best buy vs walmart stores. assignment by bashadulalam

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									BEST BUY Co. lnc


Best Buy Co., Inc. is a multinational retailer of consumer electronics, home office
products, entertainment products, appliances and related services. The Company
operates retail stores and call centers, and conducts online retail operations under a
variety of brand names, such as Best Buy (,,, Best Buy Mobile (, The Carphone Warehouse
(, Five Star (, Future Shop (,
Geek Squad, Magnolia Audio Video, Napster (, Pacific Sales and The
Phone House ( The Company operates in two segments:
Domestic and International. During the fiscal year ended February 26, 2011 (fiscal
2011), the Company opened 134 new stores and closed seven stores in its Domestic
segment. During fiscal 2011, the Company opened 123 new stores and closed 103
stores in its International segment, primarily within its Best Buy Europe business.

Wal-mart Stores, lnc


Wal-Mart Stores, Inc is an American public corporation that runs a chain of
large discount department stores and a chain of warehouse stores. In 2010 it was
the world's largest public corporation by revenue, according to theForbes
Global 2000 for that year. The company was founded bySam Walton in 1962,
incorporated on October 31, 1969, and publicly traded on theNew York Stock
Exchange in 1972. Wal-Mart, headquartered inBentonville, Arkansas, is the
largest majority private employer and the largestgrocery retailer in the United
States. In 2009, it generated 51% of its US$258 billion sales in the U.S. from
grocery business. It also owns and operates theSam's Club retail warehouses in
North America.
Wal-Mart has 8500 stores in 15 countries, with 55 different names.[10] The
company operates under its own name in the United States, including the 50
states. It also operates under its own name inPuerto Rico. Wal-Mart operates in
Mexico as Walmex, in the United Kingdom as Asda in Japan as Seiyu, and in
India as Best Price. It has wholly-owned operations in Argentina, Brazil, and
Canada. Wal-Mart's investments outside North America have had mixed results:
its operations in the United Kingdom, South America and China are highly
successful, while it was forced to pull out of Germany and South Korea when
ventures there were unsuccessful.

BEST BUY Co. lnc

Profile of Company

 Best Buy is the nation's largest specialty retailer of electronics, computers and
appliances with stores located in major malls across America.

The company's brands include Best Buy, Audiovisions, Best Buy Mobile, The
Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video,
Napster, Pacific Sales, and The Phone House.

Best Buy has 1,099 stores in 49 states and Puerto Rico. The international segment
included 2,834 stores which includes Carphone Warehouse in the U.K. and Five Star
in China.

Best Buy also has special sections in stores featuring Apple products and stores with
Best Buy Mobile sections.

In fiscal 2011, the company reported revenues of $50.3 billion, a 1% increase, and
net income of $1.27 billion. Online revenue grew 14% to $2.5 billion.

―Overall demand for key consumer electronics products was a challenge for the
industry last year,‖ said Brian Dunn, CEO of Best Buy. ―Thanks to the hard work and
dedication of our employees, we accomplished several key initiatives during the year
that helped to both partially mitigate these challenges and build critical capabilities
for profitable growth such as continued growth in connections, actions taken to
enhance our multi-channel efforts including online and improve returns in our
international business.‖

The company said it plans to close its Best Buy brand stores in China but will focus
on opening more Five Star stores in the country instead.

The company also operates Geek Squad, which offers on-site and in-store support
for computer services to consumer and commercial customers.

Wal-mart Stores, lnc

Profile of company

Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. The
company’ s Walmart U.S. segment offers meat, produce, deli, bakery, dairy, frozen
foods, alcoholic and nonalcoholic beverages, and floral and dry grocery; health and
beauty aids, baby products, household chemicals, paper goods, and pet supplies;
electronics, toys, cameras and supplies, photo processing services, cellular phones,
cellular service plan contracts and prepaid service, and seasonal merchandise;
fabrics and crafts, stationery and books, automotive accessories, hardware and
paint, and sporting goods; pharmacy and optical services; shoes, jewelry, and
accessories, as well as apparel for women, girls, men, boys, and infants; and home
furnishings, housewares and small appliances, bedding, home décor, outdoor living,
and horticulture products through discount stores, supercenters, and neighborhood

