Best Buy
Content
SUPPLY CHAIN OF
Type Traded as
Public NYSE: BBY S&P 500 Component Retail 1966 as Sound of Music 1983 as Best Buy Richard M. Schulze Richfield, Minnesota, U.S. Richard M. Schulze (Chairman) G. Mike Mikan (interim CEO) Consumer electronics 180,000 (2010) Future Shop Geek Squad Magnolia Pacific Sales Speakeasy
Industry Founded
Founder(s) Headquarters Key people
Products Employees Subsidiaries
Website
bestbuy.com
“Brief About Best Buy”
Best Buy Co is an Americanspecialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Puerto Rico, Mexico, Canada and China. The company’s subsidiaries include Geek Squad, CinemaNow, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these operate more than 1,150 stores domestically and internationally. The company operates over 100 Best Buy Express Automated Retail stores, airports and malls around the U.S. The company is headquartered in Richfield, Minnesota, United States. On March 9, 2009, Best Buy became the largest electronics retail store in the eastern United States. Fry's Electronics remains a major competitor in the western United States. Best Buy is also a retailer of cellular phones with phones from Verizon Wireless, AT&T Wireless, Sprint PCS, and T-Mobile. Best Buy also has standalone Best Buy Mobile stores in shopping malls that sell a subset of products carried at the larger stores. In 2011, during the three-month period ended February 26, Best Buy saw its revenue and profits slide, generating a profit of $651 million on revenue of $16.26 billion. In comparison to the same period in 2010, it tallied $16.55 billion in revenue and a $779 million profit.Various reasons have been given for the decline. In 2012, Best Buy announced it would be closing fifty stores in the USA, including a high-profile store on Newbury Street in Boston, as part of a "transformation strategy". Also on April 10, 2012, Brian Dunn resigned as CEO under a mutual agreement that it was time for new leadership to address Best Buy’s problems. Director G. Mike Mikan has been named interim CEO of the company.
“Business operations”
Best Buy sells consumer electronics as well as a wide variety of computers, software, videogames, music, DVDs, Blu-raydiscs, mobile phones, digital camera, car stereos and video cameras, as well as home appliances , in anoncommissioned sales environment. Each store also includes installation of car audio and video equipment. Many Best Buy employees, especially at the corporate level, are under a policy of Results Only Work Environment. This model is increasingly being integrated at the store level. In September 2008, partially in an effort to eliminate losses from the Product Replacement Plan, an expanded warranty for smaller electronics, Best Buy changed their product guarantee system to Geek Squad Black Tie Gadgets and Gizmos.One notable change under the Gadgets and Gizmos plan is the gaming console exchange policy. Under this new system, the company sends the customer's console to a changing site if a hardware failure occurs after 30 days, instead of replacing it with a new one. On the same time company modified its Performance Service Plan, offered on many bigger ticket items, to a system called Geek Squad Black Tie Protection. The name of this service has changed to Geek Squad Protection as of October 2011 in some markets. The new service strategy includes variable levels of coverage. The standardlevel plan operates similarly to the previous system, and new premium-level plans include extra services like limited free telephone troubleshooting, multi-year Geek Squad anti-virus/spyware protection, HDTV calibration, preventative maintenance checks on major appliances, accidental damage coverage, a 20% trade in bonus, and prioritization of service claims. Additionally, customers who purchase Geek Squad Black Tie Protection can claim points that, when accumulated on a Best Buy RewardZone account, can be used toward future purchases from the store or online .
Best Buy operates numerous Best Buy Mobile stores within the U.S. as a joint venture with The Carphone Warehouse, using its successful UK business model; 13 of these are stand-alone locations (primarily in Manhattan). Best Buy Mobile locations offer customers a wider variety of cell phones than their other locations, some of which are "unlocked" phones that can be used on any GSM network. Best Buy Mobile also offers services comparable to those from carrier stores, including but not limited to a number transfer machine, warranty service on any phone, loaner phones, and the most popular carriers. Most current Best Buy Mobile stores are located in or near the Northeast region of the U.S, though the company is expanding such that most or all U.S. locations will include Best Buy Mobile services by the end of 2008. Best Buy now provides a new Buy Back Program. The program enables the customers to purchase the program at a set price, dependent on the item purchased and over time sell the item back to Best Buy at a set cost. For example, the first 6 months give 50% of the original cost back to the customer on a Best Buy gift card. Essentially the program "future proofs" the technology, allowing the consumers to get the technology they want now, and have a guaranteed amount waiting for them when it's time to upgrade.
