CASE STUDY Best Buy Gets Better uuse ec Too Big, Too Fast yped In 1996 Best Buy

Question

CASE STUDY Best Buy Gets Better uuse ec Too Big, Too Fast yped In 1996 Best Buy found itself in a predicament Despite astounding growth over a three-year period, the company had not changed the way it did business. As a result, its stock tumbled and profits dwindled. The company switched gears opting for a smaller array of products, a new pric ing strategy, and new store layouts. Customer Focus In addition, Best Buy turned to a business model called Customer Insight that determined the life- styles of its most profitable customers. The five segments Best Buy identified include wealthy pro- fessionals desiring the best technology products young males seeking the latest technology and accessories, fathers looking for technology to improve entertainment, mothers on the lookout for gadgets to enrich their children, and small business owners who use technology to increase their profits. Best Buy began targeting these groups, increasing revenues from $7.8 million in Geek Squad Best Buy still faced strong competition from other technology retailers. Enter, the Geek Squad. This army of 2,500 "agents" provides emergency services 24 hours a day, seven days a week, 525,600 minutes a year to fix computers, printers, and net- works for individual customers and businesses alike. The ability to provide full technology ser vice and support for the products sold in stores helped Best Buy win back customers and 1997 to more than $40 million in 2008 BEST BUY REVENUES, 1997-2008 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 shareholders Analyzing the Impact 1. Summarizing What is Customer Insight, and how did it help change the way Best Buy does business? 0 5 10 15 20 25 30 35 $40 Millions of Dollars 2. Drawing Conclusions How did Best Buy differentiate itself from other technology retailers? urce: Best Buy annual reports

Explanation / Answer

CASE STUDY Best Buy Gets Better uuse ec Too Big, Too Fast yped In 1996 Best Buy found itself in a predicament Despite astounding growth over a three-year period, the company had not changed the way it did business. As a result, its stock tumbled and profits dwindled. The company switched gears opting for a smaller array of products, a new pric ing strategy, and new store layouts. Customer Focus In addition, Best Buy turned to a business model called Customer Insight that determined the life- styles of its most profitable customers. The five segments Best Buy identified include wealthy pro- fessionals desiring the best technology products young males seeking the latest technology and accessories, fathers looking for technology to improve entertainment, mothers on the lookout for gadgets to enrich their children, and small business owners who use technology to increase their profits. Best Buy began targeting these groups, increasing revenues from $7.8 million in Geek Squad Best Buy still faced strong competition from other technology retailers. Enter, the Geek Squad. This army of 2,500 "agents" provides emergency services 24 hours a day, seven days a week, 525,600 minutes a year to fix computers, printers, and net- works for individual customers and businesses alike. The ability to provide full technology ser vice and support for the products sold in stores helped Best Buy win back customers and 1997 to more than $40 million in 2008 BEST BUY REVENUES, 1997-2008 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 shareholders Analyzing the Impact 1. Summarizing What is Customer Insight, and how did it help change the way Best Buy does business? 0 5 10 15 20 25 30 35 $40 Millions of Dollars 2. Drawing Conclusions How did Best Buy differentiate itself from other technology retailers? urce: Best Buy annual reports

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.