markets, as well as through This segment also provides financial
services and products comprising money orders, wire transfers, check cashing, and
bill payment. Its Walmart International segment includes various formats of retail
stores, discount stores, supermarkets, supercenters, hypermarkets, restaurants,
apparel stores, Sam’ s Clubs, and online retail operations. This segment also
operates banks that focus on consumer lending, as well as consumer credit
products. The company’ s Sam’ s Club segment offers merchandise comprising
hardgoods, softgoods, and selected private-label items under the Member’ s Mark,
Bakers & Chefs, and Sam’ s Club brands through warehouse membership clubs in
the United States, as well as through It operates stores in the United
States and Puerto Rico, as well as in Argentina, Brazil, Canada, Chile, Costa Rica,
El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, the United Kingdom,
China, and India. The company was founded in 1945 and is based in Bentonville,

BEST BUY Co. lnc

History and Background

Best Buy Inc is a leading provider of consumer electronics, The company is a top
rated Fortune company and is considered to the largest retailer within its sector
throughout the United States. Best Buy Inc was founded in 1966 as an audio
specialty store called Sound of Music, A year later 1967, the company was acquiring
Kencraft Hi Fi Company and later Bergo Company, It opened two additional stores
and had an initial yearly income of $173,000. the company would continue to grow
and flourish over the next few years, hitting the one million dollar annual revenue in
1970, the company changed names in 1983 when the company opens its latest store
which would be the first expanded store selling a wide range of products at
discounted pricing. The company also began selling appliances at this time and
videocassette records. Today Best Buy Inc also has a number of subsidiaries this
includes its computer repair service the Geek Squad, Magnolia Audio Video and
Pacific Sales, the company operates both       retail stores and Future Shop label
products and stores in Canada. Best Buy Inc is an aggressive company and set out
to become one of the best providers of consumer electronics. The most recent plan
statement in 2007, the Company plans to operate more than 1800 retail stores
around the world. In 2009, the company open its first United Kingdom based stores
and the company acquired a 50 percent state in the UK based mobile phone
company known as The Carp hone Warehouse Specifically, Best Buy Inc owns a

portion of the company's retail division. Announcement from the company, Best Buy
would also opened branded Best Buy stores by the middle of 2009, with goals for up
to 200 stores to be opened throughout the United Kingdom in the short time after.
The company is said to be in talks to acquire Kesa Electricals and DSG International,
both of which are United Kingdom rival retail electronics outlets. In March of 2009,
the company became the online and brick and mortar primary provider for the
eastern United States. This happened because their chief rival company, Circuit City
closed its doors. In the west coast states, Best Buy's main competition is a chain of
Fry's Electronics.

Wal-mart Stores, lnc

History and Background.

   The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In
1970, it opened its home office and first distribution center in Bentonville, Arkansas.
It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began
trading stock as a publicly held company on October 1, 1970, and was soon listed on
the New York Stock Exchange. The first stock split occurred in May 1971 at a market
price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas,
Louisiana, Missouri, and Oklahoma; it entered Tennessee in 1973 and Kentucky and
Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with
7,500 employees and total sales of $340.3 million. Wal-Mart opened its first Texas
store in Mount Pleasant on November 11, 1975.

In the 1980s, Wal-Mart continued to grow rapidly, and by its 25th anniversary in 1987
there were 1,198 stores with sales of $15.9 billion and 200,000 associates. This year
also marked the completion of the company's satellite network, a $24 million
investment linking all operating units of the company with its Bentonville office via
two-way voice and data transmission and one-way video communication. At the
time, it was the largest private satellite network, allowing the corporate office to track
inventory and sales and to instantly communicate to stores. In 1988, Sam Walton
stepped down as CEO and was replaced by David Glass. Walton remained as
Chairman of the Board, and the company also rearranged other people in senior
positions.Inside a Wal-Mart Supercenter in West Plains, Missouri In 1988, the
first Wal-Mart Supercenter opened in Washington, Missouri. Thanks to its
superstores, it surpassed Toys "R" Us in toy sales in the late 1990s. The company