“Best Buy Supply Chain Management”
Best Buy is operating a total of 3,942 stores under various formats world-wide. It depends on information technology to optimize all its processes right from the logistics to the price optimization stage. Best Buy does numerous interactions between its salespersons and its customers such as feedback on products, stores formats, and services to help it devise strategies for running its stores and other backend operations. Best Buy also shares relevant data with its suppliers. This helps both Best Buy and its suppliers in rationalizing their operations. Brad Anderson, who was Best Buy's CEO in 2002, was the brain behind the transformation of the company from a big box retailer to a customer-centric retailer. Best Buy follows a push model for its supply chain where similar product assortments were supplied to all its stores. The company imported most of its products from Asia. Best Buy's supply chain is an inseparable part of the new strategy. To support the company's transformation, the supply chain is changing in several important ways:
Non-sales activities are moving higher up the supply chain. In an effort to maximize salespeople's time with customers, the company is moving certain non-sales activities out of the stores—and up the supply chain. For example, shipments are being configured to individual stores' floor plans so that store employees don't have to spend as much time moving products into the proper places. Employees have more autonomy to serve local-market needs. Best Buy is also giving store employees greater flexibility in responding to demand. Which mean,
for instance, changing the floor layout or overriding an inventory-management plan so that a store can stock more of certain items to meet local demand. Software is being developed to allow dispatchers to change delivery schedules even when loads are in transit.
Better information flow. The supply chain is being depend upon to improve the flow of information. Sales associates will have access to detailed data on product flows from the time an item is manufactured to its arrival at a store and will thus be able to provide consumers with more reliable information on when items will be available. At the same time, the company is making the supply chain more efficient so that there is less waste and greater accuracy in shipments and, thus, a reduced need for markdowns. Greater access to information. Dispatchers and store associates will have better information on the status of loads. In addition, some seventeen Best Buy suppliers are using a process known as collaborative planning, forecasting, and replenishment (CPFR) that automates replenishment by linking suppliers and buyers electronically.
“Learning from Best Buy's supply chain approach”
Focus less on cost and more on making sure the company is not missing opportunities to satisfy customers. "Don't look at the supply chain from a cost perspective," says Bob Willett, Best Buy's chief information officer and executive vice president of operations. "Look at the size of missed opportunities. When a customer opportunity is missed, you can't get it back."
Allow frontline employees to influence the supply chain to meet local demand— for instance, by letting employees override inventory-management plans. The facts of the customer experience must drive the supply chain. Give salespeople more time to sell by taking nonsales tasks, such as shuffling inventory around, out of their hands. Develop efficient and timely communications systems that allow marketers and salespeople to see into the supply chain. Radio frequency ID—RFID—can play a major role in providing more accurate information on inventory, product flows, and deliveries.
Type Traded as
Public NYSE: BBY S&P 500 Component Retail 1966 as Sound of Music 1983 as Best Buy Richard M. Schulze Richfield, Minnesota, U.S. Richard M. Schulze (Chairman) G. Mike Mikan (interim CEO) Consumer electronics 180,000 (2010) Future Shop Geek Squad Magnolia Pacific Sales Speakeasy
Industry Founded
Founder(s) Headquarters Key people
Products Employees Subsidiaries
Website
bestbuy.com
“Brief About Best Buy”
Best Buy Co is an Americanspecialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Puerto Rico, Mexico, Canada and China. The company’s subsidiaries include Geek Squad, CinemaNow, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these operate more than 1,150 stores domestically and internationally. The company operates over 100 Best Buy Express Automated Retail stores, airports and malls around the U.S. The company is headquartered in Richfield, Minnesota, United States. On March 9, 2009, Best Buy became the largest electronics retail store in the eastern United States. Fry's Electronics remains a major competitor in the western United States. Best Buy is also a retailer of cellular phones with phones from Verizon Wireless, AT&T Wireless, Sprint PCS, and T-Mobile. Best Buy also has standalone Best Buy Mobile stores in shopping malls that sell a subset of products carried at the larger stores. In 2011, during the three-month period ended February 26, Best Buy saw its revenue and profits slide, generating a profit of $651 million on revenue of $16.26 billion. In comparison to the same period in 2010, it tallied $16.55 billion in revenue and a $779 million profit.Various reasons have been given for the decline. In 2012, Best Buy announced it would be closing fifty stores in the USA, including a high-profile store on Newbury Street in Boston, as part of a "transformation strategy". Also on April 10, 2012, Brian Dunn resigned as CEO under a mutual agreement that it was time for new leadership to address Best Buy’s problems. Director G. Mike Mikan has been named interim CEO of the company.
