MGT 400

1. What is the big issue Best Buy is facing:
a. As a big box retailer in today’s marketplace?

As a big box retailer, Best Buy has huge brick and mortar stores that customers are using as basically showrooms to physically touch and test the products as well as get advice before purchasing the products. The problem with that is ultimately many of the customers don’t buy from Best Buy after going to the store to test the product. Online shopping has become Best Buy’s biggest issue because of competitive pricing from online retailers. These online retailers can offer better prices because they don’t have huge brick and mortar stores to run like Best Buy.

b. Looking ahead to potential changes in the marketplace?

Online shopping is the biggest change in the marketplace and will be in the future. I think even going to Best Buy to test the products will decline with consumers because of the access to YouTube, blogs, forums, ect., consumers can test the product and get feedback from the comfort of their own homes.

2. Summarize Best Buy’s current situation by discussing:
a. Trends in profit.

Currently Best Buy is steadily losing profits. I thinks this is contributed to the inventory at the brick and mortar stores. Technology is so rapidly changing that electronic products change just as fast. Before they know it the newest shipment of products is yesterday’s news. Another issue with losing profits from inventory is their vast array of products. They don’t have a central focus. They sell anything from iPod to vacuums, it’s all time sensitive products.

b. Response to marketplace and industry changes.

The global and computer electronics industry in estimated to reach a value of $620 billion by 2016, an increase of 20.6% from 2011. I think those numbers are in response to reaching online customers. Best Buy will have to adapt to the changing marketplace to compete in the industry. A distinctive change in the industry is the ever falling prices of electronics. As a result product life cycle has shortened as manufactures “cannibalize” their own products in an effort to maintain consumer interest and loyalty.

3. Pick two of Best Buy’s competitors that are discussed in the case.
a. How did industry effects influence