also opened overseas stores, entering South America in 1995 with stores in
Argentina and Brazil; and Europe in 1999, buying Ads in the UK for $10 billion. In
1998, Wal-Mart introduced the "Neighborhood Market" concept with three stores
in Arkansas. By 2005, estimates indicate that the company controlled about 20% of
the retail grocery and consumables business. In 2000, H. Lee Scott became
President and CEO, and Wal-Mart‘s sales increased to $165 billion. In 2002, it was
listed for the first time as America's largest corporation on the Fortune 500 list, with
revenues of $219.8 billion and profits of $6.7 billion. It has remained there every
year, except for 2006. In 2005, Wal-Mart had $312.4 billion in sales, more than 6,200
facilities around the world—including 3,800 stores in the United States and 2,800
elsewhere, employing more than 1.6 million "associates" worldwide. Its U.S.
presence grew so rapidly that only small pockets of the country remained further
than 60 miles (100 km) from the nearest Wal-Mart.

BEST BUY Co. lnc

Current Status

Best Buy status is currently active. Their stores are operated all over in the United
States of America.

Wal-mart Stores, lnc

Current Status

 Branded as Wal-mart since 2008 and Wal-mart before than, is an
American public multinational corporation that runs chains of large discount
department stores and warehouse stores. The company is the world's 18th largest
public corporation, according to the Forbes Global 2000 list, and the largest public
corporation when ranked by revenue. It is also the biggest private employer in the
world with over 2 million employees. The company is the world's number one
retailer, the number one retailer in the US, and the number one retailer in various
countries. It was recently ranked number one in sales in Fortune Magazine.

BEST BUY Co. lnc

Profile of Competitors

Best Buy competes nationally against consumer electronics chains such as
RadioShack; mass merchants such as Wal-Mart, Target and Sears; home office
retailers such as Office Depot, Office Max and Staples. We face competition through
the direct and online channel from Dell, Amazon and eBay, among others. they also
compete against independent dealers, regional chain discount stores, wholesale
clubs, mail-order and Internet retailers, video rental stores and other specialty retail

Wal-mart Stores, lnc

Profile of Competitors

In North America, Wal-Mart's primary competition includes department
stores like Kmart, Target, ShopKo and Meijer, Canada's Zellers, Hart the Real
Canadian Superstore and Giant Tiger, and Mexico's Commercial
Mexicana and Soriano. Competitors of Wal-Mart's Sam's Club division are Costco,
and the smaller BJ's Wholesale Club chain operating mainly in the eastern US. Wal-
Mart's move into the grocery business in the late 1990s also set it against major
supermarket chains in both the United States and Canada. Several smaller retailers,
primarily dollar stores, such as Family Dollar and Dollar General, have been able to
find a small niche market and compete successfully against Wal-Mart for home
consumer sales. In 2004, Wal-Mart responded by testing its own dollar store
concept, a subsection of some stores called "Pennies-n-Cents." Wal-Mart also had
to face fierce competition in some foreign markets. For example, in Germany it had
captured just 2% of German food market following its entry into the market in 1997
and remained "a secondary player" behind Alde with a 19% share. In July 2006,
Wal-Mart announced its withdrawal from Germany. Its stores were sold to German
company Metro. Wal-Mart continues to do well in the UK, and its Ads subsidiary is
the second largest chain after Tesco.

Wal-Mart struggled to export its brand elsewhere as it rigidly tried to reproduce its
model overseas. In China, Wal-Mart hopes to succeed by adapting and doing things
preferable to Chinese citizens. For example, it found that Chinese consumers

preferred to select their own live fish and seafood; stores began displaying the meat
uncovered and installed fish tanks, leading to higher sales

BEST BUY Co. lnc

Failure/Success Factors

Success factors of Best buy

Senior management, executive management, or management team is generally a
team of individuals at the highest level of organizational management who have the
day-to-day responsibilities of managing a company or corporation; they hold specific
executive powers conferred onto them with and by authority of the board of directors
and/or the shareholders. There are most often higher levels of responsibility, such as
a board of directors and those who own the company (shareholders), but they focus
on managing the senior or executive management instead of the day-to-day
activities of the business. In Project Management, senior management is responsible
for authorizing the funding of projects.

