Alakesh

Patgiri
• 17020341059
Retail
Ankush
Marketing Kumar
• 17020341115

Assignment Jobin
• 17020341128
George

Krunal
Tembhurne
• 17020341158

Best Buy Navin

• 17020341172
Dhote
Arrow Electronics
Suman
Kumar • 17020341203
Sinha
1. Positioning of Best Buy relative to its competitors
 Most of Best Buy’s competition focuses on cost reduction to pass on benefits to their consumers,
but Best Buy does things a little differently. Rather than focusing on price, and only price, the
company adds value through their unique combination of physical and digital stores; something
customer won’t see at Amazon.com or Walmart.
One of the main benefit to this outlined by the case is that 40% of Best Buys online
purchases are picked up in stores. This provides ample opportunity for the blue shirts to attach more
accessories and service plans (both of which are high in margin).
 Another differentiator that Best Buy has is their line of private label brands. This is arguably their
most important defence against online competition, since you cannot find them available on third
party vendors’ websites.
Geek Squad, acquired in 2002, is arguably Best Buy’s most important brand by providing
assurance to the customer that they will have lifetime support for their product.
 Best Buy essentially positions and differentiates itself based upon three things: their blue shirts
(knowledgeable store employees), exclusive private label brands, and the ultimate customer
experience.

Valuable
Customer Service
-Experience(47 years)
-Stores always closed by
Shopping Experience
-touch and see product in real
-big range of product
-take home product immediate
after purchase
Online service
-Free shipping
-order online, pick up at store
Sustainability
-Trade in progress
-Recycling
2. VRIO Framework
Rare
-Stores always closed by
-geek squad
-touch and see product in real
-big range of product
-take home product immediate
after purchase
-Free shipping
-order online, pick up at store
Costly to imitate
-Stores always closed by
-geek squad
-touch and see product in real
-order online, pick up at store
Organised to Competitive Advantage
capture value
 Shopping Experience:-
Creating value for customers
-geek squad
through touching and seeing the
product in one of 1400 stores in
the USA
-touch and see product in real  Online Service :-
Customer can avoid long
waiting hours after ordering a
product online by dropping by
store and pick up the product
themselves
-order online, pick up at store
 Customer Service:-
Helpful well trained employees
and competent Geek Squad
 2. Is Best Buy’s competitive advantage sustainable?
 Yes, in the form of Geek Squad. This brand is so much more than a private label for Best Buy. They
provide service, support, and products, which simply cannot be matched by the competition.
Walmart has tried to imitate Geek Squad by providing its services in their stores, but has been
anything but successful at doing it.

 The second competitive advantage revealed by the VRIO framework is Best Buy’s excellent
customer service. If customers need real advice on consumer electronics, they’re not going to find it
at Walmart, Target, or Amazon.com; instead they head to Best Buy.
The company invested big dollars in training their blue shirts so that they can provide the
ultimate experience for its customers.
This is also an advantage that is sustainable due to the well-established brand image
around these blue shirts, which cannot be clouded by any attempt from their competitors.
 3. Business level strategy to combat external changes
Attract Transformational Leaders
Comeback Strategy

• Major changes in Leadership hierarchy

• Top management team was hired with exceptional experience and passion for work in
departments like Presidents/Vice-presidents of certain segments like Corporate
affairs, Online and global E-Commerce etc.
• Simplified organizational and reporting structure – more flexible and responsiveness
to market demands

Reborn Customer Experience

• In-depth data analysis to know customer trends by using new technology
• More emphasis on Shopping experience and more customer centric decision making
• More engaged and rewarding relationships with customers by giving membership
programs
 3. Business level strategy to combat external changes
Energizing Employees
Comeback Strategy

• Strong reputation for innovative human resources

• New initiative-Employee listening program that promoted open communication
• Results only work environment (ROWE) was started which permitted employees to
set their schedules as long as they stick to it
• Efforts for minority group , ‘Best to place work wit’ tag from Human Rights Campaign

