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Best Buy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Best Buy


Documents the evolution of Best Buy, an electronics retailer, from its founding in 1966 to its very successful "Concept 2" strategy in 1996, boosting its sales ($7.2 billion) past industry #1 Circuit City. Its CEO Richard Schulze offers a new vision (Concept 3) to address the company's changed competitive and consumer environment. Reduced profitability in 1996, however, calls for creative adaptation of Concept 3.

Authors :: V. Kasturi Rangan, Baleji S. Chakravarthy

Topics :: Sales & Marketing

Tags :: Competition, Customers, Sales, Social enterprise, Supply chain, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Best Buy" written by V. Kasturi Rangan, Baleji S. Chakravarthy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Concept 7.2 facing as an external strategic factors. Some of the topics covered in Best Buy case study are - Strategic Management Strategies, Competition, Customers, Sales, Social enterprise, Supply chain and Sales & Marketing.


Some of the macro environment factors that can be used to understand the Best Buy casestudy better are - – technology disruption, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, etc



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Introduction to SWOT Analysis of Best Buy


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Best Buy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Concept 7.2, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Concept 7.2 operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.




SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix


SWOT analysis of Best Buy can be done for the following purposes –
1. Strategic planning using facts provided in Best Buy case study
2. Improving business portfolio management of Concept 7.2
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Concept 7.2




Strengths Best Buy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Concept 7.2 in Best Buy Harvard Business Review case study are -

Operational resilience

– The operational resilience strategy in the Best Buy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Ability to lead change in Sales & Marketing field

– Concept 7.2 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Concept 7.2 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Diverse revenue streams

– Concept 7.2 is present in almost all the verticals within the industry. This has provided firm in Best Buy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Organizational Resilience of Concept 7.2

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Concept 7.2 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

– The customer experience strategy of Concept 7.2 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Digital Transformation in Sales & Marketing segment

- digital transformation varies from industry to industry. For Concept 7.2 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Concept 7.2 has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Effective Research and Development (R&D)

– Concept 7.2 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Best Buy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Highly skilled collaborators

– Concept 7.2 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Best Buy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Sustainable margins compare to other players in Sales & Marketing industry

– Best Buy firm has clearly differentiated products in the market place. This has enabled Concept 7.2 to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Concept 7.2 to invest into research and development (R&D) and innovation.

Analytics focus

– Concept 7.2 is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by V. Kasturi Rangan, Baleji S. Chakravarthy can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Learning organization

- Concept 7.2 is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Concept 7.2 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Best Buy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Strong track record of project management

– Concept 7.2 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.






Weaknesses Best Buy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Best Buy are -

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Best Buy, it seems that the employees of Concept 7.2 don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

High cash cycle compare to competitors

Concept 7.2 has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Concept 7.2 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Best Buy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Best Buy, in the dynamic environment Concept 7.2 has struggled to respond to the nimble upstart competition. Concept 7.2 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Products dominated business model

– Even though Concept 7.2 has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Best Buy should strive to include more intangible value offerings along with its core products and services.

Interest costs

– Compare to the competition, Concept 7.2 has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Slow to strategic competitive environment developments

– As Best Buy HBR case study mentions - Concept 7.2 takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

High bargaining power of channel partners

– Because of the regulatory requirements, V. Kasturi Rangan, Baleji S. Chakravarthy suggests that, Concept 7.2 is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

Aligning sales with marketing

– It come across in the case study Best Buy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Best Buy can leverage the sales team experience to cultivate customer relationships as Concept 7.2 is planning to shift buying processes online.

Lack of clear differentiation of Concept 7.2 products

– To increase the profitability and margins on the products, Concept 7.2 needs to provide more differentiated products than what it is currently offering in the marketplace.

Low market penetration in new markets

– Outside its home market of Concept 7.2, firm in the HBR case study Best Buy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.




Opportunities Best Buy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities highlighted in the Harvard Business Review case study Best Buy are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Concept 7.2 can use these opportunities to build new business models that can help the communities that Concept 7.2 operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.

Buying journey improvements

– Concept 7.2 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Best Buy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Concept 7.2 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Building a culture of innovation

– managers at Concept 7.2 can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Concept 7.2 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Leveraging digital technologies

– Concept 7.2 can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Better consumer reach

– The expansion of the 5G network will help Concept 7.2 to increase its market reach. Concept 7.2 will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Low interest rates

– Even though inflation is raising its head in most developed economies, Concept 7.2 can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Creating value in data economy

– The success of analytics program of Concept 7.2 has opened avenues for new revenue streams for the organization in the industry. This can help Concept 7.2 to build a more holistic ecosystem as suggested in the Best Buy case study. Concept 7.2 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for Concept 7.2 to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Using analytics as competitive advantage

– Concept 7.2 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Best Buy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Concept 7.2 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Concept 7.2 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Concept 7.2 can explore opportunities that can attract volunteers and are consistent with its mission and vision.




Threats Best Buy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Best Buy are -

Technology acceleration in Forth Industrial Revolution

– Concept 7.2 has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Concept 7.2 needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Stagnating economy with rate increase

– Concept 7.2 can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Concept 7.2 in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Consumer confidence and its impact on Concept 7.2 demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

High dependence on third party suppliers

– Concept 7.2 high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Concept 7.2 can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Best Buy .

Environmental challenges

– Concept 7.2 needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Concept 7.2 can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Concept 7.2 in the Sales & Marketing sector and impact the bottomline of the organization.

Increasing wage structure of Concept 7.2

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Concept 7.2.

Regulatory challenges

– Concept 7.2 needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Concept 7.2 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Easy access to finance

– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Concept 7.2 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Concept 7.2 will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.




Weighted SWOT Analysis of Best Buy Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Best Buy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Best Buy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Best Buy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Best Buy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Concept 7.2 needs to make to build a sustainable competitive advantage.



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