Competition has been high in this industry mainly because there has been little to no switching cost at all if any buyer makes a decision towards shopping elsewhere. Apart from that, the products are not at all isolated and differentiated since buyers can buy same type of products at nearly all of the various electronic stores. The threats related to the potential new entries in the consumer and retail electronics industry have been relatively low. Due to this consequence, there have been a lot of new entrants in the electronic market.
The low capitalization in the market implies that the situation would not be highly difficult towards entering the industry that is based solely on the capital required. However, the potential entrants will have to come over the high and superior brand reputations that Best Buy has maintained and established in the past. Best Buy seems to have built the reputation towards selling mid-to high-end product as well as provide excellent and prompt customer services. Therefore, it has been very difficult for the new entrants towards challenging the customer services.
Furthermore, it would have been difficult towards undercutting incumbent firms who would have already established relationships with their suppliers for purchasing the merchandise at the comparatively lower prices. Although the threats towards entry can be considered to be low, the potential and relative pool of the entrants can be considered as very large as it currently consists of the numerous online electronic retailers. Best Buy’s success thus far is a testament to its commitment to “treat customer as unique individuals and meeting their needs with end-to-end solutions. The main marketing strategy and position of Best Buy is for customers to consider it as the leading business in electronic and related services. As part of its marketing strategy, the company has positioned itself to enjoy their leadership in the current market because of its largest market share. One of Best Buy’s primary competitive advantage strategies would have been to emphasize on the services, something it had done in the past times compared to any of the other national electronic retailer.
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Best Buy has been considered as a leading mass merchandiser of the consumer electronics as well as music products that use highly value added strategy of pricing thereby maintaining the quality brands as well as products. Recently, they extended their business to China and Europe. Best Buy seems to be pursuing their goal towards winning a competitive advantage. Some of Best Buy’s Growth strategy includes expansion towards new business ventures, strategic alliances and acquisition. Best Buy, therefore, needs to acquire sufficient information about their potential competition and also about the mergers and acquisition they are planning.
Also given the present age when everyone wants to find the best price for themselves and the development and acceptance of the online market, Best Buy cannot just rely on mergers and would also have to develop their online store and give better deals. For instance they can start selling used electronics or refurbished equipment’s as they significantly reduce costs and attract a lot more customers. VRIO Analysis Value Best Buy seems to have built the reputation towards selling mid-to high-end product as well as provide excellent and prompt customer services.
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Therefore, it has been very difficult for the new entrants towards challenging the customer services. Rarity The low capitalization in the market implies that the situation would not be very difficult towards entering the industry that is based solely on the capital required. However, the potential entrants will have to come over the high and superior brand reputations that the Best Buy has maintained and established in the past. Imitability The products of Best Buy can be imitated easily. There are many more firms offering similar products and as such rivalry among the consumer electronics retail industry are considered to be high.
Competition has been high in this industry mainly because there has been little to not at all switching cost if any buyer makes a decision towards shopping elsewhere. Organization Best Buy’s success thus far is a testament to its commitment to “treat customer as unique individuals and meeting their needs with end-to-end solutions. ” The main marketing strategy and position of Best Buy is for customers to consider it as the leading business in electronic and related services. As part of its marketing strategy, the company has positioned itself to enjoy their leadership in the current market because of its largest market share.
