Best Buy, Co., Inc. (A): An Innovator's Journey SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Best Buy, Co., Inc. (A): An Innovator's Journey
The CEO of Best Buy, a hugely successful retailing company, has hired consulting firm Strategos to imbue the company with an improved innovative capability. The six-month program of experimental learning yields new business ideas and also trains Best Buy employees as innovation coaches. However, this kind of learning is expensive and time consuming. The case details the learning journey as experienced by Best Buy employees and raises the question of when such development programs are appropriate. Focuses on the learning process and stimulates debate about how people and organizations learn in general, as well as how an innovation capability can be fostered.
Swot Analysis of "Best Buy, Co., Inc. (A): An Innovator's Journey" written by Dorothy Leonard, Brian J. Delacey includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Buy Learning facing as an external strategic factors. Some of the topics covered in Best Buy, Co., Inc. (A): An Innovator's Journey case study are - Strategic Management Strategies, Developing employees, Innovation, Knowledge management, Strategy execution and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Best Buy, Co., Inc. (A): An Innovator's Journey casestudy better are - – there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Best Buy, Co., Inc. (A): An Innovator's Journey
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Best Buy, Co., Inc. (A): An Innovator's Journey case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Buy Learning, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Buy Learning 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. (A): An Innovator's Journey can be done for the following purposes –
1. Strategic planning using facts provided in Best Buy, Co., Inc. (A): An Innovator's Journey case study
2. Improving business portfolio management of Buy Learning
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Buy Learning
Strengths Best Buy, Co., Inc. (A): An Innovator's Journey | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Buy Learning in Best Buy, Co., Inc. (A): An Innovator's Journey Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Best Buy, Co., Inc. (A): An Innovator's Journey 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.
Successful track record of launching new products
– Buy Learning has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Buy Learning 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.
Strong track record of project management
– Buy Learning is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Buy Learning 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.
Low bargaining power of suppliers
– Suppliers of Buy Learning in the sector have low bargaining power. Best Buy, Co., Inc. (A): An Innovator's Journey has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Buy Learning to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Buy Learning 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 Dorothy Leonard, Brian J. Delacey 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.
Cross disciplinary teams
– Horizontal connected teams at the Buy Learning 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Best Buy, Co., Inc. (A): An Innovator's Journey firm has clearly differentiated products in the market place. This has enabled Buy Learning to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Buy Learning to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Buy Learning in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Buy Learning 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. (A): An Innovator's Journey 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.
Ability to lead change in Innovation & Entrepreneurship field
– Buy Learning 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 Learning in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Buy Learning has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Buy Learning to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Best Buy, Co., Inc. (A): An Innovator's Journey | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Best Buy, Co., Inc. (A): An Innovator's Journey are -
Lack of clear differentiation of Buy Learning products
– To increase the profitability and margins on the products, Buy Learning needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Buy Learning 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 Learning 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.
Products dominated business model
– Even though Buy Learning 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. (A): An Innovator's Journey should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Dorothy Leonard, Brian J. Delacey suggests that, Buy Learning 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.
Skills based hiring
– The stress on hiring functional specialists at Buy Learning 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.
Slow to strategic competitive environment developments
– As Best Buy, Co., Inc. (A): An Innovator's Journey HBR case study mentions - Buy Learning 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 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 Learning supply chain. Even after few cautionary changes mentioned in the HBR case study - Best Buy, Co., Inc. (A): An Innovator's Journey, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Buy Learning vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Buy Learning is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Buy Learning needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Buy Learning to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Best Buy, Co., Inc. (A): An Innovator's Journey, is just above the industry average. Buy Learning 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Best Buy, Co., Inc. (A): An Innovator's Journey, in the dynamic environment Buy Learning has struggled to respond to the nimble upstart competition. Buy Learning has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Buy Learning 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.
Opportunities Best Buy, Co., Inc. (A): An Innovator's Journey | 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. (A): An Innovator's Journey are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Buy Learning 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 Learning to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Buy Learning has opened avenues for new revenue streams for the organization in the industry. This can help Buy Learning to build a more holistic ecosystem as suggested in the Best Buy, Co., Inc. (A): An Innovator's Journey case study. Buy Learning can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Buy Learning can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Buy Learning in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Buy Learning is facing challenges because of the dominance of functional experts in the organization. Best Buy, Co., Inc. (A): An Innovator's Journey case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Buy Learning can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Best Buy, Co., Inc. (A): An Innovator's Journey 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.
Using analytics as competitive advantage
– Buy Learning 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, Co., Inc. (A): An Innovator's Journey - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Buy Learning to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Buy Learning to increase its market reach. Buy Learning 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.
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 Learning in the consumer business. Now Buy Learning can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Buy Learning 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Buy Learning can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Best Buy, Co., Inc. (A): An Innovator's Journey, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Buy Learning can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Developing new processes and practices
– Buy Learning can develop new processes and procedures in Innovation & Entrepreneurship 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.
Threats Best Buy, Co., Inc. (A): An Innovator's Journey 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. (A): An Innovator's Journey are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. (A): An Innovator's Journey, Buy Learning may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Stagnating economy with rate increase
– Buy Learning 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.
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 Learning needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Consumer confidence and its impact on Buy Learning 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.
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 Buy Learning in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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 Learning 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.
Environmental challenges
– Buy Learning 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 Learning can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Regulatory challenges
– Buy Learning 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 Innovation & Entrepreneurship industry regulations.
High dependence on third party suppliers
– Buy Learning 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.
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 Learning business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Buy Learning
– 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 Learning.
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 Learning.
Weighted SWOT Analysis of Best Buy, Co., Inc. (A): An Innovator's Journey 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. (A): An Innovator's Journey 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. (A): An Innovator's Journey 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. (A): An Innovator's Journey 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. (A): An Innovator's Journey 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 Learning needs to make to build a sustainable competitive advantage.
