Best Buy is a Minnesota based company that started as the Sound of Music with gross sales of $173,000 in 1967 and grew to about $40-billion in under 40 years. With over 660 stores spanning Canada and the United States and 128,000 employees company wide, Best Buy (trading name: BBY) was named the company of the year by Forbes magazine in 2004. From the beginning, the Sound of Music had a keen sense of uniqueness, starting off as an audio specialty store. The quality and detail that founder Richard M. Schulze focused on led to the incredible success story that is Best Buy.
Quoted from their website, the company's mission is to be the dominant specialty retailer by providing the best combination of price, selection and customer service. Thanks to recent developments, such as the implementation of well thought out strategies, the culture of success that they have created, and the focus Best Buy has put on its relationship with its employees, their mission has been accomplished.
At Best Buy, strategy is a crucial pillar on which the company was founded and on which it stands and survives until today in the face of such giants as Wal-Mart and Sears. The end of 2005 marked the end of another decade in the company's history which is continually recognized by a change in strategy. From this, the company has learnt to embrace change and make it actually work to the advantage of the company.
Thus, in mid-2004, the customer-centric strategy was introduced in response to growing credit card and return frauds brought on by bad customers. This strategy was sampled in 100 of 670 stores across Canada and the United States in an effort to identify good and bad customers. To lure the high-spenders, stores are stocking more merchandise and providing services that are more appealing to them.
To deter the undesirables, it is cutting back on promotions and sales tactics that tend to draw them, trimming them from marketing mailing lists, and adding a 15 percent restocking fee on returned items. Shunning customers is a delicate task, says CEO Brad Anderson, we will first try to turn our bad customers into profitable ones by selling them warranties or more profitable services.
Tags:Best Buy, Richard M. Schulze, Wal-Mart and Sears.
[...] When compared to Gallup's database of workgroup engagement scores Best Buy did not rank well at all. Employees gave two items particularly low ratings, work, my opinions seem to count” and associates or fellow employees are committed to doing quality work.” Furthering the already instituted concept of valuing the opinion of the employee, Best Buy has ingrained into its corporate culture the process of recognition to combat these new low ratings. They use recognition daily through a variety of programs so that people are continuously receiving positive reinforcement for their contributions and it has a tremendous affect on what they have set out to accomplish. [...]
[...] The culture created at Best Buy has led to a great deal of success. As a Forbes magazine article highlights, Best Buy has succeeded primarily because of their willingness to change. In particular, their stores and business model precisely four times in the last 37 years. A typical 45,000- square-foot location is filled with thousands of different products it is open 77 hours a week and is staffed by 120 employees, many of them young adults in their first or second jobs. [...]
[...] They were also treated to a favourite team event, a local baseball game to spend time as a team in a social atmosphere for a change. Best Buy is known for its continually increasing positive employee relations. Most recently was the implementation of tactics to eliminate employee burnout. With a normal scheduled workweek, workers arrange their schedules with their boss in advance. However, under the newly instituted program called ROWE, short for “results-only work environment,” the boss has no say in scheduling and can judge employees only on tasks successfully completed, even if none were done in the office. [...]
[...] The goal is to steer them into a back room that displays $12,000 home-theatre systems. Regardless of the approach, the pilot program shows promise. The 100 stores currently piloting the initiative showed 30 percent sales gains over other US-Canada based Best Buy stores, while their “close rates” (percentage of shoppers who make a purchase) also improved by six percent over these other stores. However, in December 2005, Best Buy said its third-quarter profit would fall well short of Wall Street expectations because of higher costs involved in implementing this strategy. Mr. [...]
Online readingwith our online reader
Content validatedby our reading committee