Global Reach is a business initiative to increase the access between a company and
their current and potential customers through the use of the Internet. The Internet
allows the company to market themselves and attract new customers to their website
where they can provide product information and better customer service. Customers
can place orders electronically, therefore reducing expensive long distant phone
calls and postage costs of placing orders, while saving time on behalf of the
customer and company. A company striving to obtain Global Reach should provide
a code of ethics, a company purchasing policy, additional contact information,
adequate product information and price. The website itself should be multi-lingual,
easy-to-use, and have the ability to secure customer information.

A business model describes the rationale of how an organization creates, delivers,
and captures value- economic, social, or other forms of value. The process of
business model design is part of business strategy. In theory and practice the term
business model is used for a broad range of informal and formal descriptions to
represent core aspects of a business, including purpose, offerings, strategies,
infrastructure, organizational structures, trading practices, and operational processes

and policies. Hence, it gives a complete picture of an organization from high-level
perspective. Whenever a business is established, it either explicitly or implicitly
employs a particular business model that describes the design or architecture of the
value creation, delivery, and capture mechanisms employed by the business
enterprise. The essence of a business model is that it defines the manner by which
the business enterprise delivers value to customers, entices customers to pay for
value, and converts those payments to profit: it thus reflects management‘s
hypothesis about what customers want, how they want it, and how an enterprise can
organize to best meet those needs, get paid for doing so, and make a profit.
Business models are used to describe and classify business, but they are also used
by managers inside companies to explore possibilities for future development.
Finally, well known business models operate as recipes for creative managers.

Failure factors of best buy

Many first time sellers have one thing in common they fail. Many of them fail time
and time again, never understanding what is going wrong. They do hours of research
looking for the perfect item to sell, get the auction set up, and wait for the bidding to
begin. Finally the auction ends, and it turns out to be a total failure. Considering the
huge number of sellers who run best buy auctions, there are specific things you must
do, and specific things you must not do if you are to be successful. There are many
reasons why auctions fail. The most common reason is that the item is not in high
demand. This problem can be avoided by doing the necessary research to determine
which items sell well, and which items should be avoided. This research takes a
great deal of time – but in the end, you will find that it is time well spent. Another
reason for best buy failure is pricing. No matter what your reserve price is, your
opening bid price should never be more than $50 or so. This is how you will attract
potential bidders to your auction. If you set that opening bid too high, most people
won‘t even click the link to read the description for your item. Another pricing
problem                 is               lack                of               research.
Before you set your reserve price, you must determine what the item is really worth,
and the price similar items have sold for in past eBay auctions. Poorly written
descriptions are another cause of failed auctions. Poor grammar and misspelled
words drive people away. Failing to post a picture of the item will also keep people
from visiting your auction page. Make sure that your description is well written. This

is essentially your ‗sales copy.‘ Shipping prices scare people away from auctions if
they are too high. Find the lowest shipping prices that you can find, and consider
paying for the shipping yourself if it won‘t cut into your profits too much. Do not
charge handling fees. Offer great ‗customer service‘ for all of your auctions, and ask
your buyers to give you feedback. If the items that you sell are everything that you
said they would be, and you offer great customer service, you can expect wonderful
feedback – and this feedback will help a great deal in your future auctions.

Wal-mart Stores, lnc

Failure/Success Factors

Kenneth Stone, Professor of Economics at Iowa State University, in a paper
published in Farm Foundation in 1997, found that some small towns can lose almost
half of their retail trade within ten years of a Wal-Mart store opening. However, he
compared the changes to previous competitors small town shops have faced in the
past—from the development of the railroads and the Sears Roebuck catalog to
shopping malls. He concludes that shop owners who adapt to the ever changing
retail market can thrive after Wal-Mart comes to their community. A subsequent
study in collaboration with Mississippi State University indicated that there are "both
positive and negative impacts on existing stores in the area where the new
supercenter locates."

A June 2006 article published by the libertarian Ludwig von Mises
Institute suggested that Wal-Mart has a positive impact on small business. It argued
that while Wal-Mart's low prices caused some existing businesses to close, the chain
also created new opportunities for other small business, and so "the process
of creative destruction unleashed by Wal-Mart has no statistically significant impact
on the overall size of the small business sector in the United States."

