Case Detail

Case Summary

Best Buy: Creating a Winning Customer Experience in Consumer Electronics

Case Number: 5-217-251, Year Published: 2017

HBS Number: KE1023

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Authors: Mohanbir Sawhney; Pallavi Goodman; Ganesan Keerthivasan

Key Concepts

Cash Flow Analysis, Competitive Strategy, Consumer Marketing, E-Commerce, Marketing Strategy

Abstract

After a successful run for many years as a resilient consumer electronics giant, Best Buy was under intense pressure at the end of 2014. Even as competitors like Circuit City melted away, Best Buy had been able to withstand the onslaught of online behemoth Amazon and discount retailers like Target and Walmart. However, its competitive position was threatened as online shopping became more popular, particularly among millennial customers.

With a new leadership team, Best Buy had recently undertaken bold initiatives to expand and refine its online presence and position itself for success. These initiatives had produced encouraging results, but Best Buy needed to do more to stem the loss of market share to Amazon and to become more relevant to millennial customers. To address these challenges, Best Buy approached the Kellogg School of Management to solicit ideas from student teams by sponsoring a Business Challenge competition. The teams came up with several strategic initiatives. Best Buy needed to evaluate these initiatives on two criteria: First, how well did these initiatives leverage Best Buy's privileged physical assets (stores, salespeople, and Geek Squad services staff) to create a winning customer experience? Second, how effective would these initiatives be in attracting and retaining millennial customers?

Learning Objectives

After reading and analyzing the case, students will be able to understand how digital disruption impacts incumbents and how incumbents can compete against digital disruptors like Amazon; design a superior omnichannel customer retail experience by combining physical and digital channels; examine how incumbents can leverage their "privileged assets" to compete against disruptors; and conduct financial analysis of strategic initiatives to determine the best path forward.

Number of Pages: 18

Extended Case Information

Teaching Areas: Marketing

Teaching Note Available: Yes

Geographic: United States

Industry: Electronics retail

Organization Name: Best Buy

Organization Size: Large

Decision Maker Position: Chief marketing officer

Decision Maker Gender: Male

Year of Case: 2014