Professional Documents
Culture Documents
2010
COOKS CONSULTANTS
Specializing in Consumer Electronics Industry
OVERVIEW
1. Strategic Issues
A. Corporate Strategy
B. Industry Analysis
C. Competitive Strategy
D. SWOT Analysis
E. Strategic Challenges
3. Action Plan
!
4. Questions
CORPORATE
STRATEGY
CUSTOMERS
Technology
Novices
CORPORATE STRATEGY
Individual
Consumers
Age 16-35
Age 35-60
Small
Businesses
Consumer
Electronics
Electronic
Repairs
CORPORATE STRATEGY
Entertainment
Platforms
Appliances
SUBSIDIARIES
GEEK
SQUAD
PACIFIC
SALES
MAGNOLIA
AUDIO VIDEO
FUTURE
SHOP
CORPORATE STRATEGY
CORPORATE GOALS
Make technology
deliver on its
promises to
customers
Sustained
growth and
earnings
Leader in
service
CORPORATE STRATEGY
CORPORATE STRATEGY
CONCENTRIC
DIVERSIFICATION
CORPORATE STRATEGY
Common Customer
Common Technology
Common Channels
Customer Centricity Strategy
INDUSTRY
ANALYSIS
PRICE
Best Buy
Circuit City
RadioShack
Amazon
WalMart
LOW
FEW
INDUSTRY ANALYSIS
MANY
BARRIERS TO ENTRY
Economies of Scale
High
Dierentiation
High
High
Low
High
Advertising
High
INDUSTRY ANALYSIS
BARRIERS TO ENTRY
Economies of Scale
High
Dierentiation
High
High
Low
High
Advertising
High
INDUSTRY ANALYSIS
HIGH
BARRIERS
TO ENTRY
BARRIERS TO EXIT
Specialized Assets
High
Fixed Costs
High
Management Commitment
Low
Contractual Commitment
High
INDUSTRY ANALYSIS
BARRIERS TO EXIT
Specialized Assets
High
Fixed Costs
High
Management Commitment
Low
Contractual Commitment
High
INDUSTRY ANALYSIS
HIGH
BARRIERS
TO EXIT
RIVALRY
High
Low Rivalry
Growth Rate
Steady
Low Rivalry
Fixed Costs
High
High Rivalry
Dierentiation
High
Low Rivalry
Switching Costs
Low
High Rivalry
Exit Barriers
High
High Rivalry
Concentration
INDUSTRY ANALYSIS
RIVALRY
High
Low Rivalry
Growth Rate
Steady
Low Rivalry
Fixed Costs
High
High Rivalry
Dierentiation
High
Low Rivalry
Switching Costs
Low
High Rivalry
Exit Barriers
High
High Rivalry
Concentration
MODERATE-LOW
INDUSTRY ANALYSIS
RIVALRY
SUBSTITUTES
Electronic
E-commerce
Retailers
Amazon
eBay
INDUSTRY ANALYSIS
Merchandise
Retailers
WalMart
Target
Costco
Digital Content
Distributers
iTunes
Netflix
COMPLEMENTORS
INTERNAL
Complementors Within Itself
Computer Software (Computers)
Video Games (Video Game System/TV)
Acquisition of Geek Squad
EXTERNAL
Payment
Processing
Industry
Shipping
Technology
INDUSTRY ANALYSIS
INDUSTRY GLOBALIZATION
HIGH
GLOBAL
Forces For
Global
Coordination/
Integration
TRANSNATIONAL
MULTINATIONAL
LOW
FEW
INDUSTRY ANALYSIS
Forces For
Responsiveness/
Dierentiation
MANY
INDUSTRY GLOBALIZATION
NATIONAL
GLOBAL
Economies of Scale
Customer Needs
Competition
Channels
Transportation Costs
INDUSTRY ANALYSIS
Product Standards
(country vs. industry)
consumers
SUPPLIER
BUSINESS
LEVEL
STRATEGY
STRATEGIC
RESOURCES + CAPABILITIES
TANGIBLE
INTANGIBLE
Brand equity
Reputation
Geek Squad
Employee knowledge
Multiple brand names
SUSTAINABILITY
Customer Centricity strategy
Brand name + reputation
Acquisitions
COMPETITIVE ADVANTAGE
CUSTOMER SERVICE ORIENTED
no commission
product variety
COMPETITIVE DISADVANTAGE
COMPETITIVE DISADVANTAGE
Not as many
store locations
COMPETITIVE DISADVANTAGE
Not as many No low cost
store locations structure
COMPETITIVE DISADVANTAGE
Not as many No low cost
store locations structure
Not as
specialized
COMPETITIVE DISADVANTAGE
Not as many No low cost
store locations structure
Not as
specialized
A lot of
branches
Best Buy
ACQUISITIONS
BUSINESS LEVEL STRATEGY
Broad Target
Market
Uniqueness
Broad Target
Uniqueness
DIFFERENTIATION
Market
Internal
SW
OT
External
Internal
Differentiation strategy
SWOT ANALYSIS
Internal
S
SWOT ANALYSIS
Internal
Shorter
Decline
in operating margins
Fewer
Relatively
Large
SWOT ANALYSIS
Internal
W
SWOT ANALYSIS
External
SWOT ANALYSIS
External
SWOT ANALYSIS
ALTERNATIVES
+
!
