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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 - – increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing energy 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 -

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.

Innovation driven organization

– Buy Centricity is one of the most innovative firm in sector. Manager in Best Buy Co., Inc.: Customer-Centricity Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Superior customer experience

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

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.

Learning organization

- Buy Centricity 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 Buy Centricity is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Best Buy Co., Inc.: Customer-Centricity Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

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.

Organizational Resilience of Buy Centricity

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

Cross disciplinary teams

– Horizontal connected teams at the Buy Centricity are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

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.

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.

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.

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 -

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.

Slow decision making process

– As mentioned earlier in the report, Buy Centricity has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Buy Centricity even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Aligning sales with marketing

– It come across in the case study Best Buy Co., Inc.: Customer-Centricity 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 Co., Inc.: Customer-Centricity can leverage the sales team experience to cultivate customer relationships as Buy Centricity is planning to shift buying processes online.

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.

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.

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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Best Buy Co., Inc.: Customer-Centricity, is just above the industry average. Buy Centricity needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

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.

Lack of clear differentiation of Buy Centricity products

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




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 -

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.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Buy Centricity to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

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.

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.

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.

Increase in government spending

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

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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Buy Centricity 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.

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.

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.

Building a culture of innovation

– managers at Buy Centricity 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.

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.




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 -

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.

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.

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.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Buy Centricity 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 Co., Inc.: Customer-Centricity .

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.

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 .

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.

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.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Buy Centricity needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.

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.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Buy Centricity.

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.




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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