Best Buy has had some success over the years since the recession of 2007. Despite them leading in the market share over their competitors at the time, as well as large and consistent profits, as well as a healthy stock return, and a global expansion strategy. In achieving this goal, they also brought down 2 of their biggest competitors which were Circuit City and CompUSA.
With CompUSA temporarily out of the picture in 2007 due to the economic recession, and a big time reduction in consumer discretionary spending that needed that last bit of leverage to completely topple Circuit City in 2009. This allowed Best Buy to be a clear leader in the consumer electronics retail segment. However, Best Buy’s economic fortune ended up taking a hit with new competition like Wal-Mart, Radio Shack, and Costco that are also getting into the consumer electronic retail segment. This could be bad …show more content…
Issue Analysis
Best Buy’s competition like Wal-Mart has done pretty good in the recession of 2007 against Best Buy. Their revenue growth was at the end of fiscal years from 2008 to 2011, a moderate and steady growth of 3.65 percent per year, and the firm’s net profit margin increased steadily from 3.3 percent in 2009 to an increase of 3.89 percent in 2011.
Other competition with Best Buy, like Costco, has a reputation for higher product quality, but it backfired on then when the economic recession hit, because many customers wanted to return to the “bare bones” purchasing habits. This had pretty much made Costco’s 6.57 percent for three year revenue growth that was dwarfed by the five year average of 8.05 percent. However, Costco had a low profit margin of 1.65 percent average between 2007 and 2010.
Radio Shack is another company that is giving Best Buy a lot of competition. Revenue growth of this company grew in 2010, and was at 4.6 percent, that was an average of 1.7 percent for the 3 years prior to, and a -2.52 % for the five years prior to those years.
III. Discussion of
With CompUSA temporarily out of the picture in 2007 due to the economic recession, and a big time reduction in consumer discretionary spending that needed that last bit of leverage to completely topple Circuit City in 2009. This allowed Best Buy to be a clear leader in the consumer electronics retail segment. However, Best Buy’s economic fortune ended up taking a hit with new competition like Wal-Mart, Radio Shack, and Costco that are also getting into the consumer electronic retail segment. This could be bad …show more content…
Issue Analysis
Best Buy’s competition like Wal-Mart has done pretty good in the recession of 2007 against Best Buy. Their revenue growth was at the end of fiscal years from 2008 to 2011, a moderate and steady growth of 3.65 percent per year, and the firm’s net profit margin increased steadily from 3.3 percent in 2009 to an increase of 3.89 percent in 2011.
Other competition with Best Buy, like Costco, has a reputation for higher product quality, but it backfired on then when the economic recession hit, because many customers wanted to return to the “bare bones” purchasing habits. This had pretty much made Costco’s 6.57 percent for three year revenue growth that was dwarfed by the five year average of 8.05 percent. However, Costco had a low profit margin of 1.65 percent average between 2007 and 2010.
Radio Shack is another company that is giving Best Buy a lot of competition. Revenue growth of this company grew in 2010, and was at 4.6 percent, that was an average of 1.7 percent for the 3 years prior to, and a -2.52 % for the five years prior to those years.
III. Discussion of