Running Header: Best Buy

Best Buy

[Name of Instituion]

Table of Contents

Introduction3

Discussion3

Best Buy's Mission Statement3

General Environment3

Analysis of Porter's Five Competitive Forces5

Economic and Industry environment6

Company Analysis8

SWOT Analysis9

Tangible and Intangible Resources12

Current Strategy13

Competitive Advantage14

Conclusion15

References16

Best Buy

Introduction

Richard and Gary Smoliak founded Sound of Music in 1966. It started out as an audio specialty store; in 1983, the company changed its name to Best Buy Company Inc. This report will discuss mission of Best buy, general environment which will include the risks for the company, and economic and industry analysis. It will further analyze the company and highlight its strengths, weakness, opportunities and threats and will discuss briefly tangible and intangible resources. In last, it will include Best buy current strategy and competitive advantage.

Discussion

Best Buy's Mission Statement

To offer customers a perspective they can trust in the midst of techno stress and make technology live up to its promises for people everywhere.

This is absolutely a great mission statement. Remember a mission statement declares a company's purpose. They claim to learn what customers want and not giving them what they think they need. 

General Environment

Nature of Problems

The risk of a challenging economy plagued BBY as the retail technology sector became much more price competitive as consumers turned to cheaper alternatives. This in turn lowered BBY's net profit margin. While BBY's revenue growth is a fairly optimistic sign, the declining net profit margin exposes some risk in the company's profitability. (Kwok, Bender, Lange, 2009)

Another risk to Best Buy is the economic condition in the United States and other key international markets. If consumer discretionary spending declines or interest rates rise, they could have a severe impact on sales and revenues. If interest rates rise, it will be harder for consumers to finance purchases and will result in less demand for discretionary items. Best Buy also faces heavy competition from other forms of retail commerce, internet businesses and traditional store-based retailers, and. The retail industry is highly competitive, which in turn affects virtually every business decision. This competition could cause Best Buy to decrease prices and raise costs to stay competitive, which is probably a main reason for BBY's declining profitability in recent years.

Like all companies, Best Buy is subject to legal and regulatory developments, such as changes in tax laws, stricter credit regulation, and litigation trends. Best Buy's foreign subsidiaries expose the company to accounting, legislative, regulatory, judicial, economic and political risks that apply to the countries in which they do business. BBY is subject to foreign risks because it has international operations that are subject to exchange rate risks. BBY's financial position is strengthened if the U.S. dollar is strong compared to local currencies.

Declining demand and rising interest rates result in a reduction of sales and less cash on hand, the company's business operations may suffer. Best Buy's sales and profits are relatively predictable though, as they have steadily increased at about 16% the past 10 years according to Value Line. Growth of best buy depends on the success of their strategies. If BBY's management is wrong in their judgment ...