, <http://marketrealist.com/2015/01/best-buy-largest-consumer-electronics-retailer/>.

Trefis Team 2015,' Best Buy could be in for a tough holiday season as completion rises', 19 October, viewed 5 April 2016, < https://www.forbes.com/sites/greatspeculations/2015/10/19/best-buy-could-be-in-for-a-tough-holiday-season-as-competition-rises/#6ef6fa6b9869>.

MarketLine  2016c, Best Buy Co, company profile, viewed 5 April 2017, retrieved from Marketline Advantage Database.

MarketLine  2016d, Best Buy Co, company profile, viewed 5 April 2017, retrieved from Marketline Advantage Database.

MarketLine  2016e, Best Buy Co, company profile, viewed 5 April 2017, retrieved from Marketline Advantage Database.

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