A Loyola University Chicago study which suggested that impact a Wal-Mart store
has on a local business is correlated to its distance from that store. The leader of
that study admits that this factor is stronger in smaller towns and doesn't apply to
more urban areas saying "It'd be so tough to nail down what's up with Wal-
Mart". Another study found Wal-Mart's entry into a new market has a profound
impact on its retail competition. When a Wal-Mart opens in a new market, median
sales drop 40% at similar high-volume stores, 17% at supermarkets and 6%

at drugstores, according to a June 2009 study by researchers at several universities
and led by the Tuck School of Business at Dartmouth College.

For the concern of jobs, a study commissioned by Wal-Mart with consulting
firm Global Insight, found that its stores' presence saves working families more than
US$2,500 per year, while creating more than 210,000 jobs in the U.S. Alternately
the Economic Policy Institute estimates that 196,000 jobs were lost between 2001–
2006, and 68% of jobs lost were manufacturing jobs. Another study by Global Insight
has found that Wal-Mart's growth between 1985 and 2004 resulted in food-at-home
prices that were 9.1% lower and overall prices (as measured by the Consumer Price
Index) that were 3.1% lower than they would otherwise have been. Another study at
the University of Missouri found that a new store increases net retail employment in
the county by 100 jobs in the short term, half of which disappear over five years as
other retail establishments close.
Studies of Wal-Mart show consumers benefit from lower costs. A 2005 Washington
Post story reported that "Wal-Mart's discounting on food alone boosts the welfare of
American shoppers by at least $50 billion per year." A study in 2005
at Massachusetts Institute of Technology measured the effect on consumer
welfare and found that the poorest segment of the population benefits the most from
the existence of discount retailers. A 2004 paper by two professors at Pennsylvania
State University found that U.S. counties with Wal-Mart stores suffered increased
poverty compared with counties without Wal-Marts. They hypothesized, to explain
their results: This could be due to the displacement of workers from higher-paid jobs
in the retailers customers no longer choose to patronize, Wal-Mart providing less
local charity than the replaced businesses, or a shrinking pool of local leadership and
reduced social capital due to a reduced number of local independent
businesses. Dr Raj Patel, author of Stuffed and Starved : Markets, Power and the
Hidden Battle for the World Food System, said in a lecture at the University of
Melbourne on 18 September 2007, that a study in Nebraska looked at two different
Wal-Marts, the first of which had just arrived and "was in the process of driving
everyone else out of business but, to do that, they cut their prices to the bone, very,
very low prices". In the other Wal-Mart, "they had successfully destroyed the local
economy, there was a sort of economic crater with Wal-Mart in the middle; and, in
that community, the prices were 17 per cent higher".

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BEST BUY Co. lnc

Strategies Employed

Electronics giant Best Buy launched a customer-centric program based on
segmentation that now is at the heart of its company-wide growth strategy. The Best
Buy‘s strategic position is unique. It has more than 1,000 stores and sells a wide
range of competing products. Best Buy has 155,000 people working in its stores, and
its 20,000-strong Geek Squad is in the field every day, helping customers set up
home electronics or fixing products on the fritz. Through its Reward Zone program, a
sort of frequent flier card for shoppers, the retailer has built up a list of more than 2.5
million customers who shell out thousands of dollars every year for the latest tech
gear. Best Buy says that its biggest not-so-secret weapon is the staff of 155,000
employees worldwide who can talk all things electronic. But the retailer is
increasingly using social media Web sites such as twitter and facebook to bringing
young, technologically savvy customers into its stores. More than 2,300 Best Buy
staffers now provide customer service through Twitter. Best buy, a consumer
electronics retailer based in Minnesota, has installed an integrated business
intelligence system called micro-strategy web that provides internal an integrated
business performance. The past four years employees at best buy have taken
regular tours of what the company called its retail hospital. But this fall, best buy
staffers made their last their trip to the darkened room on the company‘s Richifield
campus. The suit claimed that best buy employees had misrepresented the
manufacture in order to sell the chain product service. Several consumers were
outraged by the sales tactics used by best buy employees to sell their performance
service plans. Pricing controversies into best buy use of an in store website alleged
to have misled customers on item sales price. They provides consumers with a large
selection of products aimed at a wide variety of customers. Best buy want to give
customers opportunity to choose what is appropriate and make sales staff available
to answer questions to help customer make decisions.