Building Exclusive Brands

• Private Label brands were given more importance with the right strategy
• Right products were positioned against right brands
• Introduction of new products
• Acquiring /Licensing more brands
4. Future growth for consumer electronics
 Consumer electronics industry is one which is driven by modern and state of the art technology
and the ability to innovate relentlessly. And companies which have leveraged on this front are winning.
Consumer electronics manufacturer focuses on providing the latest and greatest of technologically
driven products to differentiate themselves from the competition. And as such the product life cycle
has grown increasingly shorter as manufacturers cannibalise their own products in an effort to
maintain customer interest and loyalty.
 Consumer electronics industry has grown into a mature industry, where the competition is
intense. A company can increase sales in a mature market by increasing its market share. So major
thrust for achieving future growth in a mature market should be towards expansion of business,
especially in growth segments, offering innovative and differentiated products and improve the reach
of its products to the targeted segment.
4. Realising growth in consumer electronics industry
 Understanding and predicting consumer demand as and when a product goes through its life
cycle is an imperative in the modern consumer electronics industry. Consumer electronics have
evolved as a measure of socioeconomic status. As a new product is launched, the prices are high and
it caters to a high income group. As the product passes through its life cycle, prices drop and it
becomes more affordable to a wider demographic, but the technological elite have already moved on
to the next generation of devices. So retailers must strike while the product is hot and cater to the
needs of the various demographics.

 Building a superior logistics and supply chain management to provide consumers with a wide
breadth of merchandise at low price. The competition in this segment is cut-throat and hence pricing
becomes a key driver of sales. So an efficient operations management will help in keeping the costs
at an optimal level and the prices competitive.

 Improving customer experience at retail stores such as giving them hands-on access to the
latest products, one-to-one tech support, etc. Also the location of retail outlets should be such that it
attracts the intended target demographic for the products.
4. Realising growth in consumer electronics industry
 Creating online retail stores to provide customers with a wide breadth of products and the
convenience of online shopping. Online stores provide the ability to undercut the competitors on
price. Without brick and mortar stores, online stores avoids the cost od retail real estate, inventory
displays, and an onsite sales force. These savings can be transferred as attractive benefits to the
customers.

 Building exclusive brands to offer niche products to the customers. A company can build its own
portfolio of private-label brands to target different segments of customers. For example, offering high
end and low end products under two different brand names.
 5. Is Best Buy’s strategy transferable to international
markets? Why or why not?
Current situation:
 Best Buy stands at 13th in Global Retail brands with a brand value of 5104 billion dollars.
 Low score in terms of Brand Momentum (3/10) which measures its growth potential of brand driven
earnings.
 In consumer perceptions survey, brand awareness of Best Buy has fallen while that of Amazon and other
brands have increased significantly.
 It closed all of its branded stores in China, Turkey and UK after it decided to shift from Big Box stores to
Connected Box format.
 Market share of Best Buy stands at 3.2% in worldwide consumer electronics market.

Measures deployed by Best Buy:

 State of the art logistics, inventory provided same day deliveries.
 Renew Blue:
 Attracting Transformational Leaders
 Invigorating customer experience
 Energize employees
 Build exclusive brands
 Trying to become an “all things format to all shoppers” to combat the likes of Apple and Amazon.
 Factors affecting Best Buy’s presence build-up in foreign markets:
The existence of branded stores in selected countries like Canada and Mexico after the
closures in China, turkey and UK have impacted significantly.
To become an All store format, it needs to compete with Amazon and Apple stores which
have gained high market share in foreign countries by their selective offerings.
Sales being in direct correlation with macroeconomic factors adds to the differentiation
each country offers if Best Buy has to increase its presence in foreign markets.
Companies like Amazon is beating Best Buy in their own formats as the customers come
to the retail stores to try out the product and then ordering it from Amazon at
comparatively low prices.
The players need to localize their product selection and sales format in order to compete
with established market players.
The pricing strategy that Best Buy offers may not aid in generating the required returns
that the company expects as the similar products are available on other formats.
It is not like Apple which offers expensive products as there is no other player offering
same items at lower prices.
Hence the strategy isn’t transferable in international market
1. What should Scheihing do about Eagle?

