Best Buy is a very popular electronic company sells products such as cellphones, computers, Ipods, etc. worldwide. Best Buy aims to provide their customers with the best service possible by providing 24 hour customer support. As stated on Best Buy's official website "Best Buy offers consumers a unique shopping experience with the latest technology and entertainment products, at the right price, with a no-pressure (non-commissioned) sales environment" (2012). "The first Best Buy Canada Stores were opened in the fall of 2002, with eight locates in the Greater Toronto area. The name "Best Buy" was created in 1981 when the store named Sound of Music held a "Tornado Sale" (with the sale promoted as a "Best Buy") and it became an annual event (Best Buy, 2012). Mike Pratt is the current President of Best Buy Canada. He started as a sales associate at Future Shop in 1990 after graduation from the University of Western Ontario in his hometown of London, Ontario (Tay, 2011). Best Buy's main products are electronics and the main service they provide is helping customer's with all their electronic related questions. Their target audience would be individuals between the ages of 14 and 40, as this is the most popular age span for cell phones, lap tops, ipods, etc. Supply and demand for electronics changes rapidly for each product that is produced. Everyone always wants the newest and most popular version of technology. Therefore when a product is first introduced to the market, demand is very large and the supply is never met. For example, when the Iphone 4 came out, stores sold out rapidly even though they are very expensive as consumers want and feel as if they need the most current version.
The first stage of production is the primary stage. The primary stage for electronics would be the production of plastic and metal which will be used in the secondary stage to produce the electronic gadgets. The tertiary stage, which is the third and final stage, is when Best Buy sells the products to their customers. Best Buy generates over $3 billion per year in revenues (Best Buy, 2012). The gross profit margin for the last quarter of 2011 was 26.6% , creating a very large profit (2007). "At the end of fiscall 2011, we [Best Buy] employed approximately 180,000 full-time, part-time and seasonal employees" (2012). Best Buy provides very reasonable prices for their products as a large number of thier customers are in highschool and university. The fixed costs for Best Buy would include the cost of the store and utilities expenses. Best Buy would have numerous variable costs including the wage for employees, advertising expenses and general maintenance.
Best Buy has several major competitors including Circuit City, Radio shack, Walmart, and any other place selling electronics (2012). The competitive advantage that Circuit City and Radio Shack may have is that they do not offer as wide of a range as Best Buy. Offering less variety makes it more easy for staff to know everything there is to know about the products. The advantage stores such as Walmart and Target may have is that they sell a very wide variety of products. Individuals with kids or simply busy schedules may decide to go to one of these stores in order to save time. Best Buy has become a very successful company over the years. A large part of this success is due to their educated staff and the newly created "geek squad." Technology has numerous problems that can take place, making it very difficult for users to diagnose the problem. The fact that a technology store has educated staff that can help the consumers is a crucial aspect to their success. A possible weakness is that consumers may have to wait a great length of time for a representative assistance. With the large success of the company, individuals may become irritated having to wait for support. Another issue with having such a large electronics store is that theft may be an issue, as there are numerous unsupervised customers browing. Best Buy has became an extremely successful store, and will continue to grow in the upcoming years.
Citations:
Best Buy. 7 February 2012 http://en.wikipedia.org/
Who are the Major Competitors for Best Buy? 2002. http://wiki.answers.com/
Best Buy Co Inc. (NYSE:BBY). 2007. http://finapps.forbes.com/
Best Buy. 2009-2015. http://phx.corporate-ir.net/phoenix
Mike Pratt, President and COO, Best Buy Canada. 2011. http://www.bcbusinessonline.ca/
Best Buy. 2012. http://www.bcbusinessonline.ca/
Best Buy. 2012. http://www.bestbuy.ca/
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