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Wal-mart Stores, lnc

Strategies Employed

 Wal-Mart‗s business strategy is Overall Cost Leadership, offering their customers
great quality service and products at a lower price than their competition. Overall
Cost Leadership is defined as offering the same or better quality product or service
at a price that is less than what any of the competition is able to do. In achieving this
goal it relies on a Supply Chain Management, that ensures products are available to
the customers when they it. The items offered are broken down into products and
services, products would be privately labeled brands such as, ―George, Metro 7,
Mainstays and other licensed brands from Disney and Mary-Kate and Ashley‖.
Services would be that they offer home goods, beauty supplies and seasonal
items.The five forces are buyer power, supplier power, threat of substitute products
and services, threat of new entrants, and rivalry among existing competitors. Wal-
mart follows the five forces business strategy.

Buyer Power is affected by how big your customers are and how much revenue
they constitute as well as other things. For instance Wal-Mart has a lot of power with
suppliers because it buys so much of their inventory and is thus a large percent of
those companies revenues. It is no surprise then that these companies have lived
and died with Wal-Mart's orders and would do anything to protect their business with
them. Buyer power has about 55% of the five forces model that Wal-Mart uses, since
the Company‘s sole purpose is to ensure that its customers are, ―Saving Money,
Living Better‖. Buyer power would also include their employees, in treating them with
the respect, giving them support and having an open door policy, you create happy
employees which transfers to happy custome

Supplier power as there is a high amount of choices to be taken in and they do
bring in a lot a supplies. As for a threat of a substitute product, it is high because
there are alternative products for sale that can replace another item. As for a threat
of a new entrant, Walmart seems to be the Leader in low cost sales so it will not be
easy for a new business to come in and challenge Walmarts' ways. Supplier Power
estimated percentage would be about 35, while, this percentage appears to be low,
in the grand scheme of things is allows Wal-Mart to ensure that their suppliers come
from a diverse group that achieves and maintains their high standards of delivering
great quality services and products.

For Walmart, the major business initiative being used is Supply Chain Management.
A supply chain management system is an IT system that supports activities by
automating the tracking of inventory and information among business processes and
across companies. Wal-Mart is to ensure that all their suppliers are using Electronic
Product Codes and for those who do not have the capability they work with them to
find packages that are within their price range. This allows for a successful ensuring
that customers get what they order in a timely manner. It allows for logistics,

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fulfillment, production, revenue and profit, cost and price efficiency, Another initiative
is the, Go Green Concept, according to Wal-Mart‘s press release as of February 2nd
2009, ―two new types of heavy-duty commercial hybrid trucks and two different
alternatively fueled heavy duty trucks‖, has become, ―part of the company‘s efforts to
build on its progress in developing a more sustainable trucking fleet‖. As an Overall
Cost Leadership company, their strategy is that of a bottom-line company. A bottom-
line strategy optimizes manufacturing processes, decrease transportation costs, and
reduces cost of human capital, and minimizes errors in a process.

BEST BUY Co. lnc

Recommendations for Enhancements


Best buy is allocated in many than 1,150 stores in the United States, Puerto Rico,
Canada, China, Mexico, and Turkey. In addition, the company has rolled out over
100 Best Buy Express Automated Retail stores or "Zoom Shops", operated by Zoom
Systems     in airports and malls around the U.S. The company's corporate
headquarters are located in Richfield, Minnesota. But in further enhancement the
company would do well to broaden its market supply of electronics focusing on
developing countries in Africa like Kenya, Uganda and Tanzania, which at this
moment are in a high demand for electronic devices and also mid-eastern countries
rather the focusing on American based countries not only only will push then to a
high global status but it will also help push up sales and income.


