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Best Buy Co., Inc.: Customer-Centricity SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Best Buy Co., Inc.: Customer-Centricity


With FY2005 sales of $27.3 billion, Richfield, Minn.-based Best Buy Co., Inc. was the leading retailer of consumer electronics, home-office products, and related services in North America. Its operations included the distinct store formats Best Buy, Future Shop in Canada, and Magnolia Audio Video as well as service provider Geek Squad. For the eight years leading up to 2004, Best Buy had reported double-digit revenue growth every year and rarely missed earnings. But on December 13, 2005, Best Buy missed its third-quarter earnings per share (coming in at $0.28, not $0.30). The company's stock price fell nearly 12% that day, a loss of $2 billion in market cap. The poor results were attributed to the aggressive rollout of 144 new "centricity" stores--revamped retail formats featuring a customer-centric operating model designed to offer targeted "value propositions" to one or two distinct customer segments. The new format was a departure from Best Buy's winning formula and required adjustments in interactions between various parts of the Best Buy organization, including a new set of segment leaders.

Authors :: Rajiv Lal, Irina Tarsis, Carin-Isabel Knoop

Topics :: Sales & Marketing

Tags :: Customers, Financial management, Leadership, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Best Buy Co., Inc.: Customer-Centricity" written by Rajiv Lal, Irina Tarsis, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Buy Centricity facing as an external strategic factors. Some of the topics covered in Best Buy Co., Inc.: Customer-Centricity case study are - Strategic Management Strategies, Customers, Financial management, Leadership and Sales & Marketing.


Some of the macro environment factors that can be used to understand the Best Buy Co., Inc.: Customer-Centricity casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing transportation and logistics costs, increasing commodity prices, etc



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Introduction to SWOT Analysis of Best Buy Co., Inc.: Customer-Centricity


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Best Buy Co., Inc.: Customer-Centricity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Buy Centricity, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Buy Centricity 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 Co., Inc.: Customer-Centricity can be done for the following purposes –
1. Strategic planning using facts provided in Best Buy Co., Inc.: Customer-Centricity case study
2. Improving business portfolio management of Buy Centricity
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 Buy Centricity




Strengths Best Buy Co., Inc.: Customer-Centricity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Buy Centricity in Best Buy Co., Inc.: Customer-Centricity Harvard Business Review case study are -

Digital Transformation in Sales & Marketing segment

- digital transformation varies from industry to industry. For Buy Centricity digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Buy Centricity 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.

Training and development

– Buy Centricity has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Best Buy Co., Inc.: Customer-Centricity Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

High switching costs

– The high switching costs that Buy Centricity has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Strong track record of project management

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

Analytics focus

– Buy Centricity 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 Rajiv Lal, Irina Tarsis, Carin-Isabel Knoop 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.

Highly skilled collaborators

– Buy Centricity 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 Co., Inc.: Customer-Centricity HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to lead change in Sales & Marketing field

– Buy Centricity 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 Buy Centricity in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Buy Centricity has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Buy Centricity has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Diverse revenue streams

– Buy Centricity is present in almost all the verticals within the industry. This has provided firm in Best Buy Co., Inc.: Customer-Centricity 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.

Effective Research and Development (R&D)

– Buy Centricity 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 Co., Inc.: Customer-Centricity - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High brand equity

– Buy Centricity has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Buy Centricity to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Low bargaining power of suppliers

– Suppliers of Buy Centricity in the sector have low bargaining power. Best Buy Co., Inc.: Customer-Centricity has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Buy Centricity to manage not only supply disruptions but also source products at highly competitive prices.






Weaknesses Best Buy Co., Inc.: Customer-Centricity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Best Buy Co., Inc.: Customer-Centricity are -

Skills based hiring

– The stress on hiring functional specialists at Buy Centricity has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Best Buy Co., Inc.: Customer-Centricity, it seems that the employees of Buy Centricity 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.

Ability to respond to the competition

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

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Buy Centricity supply chain. Even after few cautionary changes mentioned in the HBR case study - Best Buy Co., Inc.: Customer-Centricity, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Buy Centricity vulnerable to further global disruptions in South East Asia.

Products dominated business model

– Even though Buy Centricity 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 Co., Inc.: Customer-Centricity should strive to include more intangible value offerings along with its core products and services.

Capital Spending Reduction

– Even during the low interest decade, Buy Centricity has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

Slow to strategic competitive environment developments

– As Best Buy Co., Inc.: Customer-Centricity HBR case study mentions - Buy Centricity 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.

Increasing silos among functional specialists

– The organizational structure of Buy Centricity is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Buy Centricity needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Buy Centricity to focus more on services rather than just following the product oriented approach.

Workers concerns about automation

– As automation is fast increasing in the segment, Buy Centricity needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

No frontier risks strategy

– After analyzing the HBR case study Best Buy Co., Inc.: Customer-Centricity, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

High operating costs

– Compare to the competitors, firm in the HBR case study Best Buy Co., Inc.: Customer-Centricity has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Buy Centricity 's lucrative customers.




Opportunities Best Buy Co., Inc.: Customer-Centricity | 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 Co., Inc.: Customer-Centricity are -

Better consumer reach

– The expansion of the 5G network will help Buy Centricity to increase its market reach. Buy Centricity 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.

Buying journey improvements

– Buy Centricity can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Best Buy Co., Inc.: Customer-Centricity 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.

Creating value in data economy

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

Lowering marketing communication costs

– 5G expansion will open new opportunities for Buy Centricity 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.

Manufacturing automation

– Buy Centricity can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Buy Centricity can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Buy Centricity can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Learning at scale

– Online learning technologies has now opened space for Buy Centricity 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.

Reforming the budgeting process

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

Loyalty marketing

– Buy Centricity has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Buy Centricity to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Buy Centricity to hire the very best people irrespective of their geographical location.

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. Buy Centricity can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– Buy Centricity can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Use of Bitcoin and other crypto currencies for transactions

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Buy Centricity in the consumer business. Now Buy Centricity can target international markets with far fewer capital restrictions requirements than the existing system.




Threats Best Buy Co., Inc.: Customer-Centricity 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 Co., Inc.: Customer-Centricity are -

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. Buy Centricity 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.

Stagnating economy with rate increase

– Buy Centricity 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Best Buy Co., Inc.: Customer-Centricity, Buy Centricity may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .

Environmental challenges

– Buy Centricity 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. Buy Centricity can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.

Technology acceleration in Forth Industrial Revolution

– Buy Centricity has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Buy Centricity 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.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Buy Centricity business can come under increasing regulations regarding data privacy, data security, etc.

Barriers of entry lowering

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

Regulatory challenges

– Buy Centricity 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Buy Centricity 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.

High dependence on third party suppliers

– Buy Centricity 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.

Shortening product life cycle

– it is one of the major threat that Buy Centricity is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Buy Centricity

– 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 Buy Centricity.

Consumer confidence and its impact on Buy Centricity 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.




Weighted SWOT Analysis of Best Buy Co., Inc.: Customer-Centricity 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 Co., Inc.: Customer-Centricity 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 Co., Inc.: Customer-Centricity 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 Co., Inc.: Customer-Centricity 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 Co., Inc.: Customer-Centricity 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 Buy Centricity needs to make to build a sustainable competitive advantage.



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