Eagle management team were inefficient in maintaining the accurate

inventory data. Which were not at all sink with Arrow’s operational
excellence image in the market. Scheihing must act against Eagle
considering the operational loss it was incurring.
Since saving at operation would increase profit margins, Scheihing should
implement the same inventory control practices which were followed at
arrow’s warehouses.
In such a competitive scenario even marginal inefficiency can lead to
exponential losses, it was need of the hour to take precautionary actions
against the haphazard inventory control practices of Eagle and implement
proper Integrated IT network in sink with arrow’s mainframe.
2. How does inaccurate inventory data affect arrow’s
performance ?
The inaccurate inventory data would eventually complicated and slow down the ability
to complete the work of the warehouse employees near to the inventory problem.
This required involvement of staff into non value adding activity.
In case after inventory audit, the physical count varied more than 5%, in comparison
to system data, the ware house was declared out of control and they had to do
corrective operational actions.
In case a warehouse had 10% inaccurate inventory data for a particular warehouse,
the head of the facility was transferred or fired.
Once because of the failure in maintaining accurate data at one of their warehouse at
Texas, the warehouse had to be shut down.
Whenever there was difference between inventory levels shown in WMS and
mainframe system, there was need to clean up the inventory data .
A team of 21 people was employed for inventory control, which required additional
cost to be paid to those staff as salary. There were arguments for reducing the size of
the Asset Control Group.
3. Why do DC inventory data become inaccurate?
Inefficient processes for inventory recording.
Instead of cycle count, if annual inventory count is followed, it would lead to huge discrepancies
in inventory record accuracy. The reason being that this may lead to a mismatch between
system inventory and physical inventory, over time.
Making corporate office managers responsible for maintaining inventory accuracy.
As per traditional practices, corporate managers who were made responsible for fixing
inventory errors weren’t enthusiastic towards it as they considered it drudgery type work,
leading to them shirking the work.
Organization culture and senior management not driving inventory accuracy.
Companies where the top management doesn’t cultivate a culture for maintaining accurate
inventory records has seen them plagued with inventory data errors.
Involving salespeople in warehouse operations.
Salespeople in order to achieve their sales targets may try to drive warehouse operations to
issue their orders first, leading to interference in scheduled dispatches, thus contributing
towards inventory data error.
Absence of an Asset Controls Group.
The absence of asset control group, which cleans up inventory data, and finds out the root
causes of inventory data errors is another factor for inaccurate inventory data.
4. What does Arrow do to keep inventory data clean? Is this
approach excessive? What is the trade-off?
Inventory Data Cleaning:
 Asset Control Group: Independent support group for Inventory Data Cleaning
1. Arrow has setup an Asset Control Group. The reason being even after following through the detailed inventory
recording processes and management intervention, occasional differences arises between system inventory and
physical inventory. So, there was a need to clean up the inventory data. This role was fulfilled by Asset Control
Group.
2. They ensure that all warehouses and sales offices timely and accurately report all inventory and sales data to
them. Then they research and review the data to ensure all items have an accurate offset. Through this, they
were able to reduce inventory losses, by researching the root causes of the errors and trying to eliminate them.
Approach:
 However, the Asset Control Group itself felt this approach was excessive, as they had improved Arrow’s inventory
control processes substantially. So, frequent data ‘clean up’ was not deemed to be necessary.
Trade-Off:
 A large Asset Control Group may not be required to maintain inventory recording accuracy at Arrow. Thus trade-
off is to reduce the existing 21 member team strength of Asset Cleaning Group so that they could be diverted to
other functions where they may be required. The reduced strength would be capable enough to data clean up.
Thank you