Global strategic management | BUS 6320 | Columbia Southern University



(5 pages) Template and Case Study Below:

This assignment utilizes a case depicting a real-life situation of which you will conduct a detailed case analysis. This will involve reading the provided case, researching the company, identifying a problem/challenge, and compiling three to five potential alternatives that could solve the problem. Finally, you will conduct additional research in order to determine which of the alternatives you will recommend—include your rationale and supporting research.

First, read the case study: “Best Buy Co., Inc.,” found beneath the Unit II Study Guide on the Unit II homepage. You will use the 
Case Analysis Template to complete this assignment. This analysis should include the use of the CSU Online Library to provide supporting documentation as well as the financial statements of the organization.

It is expected that a minimum of three managerial tools be used including (but not exclusively) political, economic, sociocultural, technological, ecological, and legal (PESTEL), strengths, weaknesses, opportunities, and threats (SWOT), Porter’s Five Forces, balanced scorecard, gap analysis, root cause analysis, and/or McKinsey 7-S Model. These tools are explained within the Unit I and Unit II lessons of this course and could be presented within the analysis in table format.

In order to successfully complete this case study, you need to review the video and Task Learning Guides (TLGs) located below. This will provide you with the skills to research companies using scholarly research (versus a Google search) and how to research industries/competitors. This is the basis for your external analysis and identification of the problem within the company. This will also provide supporting research within your recommendations.

Company and Industry Research

Transcript for Company and Industry Research

How to Find Company Information in the Business Source Ultimate Database (TLG)

How to Search for Articles with a Company Focus (TLG)

Your completed case study must be at least five pages in length, and you must use at least five peer-reviewed academic sources that are no more than five years old. Adhere to APA Style when constructing this assignment, including in-text citations and references for all sources that are used. Please note that no abstract is needed. Utilization of the provided template will guide you through the case analysis’ process. 

