Bestbuy’s Strategy Essay

According to the case, BestBuy is trying to create a competitive advantage in three atomic number 18as guest- centricality, employment policies, and unsh bed branding. after studying the VRIO framework, I consecrate base that BestBuys three areas of scheme do fit into the VRIO framework. BestBuy believes that an effective strategy is a commitment to client-centricity. A tune that implements customer-centricity caters to specific customer take and behaviors.According to the book, BestBuy wants to steer out from a product-centered marketing progress to a more(prenominal) customer-oriented marketing approach which will have them asking what problems its customers are facing, and then providing solutions. Furthermore, BestBuy wants to segment its customers into intravenous feeding disparate profiles Upscale Suburban, Urban Trendsetter, Empty Nesters, and Middle America. In different regions around the U. S. you will find these diverse groups.BestBuy has been able to utili ze the rare attribute of the VRIO framework with its ability to serve the postulate of the predominant customer segment in a wedded region. BestBuy is unlike any confederacy in the consumer electronic industry because as the book mentions, Nearly any companies claim to be customer oriented, but being customer centric required a radical shake-up and shift in employee mindset. BestBuy has reformatted the material space in its stores and related products have been bundled together to meet the needs of certain segments.Store teams have as well been trying to answer the next questions What kind of traffic do we have culmination in our stores today, how efficaciously are we selling to the people in the stores, what does our customer information await like, what segments do we have coming in, and what kind of market share do we have for those segments? To answer those questions BestBuy has been investing in the proper(ip) tools so that the survey socks what to focus on. Bes tBuy has taken customer interest a step further, and so far it has given them a rare advantage. BestBuy has also done a good job of organizing its employment policies to capture repute.According to the book, BestBuy has set up an employee listening program that uses open communication to better understand the needs of its workers. This program has done a great job of exploiting the companys capabilities because it is implementing tools such as annual company-wide surveys, a virtual discussion board, and cloistered dialogue sessions. BestBuy is capturing value because they are listening to their employees and nameing information that was previously unknown to management. The final area that BestBuy is focusing its strategy on is exclusive brands.This last area is genuinely important to BestBuy because it is blue-chip, rare, and expensive to imitate. BestBuy currently owns these undercover labels Insignia, Dynex, Init, Rocketfish, and Geek Squad. As far as background goes, In signia produces TVs, monitors, folk-theater systems, and portable movie/ audio players. Dynex produces storage media, data and power cables, webcams, and office supplies. Init produces media storage, equipment bags, totes and furniture for home theaters. Rocketfish is a top notch producer of cables that are mostly use for TVs. And most famously, Geek Squad provides computer repair and installation wait ons.BestBuy realizes that they commodenot solo rely on these small private labels to create, on their own, enough tax revenue to stay in business. But nevertheless, these private labels are valuable because they put up attractive features to the company. Most of the products offered by these small labels are accessories that add value to the more expensive products which in turn increase the profitability of BestBuy. In particular, I think Geek Squad is valuable because a sess of older people do not know how to set up the more complex electronics and often run into problems.Ea sy-to-setup installation and troubleshooting is a very attractive feature to most consumers. Along those same lines, these small labels are rare because their products are only being sold in BestBuy stores. If youre a huge fan of Rocketfish cables or really appreciate the helpfulness of Geek Squad then you have to come to BestBuy to get you want. These private labels are also costly to imitate I imagine because it could be costly to implement and staff a repair and installation service in all of your stores like BestBuy has done with Geek Squad.Also, these private labels have a few unique products that could be hard to replicate. I know that Init has created some nice, high quality equipment bags and furniture for home theaters. I believe that after weighing the benefits of all three of these areas that BestBuy has indeed created a competitive advantage. In one way or another they have valuable, rare, costly to imitate, or are organized to capture value with their products and serv ices. BestBuys business level strategy is to focus on its people through customer centricity and employment policies.The managers in both areas want to listen to the people and discern how to best charm to them. Managers have planned to become customer centric by profiling its customers and then design the stores and provide products according to the profiles in the region. The cost driver associated is the cost of input factors because it requires a radical reorganization and shift in employee mindset. Stores need to be reformatted and related products need to be bundled. The briny value driver for this focus has been customer service.BestBuy has excelled at customer service because they are able to identify customer needs and appeal to their wants because of the unique profiles that have been created. The main cost driver for employment policies has also been cost of input factors because I imagine it has been costly to implement the modernistic annual company-wide surveys, a vi rtual discussion board, and one-on-one dialogue sessions. The main value driver for the employment policies is customer service. BestBuy has created distinctive techniques for company-wide communication that in turn provide better customer support.Managers now know what the consumers are thinking because the employees are able to share information with their superiors in an effectual way. The competition between BestBuy, Amazon, Apple, and Wal-Mart has been fierce over the last several years. BestBuy has found itself to still be at the top of consumer electronics in the minds of its customers with 40% of the votes. However, BestBuy comes in 11th place in the Top 15 most valuable retail brands. Furthermore, Apple has recently made a large push back in the race by reaching $2. 8 billion in sales in 2010 which puts them in third place behind BestBuy and Amazon.However, BestBuy is in last place according to share performance in 2010 and 2011. afterward looking at all of the different results and surveys I would say that BestBuy is right in the thick of things and battling for the top spot. Amazon may be more a valuable company but the consumers still view BestBuy as the leading consumer electronic company. One of the critical problems facing BestBuy is people coming into the store and testing the products and then leaving and buying the product elsewhere. I think that BestBuys strategy to become customer centered is a good strategy.Many of the same products are sold by sixfold companies, but if BestBuy can appeal to the segments and profiles of people coming into their stores then they can get people to buy the products in their stores. Identifying the profiles of people coming in is the first step and then being able to bundle products and pitch displays in an appealing way is a good strategy. If BestBuy continues to value its consumers I think they will find a way to sustain a competitive. After all, people want to feel important and be given what they need and desire.