EVALUATIONS
ALTERNATIVES
GLOBAL
EXPANSION
MARKETING
INITIATIVE
DIGITAL
ACQUISITIONS
ONLINE CUSTOMER
SERVICE/LEARNING
EXPERIENCE
VIABILITY MATRIX
OF ALTERNATIVES
CONSISTENT WITH
STRATEGY + CORE COMPETENCIES
GROWTH POTENTIAL
CONSISTENT WITH MARKET TRENDS
PROFITABILITY
COST EFFECTIVENESS
EASE OF IMPLEMENTATION
POINT VALUE
SCALE 1-4
4
3
3
2
2
1
POINT %
100%
50%
0% X
ALTERNATIVE 1
DIGITAL
ACQUISITIONS
ALTERNATIVE 1
DIGITAL
ACQUISITIONS
PROS
CONS
streaming/gaming market
compact-disc sales
EVALUATION
OF ALTERNATIVES
DIGITAL
ACQUISITIONS
GROWTH POTENTIAL
CONSISTENT WITH MARKET TRENDS
PROFITABILITY
COST EFFECTIVENESS
EASE OF IMPLEMENTATION
STRATEGIC ALTERNATIVES + EVALUATIONS
TOTAL
9.5
ALTERNATIVE 2
ONLINE CUSTOMER
SERVICE/LEARNING
EXPERIENCE
!
ALTERNATIVE 2
ONLINE CUSTOMER
SERVICE/LEARNING
EXPERIENCE
PROS
Lowers HR costs
CONS
EVALUATION
OF ALTERNATIVES
ONLINE CUSTOMER
SERVICE/LEARNING EXPERIENCE
TOTAL
12
ALTERNATIVE 3
GLOBAL
EXPANSION
STRATEGIC ALTERNATIVES + EVALUATIONS
ALTERNATIVE 3
GLOBAL
EXPANSION
PROS
CONS
Cultural barriers
EVALUATION
OF ALTERNATIVES
GLOBAL
EXPANSIONS
GROWTH POTENTIAL
CONSISTENT WITH MARKET TRENDS
PROFITABILITY
COST EFFECTIVENESS
EASE OF IMPLEMENTATION
STRATEGIC ALTERNATIVES + EVALUATIONS
TOTAL
X
10
ALTERNATIVE 4
MARKETING
INITIATIVE
ALTERNATIVE 4
MARKETING
INITIATIVE
PROS
CONS
Expensive
brands
Buy
EVALUATION
OF ALTERNATIVES
MARKETING
INITIATIVE
EASE OF IMPLEMENTATION
STRATEGIC ALTERNATIVES + EVALUATIONS
TOTAL
EVALUATION OF
ALTERNATIVES
CONSISTENT WITH
GROWTH POTENTIAL
CONSISTENT WITH MARKET TRENDS
PROFITABILITY
COST EFFECTIVENESS
EASE OF IMPLEMENTATION
TOTAL
X
X
X X
9.5
12
10
EVALUATION OF
ALTERNATIVES
CONSISTENT WITH
GROWTH POTENTIAL
CONSISTENT WITH MARKET TRENDS
PROFITABILITY
COST EFFECTIVENESS
EASE OF IMPLEMENTATION
TOTAL
X
X
X X
9.5
12
10
SELECTED ALTERNATIVE
SELECTED ALTERNATIVE
ONLINE CUSTOMER
SERVICE/LEARNING
EXPERIENCE
SELECTED ALTERNATIVE
WHY SHIFT TO E-COMMERCE?
Year
2006
E-commerce
Revenue
2,972
% change Total
Commerce
13.9%
6.8%
2007
3,333
12.15%
5.0%
2008
3,704
11.13%
5.0%
2009
3,371
8.99% 10.9%
ACTION
PLAN
ACTION PLAN
WHO IS RESPONSIBLE?
SENIOR EXECUTIVES
DEPARTMENTS
VP of Operations
eCommerce
VP of Human Resources
Information Technology
ACTION PLAN
TIMELINE
TIMELINE
RESEARCH
Which stores
to close
Outsource?
Operational +
HR logistics
3 MONTHS
TIMELINE
2
PREPARATION
RESEARCH
Which stores
to close
Outsource?
Operational +
HR logistics
3 MONTHS
Development
Training
Create marketing
campaign
5 MONTHS
TIMELINE
BETA TESTING
PREPARATION
RESEARCH
Which stores
to close
Outsource?
Operational +
HR logistics
3 MONTHS
Development
Training
Create marketing
campaign
5 MONTHS
Employee familiarity
with system
Check for platform
glitches/problems
4 MONTHS
TIMELINE
4
BETA TESTING
PREPARATION
RESEARCH
Which stores
to close
Outsource?
Operational +
HR logistics
3 MONTHS
Development
Training
Create marketing
campaign
5 MONTHS
LAUNCH!
Employee familiarity
with system
Check for platform
glitches/problems
4 MONTHS
1 YEAR
MAJOR IMPEDIMENTS
Potential loss of excellent customer service
(not same as in person face-to-face)
ACTION PLAN
CONTINGENCY PLANS
Patents
ACTION PLAN
CONCLUSION
How can Best Buy continue to have innovative products, topnotch employees, and superior customer service while facing
increased competition, operational costs, and financial stress?
Solidify customer
service value
proposition
ACTION PLAN
Continue to
differentiate from
competitors and
potential new
entrants
Accomplish this
through innovative
online platform
(BestBuy U)
THANK YOU