By 2017, the value of Best Buy’s stock climbed over 200 percent1 since Hubert Joly was appointed CEO in 2012. Although lagging the returns of Amazon (300 percent), it exceeds the 75 percent return on the S&P 500 over the same time period2 (Exhibit 1 depicts a stock price comparison from August 20, 2012, the day that Hubert Joly was appointed as Best Buy CEO, to September 6, 2017).3 Best Buy’s performance reflects a stark difference for many retailers that have declared or are facing bankruptcy, such as RadioShack and Sears. Best Buy has used its physical presence to engage customers in “high touch” products that allow customers to interact with products combined with competitive prices, and then offering after-sales support such as in-home installation. Joly implemented a mix of “Expert Service. Unbeatable Prices” to provide a clear value proposition.4,5 The strategy’s success is reflected in Best Buy’s performance, and Hubert Joly being touted as the “retailer of the year” by Forbes for 2016.6 Still, Hubert Joly increasingly confronts questions about how to maintain the firm’s improved performance. Currently, Best Buy is focusing on in-home advisors with a brand-agnostic approach to unlock latent demand and drive sales. However, it is unclear whether it will work. It is either possible that Best Buy may provide a glimpse of what the future may look like, or these moves may simply prelude the firm’s demise.
Amazon remains a formidable competitor for Best Buy. For example, Amazon has begun offering in-home consultation with Alexa,7 and Best Buy does not have an offering in the growing area of digital assistants that may substitute for its trained sales staff. Amazon is also creating increased physical presence through the expansion of warehouses8 and through its purchase of Whole Foods. While the purchase of Whole Foods by Amazon has mainly driven grocery chain companies stock lower, 9 it also gives Amazon a physical presence where customers will be able to pick up purchases. Additionally, through a partnership with Sears, Amazon is rolling out the sale of Kenmore appliances nationwide.1 Appliances played a large part in Best Buy’s recent growth and recovery,11 and Best Buy cannot simply rest on its laurels as competition continues to evolve.
Competition in the consumer-electronics industry remains cut-throat. While Best Buy is no longer
considered doomed to follow other national consumer electronics retail superstores into extinction, it will be harder for Best Buy to meet increased expectations for continued performance. For example, analysts are skeptical that Best Buy’s recent performance is sustainable, and rate Best Buy’s stock as a hold.12 This likely reflects concerns Best Buy may simply have received a temporary boost from struggles at other traditional retailers.13 If insider stock sales are any indication, Best Buy’s manag-ers may agree, as over the last two years of its high-performance, Best Buy managers have been net sellers of the company’s stock.14 Further, reflecting potential concerns with growing revenue, Best Buy has announced plans to cut costs by $600 million by 2021, after reaching a previous goal of reducing costs by $400 million.15 Meanwhile, Best Buy is looking for growth outside the U.S. by expanding in Canada and Mexico.16
A Brief History of Best Buy Together with his business partner, James Wheeler, Richard Schulze founded Sound of Music, an
audio specialty store, in Minnesota in 1966. The fledgling company ended its first fiscal year with gross sales of $173,000, and continued to grow rapidly over the next few years. By the time of its initial public offering in 1969, the home-town enterprise had acquired two of its local competitors 17 and it opened two new outlets near the University of Minnesota in downtown Minneapolis.
Schulze bought out Wheeler in 1971,18 shortly after Sound of Music hit the $1 million mark in
annual revenues.19 Subsequent years saw continued expansion through additional locations, new prod-uct lines, and novel promotional techniques. For example, in 1979 Sound of Music became the first supplier of video and laserdisc equipment from companies such as Panasonic, Magnavox, Sony, and Sharp. After a tornado hit the Roseville, Minnesota, store in June 1981, the company responded with a “Tornado Sale,” which became an annual event, storm or no storm. This strategy boosted Sound of Music’s average sales per square foot to $350, compared with an industry average of $150 to $200.20
ARRIVAL OF THE SUPERSTORE With ambitions to capture even larger market share, Sound of Music changed its name, in 1983,
to Best Buy Co., Inc. Shortly thereafter, it adopted its now-familiar superstore format, with an increas-ingly diversified product range. Boosted by an infusion of cash from a series of public offerings, Best Buy proceeded to grow from eight to 24 stores and saw its revenues increase from $29 million in 1984 to $290 million in 1987. 21 On July 20, 1987, Best Buy made its debut on the New York Stock Exchange (NYSE: BBY) with an initial offering of 8.3 million shares of common stock.
Best Buy changed its logo to the yellow tag in 1987, and in 1989 its stores adopted a new “grab-and-go” store format, called Concept II. Schulze’s revolutionary new approach to big-box retailing combined Walmart’s prices with Circuit City’s assortment, in a shopping warehouse with a 35,000-square-foot footprint.22 The new stores consisted of well-stocked showrooms with self-help information so that people could make their product selections independently and check out in a single stop. Answer Centers were still available for people who desired assistance, but salespeople no longer needed to attend to each individual customer or fetch merchandise from storage. This change reduced Best Buy’s employment costs by one-third, which compensated for the corresponding de-emphasis on service contracts. One analyst called Concept II “the most innovative thing to happen in this industry—ever.”23 However, Best Buy’s store format has continued to evolve and it currently operates Concept IV stores that provide an open floor format and cash registers throughout the store, and dedicated space to vendors.