Best buy was named the company of the year by Forbes in 2004‘ due its only
business advertisement methods and making themselves know to the general public.
And also due to them having a very complex system that is highly user friendly
where as not only can the consumer buy but they may also pawn of their electrical
devices to best buy and the company may reach a certain price agreement with the
consumer and later on resell that electrical product to another consumer at a slightly
profited price, giving them a higher ground of interchanging places with the
consumers. Thus bring about more trust between them and the consumers. But also
more can be done because around 2008-09 during the economic crisis in America

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the company sufured a lethal economic blow as the consumer rate dropped from
66% to 34% which was influenced by High increase in competition from our
company such as eBay that not only sells electronic devices but all sorts on goods
and services on a online basis and also through allocated stores where consumers
can pawn their goods or directly buy goods rather than only purchase, So if Best buy
is to highly promote itself and avoid such a situation again in future they would do
well increasing their online basis criteria instead of focusing more on direct allocating
themselves, allowing them to save up on capital and also consumer accessibility as
buyers with the intention of saving up time would be able to purchase or even pawn
online rather than driving to the main retail store. Keeping up with the daily change in
the technological environment would also great play to their advantage.


Best Buy Company mainly specializes with the retailing of electronic devices
throughout the United States of America. They are responsible for the supply of
electronically based equipment of over 16% of America‘s electronic equipment but
this is all possible due to the proper selection of a product due to America being a
first world class the demand for equipment such as lap tops and cell phones is on a
high rate compared to that of a under developed country where as even internet
services are not easily accessible so the number of laptops sold would be on a
relative low but selecting a well developed country such as the United States of
America and selecting a proper product that would blend in well with the class of the
country. And for the proper way at which Best Buy would do well to also instate
themselves in other products instead of focusing mostly on electronic devise such as
EBay whereas including other types of product would highly increase their pool of
consumers and also the rates of profit and income.


Best Buy has slightly higher than EBay who are their great competitors but their
consumer rates are higher than those of EBay being that EBay suffered a great
criticism remark as most of the consumer would complains that the good that they
were purchasing from there were not as they would seem compared to the display
photos shown some even went about to talk on the long delays on delivery of

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products and some never got their products at all being that the accounts are fake or
not real which in turn this resulted to the advantage of Best Buy becoming the
highly demanded electric retail site but if Best Buy were to lower their prices and with
the same retailer satisfaction rate they would truly eliminate the competition but
making more profits and also income rate at the same time build a good buyer and
seller relationship.

Wal-mart Stores, lnc

Recommendations for Enhancements
Wal-Mart should attempt to grow its Sam‘s Club base as quickly as possible. The
company will face many competitors, such as Price Club and Costco, who will pose
a potential threat to its future. The best way to deter that threat is to obtain the first-
mover advantage by build as many locations as possible in the shortest period of
time. Since the warehouse club is an emergent industry, Wal-Mart should obtain a
strategic valuable asset, such as location if it follows this cost-advantage strategy.
At first, Wal-Mart should avoid large metropolitan locations. It should concentrate on
locating clubs in markets whose population is between 100,000 and 200,000 people
(example Cedar Rapids, IA, approx 176,000, Sioux City, SD, approx 190,000,
Topeka, KS, approx 165,000). This is much less than the markets sought by Price
Club and other competitors, which look for populations of 250,000 to 350,000
people. Locating the clubs in the areas with small population or rural areas has its
cost advantages. The real estate costs in these smaller markets is less than in
metropolitan markets. This factor will enable Sam‘s Club to expand more quickly.
This is the same strategy that brought Wal-Mart into the leadership role in
the discount supermarket business. To complete the successful expansion Sam‘s
Club should obtain Wal-Mart‘s technological leadership in the
areas of logistics and inventory management. Instead of buying merchandise
independently from Wal-Mart, Sam‘s Club should integrate its purchasing with Wal-
Mart and use Wal-Mart‘s hub-and-spoke logistic systems for its advantages.
In conclusion, Wal-Mart would further gain cost leadership advantage placing its
Sam‘s Club warehouses in rural areas, which are not yet discovered as a mean of

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cost leadership by their competitors. Therefore Wal-Mart will have first-mover
advantage in those locations the value of which has not been realized yet.




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Introduction                       Page 1
Profile of Company                 Page 2-3

History and Background             Page 3-5
Current Status                     Page 5
Profile of competitors             Page 6-7
Failure/success Factors            Page 7-10
Strategies employed                Page 11-13
Recommendations for enhancements   Page 13-16
References                         Page 16

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