Best Buy Best Buy failing in an International market. In 2006 the company acquired a majority interest stake in the Chinese retail chain Jiangsu Five Star Appliance Co. , Ltd. , who were China’s fourth largest appliance chain. In January of 2007 the first Best Buy store opened in China and was referred to as the largest Best Buy in existence. In February of 2011 they closed all of their own brand stores in China. In 2010 Best Buy entered into a Joint venture with Carphone Warehouse.
They opened own branded stores in the United Kingdom and other European countries. Initially two stores were opened near Lakeside Shopping Centre nd a retail park near Southampton. Four additional stores opened by the end of 2010 with another five planned for the following year. However, with all the financial problems the company struggled with they had to close all of their European branches by the end of 2011. We will discuss what difficulties were faced by Best Buy while trying to compete in the European and Chinese markets.
Background Best Buy Co. , Inc. , incorporated on 20th October 1996, is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances and related services. The company operates retail stores and call centers, they also conduct online retail operations under many different brand names such as Best Buy(Best buy. com, BestBuy. ca), Best Buy Mobile(BestBuyMobile. com, Five Star, Future Shop(FutureShop. ca), Geek Squad, Magnolia Audio Video, Pacific Sales and The Phone House(PhoneHouse. com).
The Domestic segment consists of the operations in all states, districts and territories of the United States, operating under brand names, including, but not limited to, Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video and Pacific Sales. The International segment consists of all Canada operation, operating under brand names Best Buy, Best Buy Mobile, Cell Shop, Connect Pro, Future Shop and Geek Squad; all China operations, operating under the brand name Five Star and all Mexico operations, operating under the brand names Best Buy and Geek Squad.
Domestic Segment U. S. Best Buy stores and related online channels offer revenue in six categories; Appliances, Computing and Mobile Phones, Consumer Electronics, Entertainment, Services and Other. Consumer Electronics Consumer Electronics consist of video and audio products.. The Computing and Mobile Phones revenue ategory includes notebook and desktop computers , tablets, monitors, mobile phones and related subscription service commissions, hard drives and other storage devices, networking equipment, office supplies and other related accessories, such as printers.
The Entertainment revenue category includes video gaming hardware and software, DVDs, Blu-rays, compact disks (CDs), digital downloads and computer software. Audio products include MP3 players and accessories, home theater audio systems and components, musical instruments and mobile electronics, such as car stereo and satellite radio products. Video products include televisions, e-Readers, navigation products, digital cameras and accessories, digital camcorders and accessories, DVD and Blu-ray players.
International Segment In Canada, the Future Consumer Electronics, Computing and Mobile Phones, Entertainment, Services and Other, and at Future Shop only, a sixth revenue category, Appliances. Consumer Electronics consists of video and audio products. Video products include televisions, e-Readers, navigation products, digital cameras and accessories, digital camcorders and accessories and DVD and Blu-ray players. Audio products encompass MP3 layers and accessories, home theater audio systems and components, musical instruments and mobile electronics, such as car stereo and accessories.
The Computing and Mobile Phones revenue category includes notebook and desktop computers, tablets, monitors, mobile phones and related subscription service commissions, hard drives and other storage devices, networking equipment, office supplies and related accessories, such as printers. The Entertainment revenue category includes video game hardware and software, DVDs, Blu-rays, CDs and computer software. The Appliances revenue category includes both major and small appliances. The Services revenue category includes extended warranties, repair, delivery, computer-related services and home theater installation.
The Other revenue category includes non-core offerings, such as snacks and beverages. Canada Best Buy Mobile offerings are included in the Company’s Computing and Mobile Phones revenue category. Revenue from Canada Best Buy Mobile stand-alone stores is derived from mobile phone hardware, subscription service commissions from mobile phone network operators and related mobile phone accessories. In China, its Five Star stores have four revenue categories: Appliances, Consumer Electronics, Computing and Mobile Phones and Services.
The Appliances revenue category includes both major and small appliances, air conditioners and housewares. The Consumer Electronics revenue category consists of video and audio products, including televisions, digital cameras, MP3 players and accessories. The Computing and Mobile Phones revenue category includes desktop and notebook computers, tablets, mobile phones, traditional telephones and accessories. The Services revenue category includes extended warranties, repair, delivery, computer-related services and installation.
The Company’s Best Buy stores in Mexico have offerings in six revenue categories: Consumer Electronics, Computing and Mobile Phones, Entertainment, Appliances, Services and Other. Questions 1) What caused Best Buy to fail in the international market? 2) What Best Buy could have done differently to avoid their failure in the international market? References http://www. bby. com/ http://voices. yahoo. com/expanding-foreign-markets- international-operations-2131 554. html http://www. forbes. com/sites/lauraheller/ 2013/04/30/best-buy-quits-carphone-warehouse-bids- europe-adieu/ http:// www. wikinvest. com/stock/Best_Buy_(BBY)
