Best Buy was founded in 1966 by the current CEO Richard M. ‘Dick’s schulze. Based out of Eden Prairie, Minnesota the corporation currently has 446 stores and earned over 83 million in total revenue last year. Best Buy carries a wide variety of products consisting of Major Appliances, video and audio equipment, computers, software, music, and wireless technology.
When analyzing this corporation it is important to pay close attention to its current and future services and products, any problems with the corporation, the future direction Best Buy is headed, what can be done for the corporation, and what it can do for you as a consumer or employee. Best Buy is currently the number one computer retailer throughout the U. S. and offers multiple promotions.
In December of 1999, Best Buy signed an agreement with Microsoft to offer yearly and monthly contracts through MSN, Microsoft’s internet service provider. This pact was an advantage for both companies. Microsoft helped Best Buy develop their website and promote e Commerce. They also bought 200 million in Best Buy stocks raising the price from $1. 49 a share to $49. 95.
Best Buy in return is offering MSN to the 200 million customers that pass through its doors on a yearly basis. One of the largest money makers for Best Buy is its three year product service plan (PSP).
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The PSP is almost pure profit, and has formed into something very lucrative for the company. It is offered on almost all of the products in the store, and management is instructed to put a huge emphasis on its sale.
Best Buy also offers the in home delivery and installation of video and major appliances. Because of this agreement with Microsoft, Best Buy’s e Commerce is an excellent source for customers to purchase anything in the store on line. Netflix a major source for renting DVD’s online has teamed up with Best Buy to enable the customer to buy the DVD movie of choice right from the Best Buy website. Best Buy.
com also offers the consumer the option to order any product from the store directly to their door step in the matter of a day. One of the major weaknesses with Best Buy is its dependence on the economy. If we are in a recession or there are a lot of layoffs in the area of a certain store its business is directly affected. Unlike with some corporations such as CISCO systems or Ameritech they are in many way’s utility services and aren’t directly influenced by the state of the economy. Best Buy’s CEO Dick Schulze admitted in an article that sales are down due to the current state of the economy: ‘We had expected earnings to decline in a decelerating economy,’ Best Buy chief executive Richard Schulze said in a statement. But, he added, ‘I remain confident that we are on track to deliver earnings growth of 16 to 18 percent this year,’ or $2.
16 to $2. 21 per share, assuming no significant decline in the economy. ‘ this seems to be the case with most retail chains but with the amount of expansion that Best Buy is working towards there is plenty of room to make up for losses. In terms of future directions the company is taking, in February of 2001, Best Buy embarked on its most advantageous venture by the acquisition of the Musicland Corporation which owns stores such as Sam Goody Music, Suncoast Video, and Media play. This acquisition will help to give Best Buy the edge in the electronic and entertainment sales field.
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Best Buy obtained over 1300 stores from the Musicland Corporation. Richard Schulze’s press release said it all when he discussed where the company was headed with the newly acquired stores. ‘We are pleased at the prompt completion of the Music Land acquisition,’ said Best Buy Chairman & CEO Richard M. Schulze. ‘The management team will move ahead quickly with our plans to transform our mall-based stores’ product offerings to include MP 3 players, cellular telephones, satellite systems, digital imaging, game hardware and software, and an expanded assortment of accessories.’ It is obvious that Best Buy is always forward thinking in its approach to company expansion. With the company in a constant state of expansion, it creates the need for multiple positions.
As new stores are opening, Best Buy needs employees for many different applications. Everyone from the sales floor all the way up to district Management is required for the stores to function as one cohesive whole. The corporation offers employees the chance to move up through the ranks. It has a very elaborate training system dedicated to constantly preparing employees with the tools they need to take over there managers position after they are promoted. Best Buy offers generous stock options to there employees and one of the nicest things is the tremendous employee discount. They are given a discount that is five percent above Best Buy’s buying cost.
This will encourage many employees to stay with the company and is a benefit to be had for all. Starting from its small beginnings as a small electronics store, Best buy now own well over 1800 stores between the 440 Best Buy’s and all the stores acquired from the Music Land acquisition. This is just the start for where Best Buy is heading. Where the company will end up is anyone’s guess.
But with a leader like Richard Schulze, the possibilities are unlimited.
