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Best Buy Managing For Competitive Advantage Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 1305 words Published: 1st Jan 2015

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The paper is a critical examination of Best Buy managing for competitive advantage. The essay brings forth strategies Best Buy uses as well as how these strategies are put into action in order for it to gain competitive advantage over its competitors. Competitive advantage refers to set of strategic advantages a business have adopted that make it be in a better position to compete or even out shine its rivals. Thus attaining Competitive Advantage fortifies and places an organization in a better position within the competitive business world.

According to Pfeffer 21, this theory of competitive advantage was brought forth by Porter Michael back in 1990. He suggested that business entities as well as other non-profit institutions need to adopt some policies, procedures and plans that will help it to develop very high quality goods and services that can be sold at higher prices to consumers.

With the fact that almost all kind of business entities do meet very stiff competitions there is thus need for each and every organization to adopt the best strategies that will help them cut themselves an edge in this competitive world of business, Best Buy not being an exception. However various business and management scholars have come to a conclusion that having these strategies is not important unless they are adequately managed; hence competitive advantage management (Pfeffer 142). This refers to set of mechanisms and plans that not only places and organization at an upper hand as compared to its competitors but making it stand out in the business environment.

The paper recognizes Best Buy competitive advantage as being it customer-centricity this implies delivering modified and extremely personalized service to clients. All this has been attained by automating the services it provides to customers by using online services.

Best Buy customer centered strategy

It has been argued out that once an organization clearly understands the need, wants and aspiration of its customers, there is nothing that will block it from excelling provided it takes corrective actions towards attaining the same. Additionally, research as shown that business entities that focus or are customer oriented do have higher chances of securing a competitive advantage which in most cases translates to higher revenue generation, price earnings ratio, highly satisfied customers thus creating customer loyalty. This concept seems to have been well mastered by Best Buy. For instance, since the plan was rolled out, the profit margin for the organization rose by almost 3% (Jaynie & Flanagan 122).

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It is worth mentioning that the strategy has been successful thanks to technological innovation that has allowed customers to even buy good 24/7 even during the holidays. It is important to note although this strategy was recently launched, the organization adequately trained and educated its store-level workforce so that they could be in a position to have in mind the varied needs of the customers on the basis of how they were segmented.

One strategy that was a milestone in taking the business where it is to day is customers’ segmentation. Best Buy segmented its customers into five different levels which include; small-business customers that utilize the business’ services and products to foster increased profits in their business, busy mothers leaving in suburban that aim at enriching their kids way of life with technological innovation especially in entertainment,, men having families that are in quest of bettering their general way of living through entertainment and other ways, young men who are is thirst of technological innovation and finally very rich professionals that seek the best in terms of entertainment as well as other life experiences. It is worth noting heretthat this I in line with the notion brought forth by Mentzer in his article titles ‘Achieving Competitive Advantage through Supply Chain Management’ he suggested that not all customers are created equally because there are those that are very crucial to success of any organization while some are not as crucial as other and thus need to be treated by using a different approach. This has been adequately addressed by Best Buy by segmenting its customers (Mentzer 3).

According to Mentzer 1 after successfully carrying out a survey, which included slightly over thirty of its stores, Best Buy started rolling the strategy of computerizing the quote-to-order process aimed at making it possible for customers to buy in a 24/7 hour basis even if it is on holidays. In total over hundred of the company’s store adopted this strategy. Reports suggested that the company financial result could be boosted and indeed it was and that less cynical outcomes are expected as well as development of a stable link between the company and its customers.

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Additionally, it is important to remember that for any organization to be prosperous even in its best strategies, the part played by its workforce is of paramount, it is evident that the company did provide education and training to its employee’s so that they could be well equipped with knowledge to help customers. An example where customer centricity was attained through the efforts of store employees is in Pasadena store in which there was a reconfiguration of the place to appeal to suburban mothers (Peppers & Rogers 4) It entailed transferring small electrical appliances to a low rack situated on the walk way of the store from high shelves, this boosted sales of the same to almost two folds.

Generally speaking, the company strategy fundamentally rests on viewing its initiatives from the customers’ point of view, clearly understanding what they need as well as trying its best in meeting these needs (Jaynie & Flanagan 211). According to the vice chairman and CEO of the company, this is what gives them a cutting edge in the business environment.

On the same note, the company has adopted a way of distributing its goods that is inline with customers demand and aspirations. This has time and a gained been managed by using enterprise resource planning system that seem to have successfully synchronized the need of clients. Additionally, the company best strategy is also its ability to harmonize it various chains of supply together with what its stores need; (Peppers & Rogers 2) this has resulted to those employees who work as sales representative having at their disposal a variety of products that meet the needs of those customers that are dear to the company.

Similarly, it is worth mentioning that Best Buy has successfully adopted technological innovation whereby customers need not to come to their stores to select or see those appliances they plan to buy. This carries with it a number of advantages for instance convenience and lack of being pressurized by sales persons to buy (Pfeffer 164). Additionally, it give one enough time to scrutinize the features one desire to have in a given appliance.


From the review of competitive advantage management of Best Buy Company, it is evident that technological innovation adoption and focusing in customer and empowering its employees are among the strategies that have played a better part in shaping the company. What make the company different is that it has clearly understood what its customers need and have taken serious steps towards attaining those things desired by the customers. It is thus no doubt that the company has thrived despite stiff competition from other well known business organizations such as Wal Mart, Dell among other. In my view, every organization must adopt a set of strategies to help it thrive now and in future.


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