GROWTH THROUGH ACQUISITIONS The year 2000 marked the launch of a new phase of inorganic growth through acquisitions. Best
Buy grew its revenues from $12.5 billion in 2000 to nearly $51 billion in 2012.25 The company first purchased Magnolia, a high-end consumer-electronics chain with 13 locations throughout Washington, California, and Oregon, for $88 million in 2000.26 The next year, Best Buy purchased Musicland for $425.1 million. The acquisition of the mall-based music and entertainment retailer gave Best Buy access to an additional 1,300 stores across the United States and Puerto Rico, including 650 Sam Goody and 400 Suncoast Motion Picture outlets. In 2002, the company acquired Geek Squad, a 24-hour computer-support task force. By 2004, Best Buy had opened Geek Squad precincts within all of its stores.27
In contrast to the rapid expansion of Geek Squad, Best Buy divested Musicland, in 2003, due to
declining sales, and increased competition from Walmart and Target in the CD segment, as well as iTunes in digital music. Sun Capital Partners Inc., a private equity firm, purchased the failing firm for only the assumption of Musicland’s debt and lease obligations. Brad Anderson, who succeeded Schulze as CEO in 2002, described the Musicland venture as “a very expensive but powerful learning experi-ence for Best Buy.”28
Best Buy then took a two-year hiatus from acquisitions before purchasing AudioVisions, a custom
integrator of electronic products such as flat-screen TVs and security solutions, in 2005.29 In December of that same year, Best Buy acquired Pacific Sales, a Los Angeles–headquartered company that special-ized in selling premium kitchen appliances, for $410 million. 30 In 2007, Best Buy announced plans to purchase Seattle-based Speakeasy Inc., a broadband and VoIP services provider, for $97 million.31 This transaction was followed by the 2008 announcement of Best Buy’s acquisition of Napster for $121 mil-lion in cash, in an effort to compete with Apple’s 70 percent share of the digital-music marketplace.32 In 2008, Best Buy also acquired Dealtree and it became the backbone of Best Buy’s customer return, trade-in, and liquidation programs.33 In 2011, Best Buy acquired Mineshaft in an attempt to move into managed IT services that it abandoned by 2014 through a divestment of Mindshift as a wholly owned subsidiary of Ricoh.34 Under CEO Joly’s tenure, Best Buy has not made an acquisition, but it did divest its operations outside North America.

Best Buy expanded internationally before refocusing on the North American market, and in 2016
only 8.4 percent of its sales were international.35 Its first cross-border expansion was the 2001 acqui-sition of Futureshop Ltd., a Canadian electronics chain, which added annual sales of $1.32 billion.36 Maintaining Futureshop as a wholly owned subsidiary, Best Buy later strengthened its Canadian pres-ence by opening 77 branded stores of its own.37 Best Buy established an active presence in the grow-ing Asian markets with its 2006 acquisition of a majority interest in the retail chain Jiangsu Five Star Appliance Co., Ltd., China’s fourth-largest appliance and consumer-electronics retailer, for $180 mil-lion.38 A year later on January 26, 2007, the first Best Buy store in China—touted as the largest Best Buy in existence—opened in Shanghai.39 Other regions quickly followed. By 2008, Best Buy had announced the opening of its first pilot stores in Mexico and Turkey, as well as multiple branded superstores in the United Kingdom and other European countries


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Columbia Southern University

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Unit [Insert unit number] Case Analysis

NOTE: It is recommended that you use the subheadings as provided below. Be sure to remove the bullet points and write your case study in paragraph form.


· Provide a brief introduction of the case.

Organizational Background

· Provide information about the company, product, and industry.

Situation Analysis

· What are the details of the situation?Make sure to include who, what, why, when, how.

· Perform a competitive analysis identifying a minimum of three competitors and comparing each of a list of attributes.

· Perform an industry analysis demonstrating the health of the industry (research and supporting quantitative information required).

· The use of analysis tools such as PESTEL, SWOT, or Porter’s Five Forces would be appropriate here.


· Identify and provide a thorough explanation of the perceived and underlying problems as well as the potential long-term effects.


· Provide alternatives or strategies that the company could implement. Include a minimum of three alternatives with multiple advantages/disadvantages of each applying the strengths and weaknesses within the company (Alternative 1, Alternative 2… using bullet points is fine).

· Discuss common considerations. What are the decision options?Are some stronger than others?What is at stake with each of these considerations (what is the level of risk)?

Recommendation and Implementation

· Choose which of the alternatives would provide the best solution to the problem, and provide thorough rationale. The use of decision-making tools would be appropriate here.

· Explain how you would implement within the company.Construct a strategy for implementation.


· Simply summarize your case in 1-2 paragraphs.


· Reference the source of the case.

· Reference additional resources you used in your evaluation. Remember that the assignment has a minimum requirement of five references. Each must have at least one corresponding in-text citation.

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