Best Buy is one of the most influential players in the consumer electronics industry. The company sells a wide range of electronics that include computers and camera equipment. It is common for firms to develop clear mission statements through which they convey their purposes. Best Buy is different. This firm does not have a clear and official mission statement. The lack of a mission statement has been blamed for the company’s failure to invest in strategies that will allow it to thrive (Farfan, 2017). This firm seems more focused on surviving instead of growth. If the firm is to maintain its position in the consumer electronics industry, it needs to focus its efforts on growth.
Company profile
As noted above, Best Buy is one of the key firms in the consumer electronics industry. The primary operations that the firm is involved in concerns the sale of such electronic products as computers, cameras, gaming consoles and cell phones, among many others. While the firm’s operations are mostly based in the US, it has established a presence in such international markets as Canada and Mexico (“Best Buy Co Inc”, n.d). In addition to selling electronic devices, the firm also offers repair services through the Greek Squad program. Best Buy has set up hundreds of stores in the markets where it operates.
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Problem faced
As is the case with any other company, Best Buy faces numerous challenges. One of the greatest challenges that threaten Best Buy’s dominance in the consumer electronics industry is declining revenue. In 2017, the firm witnessed a drop in revenue from the sale of products (BI Intelligence, 2017). This decline was witnessed in the in-store sales of products. Revenue from sales on the firm’s online platform registered an encouraging increase. The decline in revenue is indeed worrying given the vital role that revenue plays in keeping a firm alive. Unless it is able to revive its revenue, Best Buy risks being forced out of the electronics industry. This industry is intensely competitive as different players compete for the attention and monies of customers. The decline in revenue also suggests that Best Buy is not committed to ensuring sustainable growth. Had it developed a mission statement which captures its desire for growth, the firm would undoubtedly dedicate more effort to ensure that it thrives.
Assumptions about problems
A number of factors received blame for the challenge described above. Lack of sufficient inventory is among these factors (BI Intelligence, 2017). Best Buy blamed empty shelves for the decline in revenue. Its suppliers failed to provide it with adequate stock. The emergence of online platforms that allow customers to purchase products is another factor that was blamed for the fall in revenue. Best Buy noted that gamers were abandoning its stores as they preferred to purchase their games from online platforms (BI Intelligence, 2017). The recall of such products as the Samsung Galaxy Note 7 is yet another factor that led to the decline in revenue. While these three factors have been identified as being responsible for the decline in revenue, assumptions about other possible causes of the decline can be made. For example, it can be argued that the rise of such online retail stores as Amazon has attracted customers away from Best Buy. It is also fair and reasonable to blame the company’s lack of a mission statement for the decline in revenue. With a clear mission statement, the firm would be able to focus its efforts and resources on growth.
Recommendations
Left unaddressed, the challenge that Best Buy suffers could further erode its performance. To fix this challenge, the firm needs to swiftly implement a number of strategies. Moving away from its brick and mortar store model is one of these strategies. Today, more and more companies are embracing platforms in their efforts to boost sales (Farber, 2016). Best Buy needs to develop a reliable online store from where its customers are able to place orders. Another strategy that the firm should adopt involves developing tighter ties with its supplies. In the discussion above, it has been mentioned that inadequate inventory is among the factors behind the decline in revenue. As it creates stronger ties, Best Buy will be able to gain guarantees from its supplies that they will always provide adequate stock.
References
Best Buy Co Inc (BBY.N). (n.d). Retrieved 26 th January 2018 from https://www.reuters.com/finance/stocks/company-profile/BBY.N
BI Intelligence. (2017). Best Buy Struggles with Omnichannel. Retrieved 26 th January 2018 from http://www.businessinsider.com/best-buy-struggles-with-omnichannel-2017-3?IR=T
Farber, M. (2016). Consumers are now doing most of their Shopping Online. Retrieved 26 th January 2018 from http://fortune.com/2016/06/08/online-shopping-increases/
Farfan, B. (2017). Best Buy Mission Statement, Company Vision and Values. Retrieved 26 th January 2018 from https://www.thebalance.com/best-buy-mission-statement-2891824