“Business operations”
Best Buy sells consumer electronics as well as a wide variety of computers, software, videogames, music, DVDs, Blu-raydiscs, mobile phones, digital camera, car stereos and video cameras, as well as home appliances , in anoncommissioned sales environment. Each store also includes installation of car audio and video equipment. Many Best Buy employees, especially at the corporate level, are under a policy of Results Only Work Environment. This model is increasingly being integrated at the store level. In September 2008, partially in an effort to eliminate losses from the Product Replacement Plan, an expanded warranty for smaller electronics, Best Buy changed their product guarantee system to Geek Squad Black Tie Gadgets and Gizmos.One notable change under the Gadgets and Gizmos plan is the gaming console exchange policy. Under this new system, the company sends the customer's console to a changing site if a hardware failure occurs after 30 days, instead of replacing it with a new one. On the same time company modified its Performance Service Plan, offered on many bigger ticket items, to a system called Geek Squad Black Tie Protection. The name of this service has changed to Geek Squad Protection as of October 2011 in some markets. The new service strategy includes variable levels of coverage. The standardlevel plan operates similarly to the previous system, and new premium-level plans include extra services like limited free telephone troubleshooting, multi-year Geek Squad anti-virus/spyware protection, HDTV calibration, preventative maintenance checks on major appliances, accidental damage coverage, a 20% trade in bonus, and prioritization of service claims. Additionally, customers who purchase Geek Squad Black Tie Protection can claim points that, when accumulated on a Best Buy RewardZone account, can be used toward future purchases from the store or online .
Best Buy operates numerous Best Buy Mobile stores within the U.S. as a joint venture with The Carphone Warehouse, using its successful UK business model; 13 of these are stand-alone locations (primarily in Manhattan). Best Buy Mobile locations offer customers a wider variety of cell phones than their other locations, some of which are "unlocked" phones that can be used on any GSM network. Best Buy Mobile also offers services comparable to those from carrier stores, including but not limited to a number transfer machine, warranty service on any phone, loaner phones, and the most popular carriers. Most current Best Buy Mobile stores are located in or near the Northeast region of the U.S, though the company is expanding such that most or all U.S. locations will include Best Buy Mobile services by the end of 2008. Best Buy now provides a new Buy Back Program. The program enables the customers to purchase the program at a set price, dependent on the item purchased and over time sell the item back to Best Buy at a set cost. For example, the first 6 months give 50% of the original cost back to the customer on a Best Buy gift card. Essentially the program "future proofs" the technology, allowing the consumers to get the technology they want now, and have a guaranteed amount waiting for them when it's time to upgrade.
“Best Buy Supply Chain Management”
Best Buy is operating a total of 3,942 stores under various formats world-wide. It depends on information technology to optimize all its processes right from the logistics to the price optimization stage. Best Buy does numerous interactions between its salespersons and its customers such as feedback on products, stores formats, and services to help it devise strategies for running its stores and other backend operations. Best Buy also shares relevant data with its suppliers. This helps both Best Buy and its suppliers in rationalizing their operations. Brad Anderson, who was Best Buy's CEO in 2002, was the brain behind the transformation of the company from a big box retailer to a customer-centric retailer. Best Buy follows a push model for its supply chain where similar product assortments were supplied to all its stores. The company imported most of its products from Asia. Best Buy's supply chain is an inseparable part of the new strategy. To support the company's transformation, the supply chain is changing in several important ways:
Non-sales activities are moving higher up the supply chain. In an effort to maximize salespeople's time with customers, the company is moving certain non-sales activities out of the stores—and up the supply chain. For example, shipments are being configured to individual stores' floor plans so that store employees don't have to spend as much time moving products into the proper places. Employees have more autonomy to serve local-market needs. Best Buy is also giving store employees greater flexibility in responding to demand. Which mean,
for instance, changing the floor layout or overriding an inventory-management plan so that a store can stock more of certain items to meet local demand. Software is being developed to allow dispatchers to change delivery schedules even when loads are in transit.
Better information flow. The supply chain is being depend upon to improve the flow of information. Sales associates will have access to detailed data on product flows from the time an item is manufactured to its arrival at a store and will thus be able to provide consumers with more reliable information on when items will be available. At the same time, the company is making the supply chain more efficient so that there is less waste and greater accuracy in shipments and, thus, a reduced need for markdowns. Greater access to information. Dispatchers and store associates will have better information on the status of loads. In addition, some seventeen Best Buy suppliers are using a process known as collaborative planning, forecasting, and replenishment (CPFR) that automates replenishment by linking suppliers and buyers electronically.
“Learning from Best Buy's supply chain approach”
Focus less on cost and more on making sure the company is not missing opportunities to satisfy customers. "Don't look at the supply chain from a cost perspective," says Bob Willett, Best Buy's chief information officer and executive vice president of operations. "Look at the size of missed opportunities. When a customer opportunity is missed, you can't get it back."
Allow frontline employees to influence the supply chain to meet local demand— for instance, by letting employees override inventory-management plans. The facts of the customer experience must drive the supply chain. Give salespeople more time to sell by taking nonsales tasks, such as shuffling inventory around, out of their hands. Develop efficient and timely communications systems that allow marketers and salespeople to see into the supply chain. Radio frequency ID—RFID—can play a major role in providing more accurate information on inventory, product flows, and deliveries.
