Question

Best Buy is the largest consumer electronics retailer in the United States with fiscal 2018 sales over $42 billion. The company competes aggressively on price with rivals, such as Costco Wholesale, Sam’s Club, Walmart, and Target, but is also known by consumers for its first-rate customer service. Best Buy customers have commented that the retailer’s sales staff is exceptionally knowledgeable about products and can direct them to the exact location of difficult to find items. Best Buy customers also appreciate that demonstration models of PC monitors, digital media players, and other electronics are fully powered and ready for in-store use. Best Buy’s Geek Squad tech support and installation services are additional customer service features valued by many customers.

How would you characterize Best Buy’s competitive strategy? Should it be classified as a low-cost provider strategy, a differentiation strategy, or a best-cost strategy? Which one of the five generic competitive strategies best characterizes Best Buy? Explain your answer.

Answer 1

Answer:- Best Buy Co., Inc. is a multinational retailer offering consumer electronics, home office products, entertainment software, appliances and related services. It operates in two segments: Domestic and International. It should be classified as being differentiated from its rivals. A low-cost provider focus is to offer the lowest prices. Best-Buy is not to be classified as a low-cost provider. The prices are competitive to other rivals. However, they offer best cost and are willing to price match other rivals to stay strong in the electronics market.

Currently, it remains as the only completely national electronics chain. This differentiates Best Buy from Costco, Sam’s, Wal-Mart and Target. Best Buy also offers its customers both convenience and exceptional experiences when visiting a store. The staff is very knowledgeable of products and services available at Best Buy. This is one of their key competitive strategies. Best buys emphasize on services versus its competitors.