Best Buy Questions Whether New Management Strategy Can Steer the Company Back on Track


Best Buy has to rethink it’s management plan because it is losing business. From a sales perspective, it has not been doing as well as it once was, and in this economy, it is really taking a toll on the business. The number one reason for the drop in sales is due to inexperienced sales associates who can not adequately tend to customer’s questions and needs. One retailer analyst, Gary Balter, referred to the franchise as “that blue and gold store where the salesperson usually can’t help you.”  This does not send out a good message to consumers nor help to turn this around. So what is Best Buy going to change in it’s operation strategy? Clearly, what they are doing now is not working.

One possible solution is that the Vice President is trying to turn this around by starting to implement product knowledge education into the company. If the number one reason for lack of sales is the sales people, then that is where the VP should start. By training the employees properly and quizzing them on the products, they can be more helpful to the customers who are asking the questions. Giving incentives for reaching sales goals is another great way to boost sales and invigorate energy out on the sales floor. Scheduling the strongest employees on weekends, when Best Buy stores are at their busiest, is another smart approach that the company has begun to implement.

One problem that Best Buy faces is it’s online competition. Twenty percent of Best Buy’s business comes through online purchases, but it’s competitors have a one-up on them. Running online operations is costly, far higher than other websites because of the high labor costs and long-term leases that come along with the fourteen-hundred existing retail stores. Another issue that pops up with the retail locations is the fact that many of the people that walk in the door are “browsers,” not “buyers.” Many will seek out different products yet resort to purchasing online or not at all, causing some stores to go out of business. There has been no improvement with store closures yet, but with the new strategy implementation taking place, customer satisfaction has gone up a bit recently.

Amongst other problems, staff turnover is higher than ever, historically speaking. The average staff turnover to date is about sixty percent, increasing from thirty five percent in previous years.

It is always a sad thing to see American companies go out of business. Hopefully, the VP’s plan works because as we’ve learned, understanding the marketplace and customers needs, wants, and demands is a crucial element in the success of maintaining a business. Operating costs are a key factor to take into consideration as well. Do you think Best Buy has a chance?


8 thoughts on “Best Buy Questions Whether New Management Strategy Can Steer the Company Back on Track

  1. I see a couple of good points above. I did my first blog for this class on the same article and came to the same conclusion you did. Best buy just is not following through when it comes to employees and product knowledge. The employees may not see an incentive to do better or feel like upper management isn’t showing enthusiasm and thus they put in less effort. To tell you the truth I don’t think best buy has a very good chance but I hope that they can change their strategies and make it because so many stores are closing and we will only be left with a word of technology.

  2. Hopefully this will be BestBuy’s savior! This is such a great company with a great history and a ton of knowledge. Competition is extremely tough and many companies like Best Buy are suffering. I think this new management strategy will be the key to re-success within the company due to its innovation technique within management. Combating companies with a “one-stop-shop” will be the difficulty here and will need to be an obstacle Best Buy hurdles.

  3. I think if Best Buy had knowledgeable people to help customers it would help them big time. I know when I go in there, I feel like I have to be the one to do all of the research before hand because more than likely the sales people on the floor aren’t going to have much more knowledge than I do. If the salespeople knew what they were talking about, I am more inclined to buy from them because of the help they’ve given me. Yet at the same time when I go in there and get answers that aren’t helpful in any way, it only makes me want to go somewhere else. When Ultimate electronics and Circuit City were in business, I used to think Best Buy was more knowledgeable and helpful, but since there aren’t that many electronics stores as competition, I feel that they are lacking now. Hopefully something can change; I don’t want to see Best Buy go out of business.

  4. Recently one of Best Buy’s biggest moves is that it partnered up with Samsung. This partnership will allow Samsung to open up an estimated 500 “store within a store” which started in May. Seeing how Samsung is first place compared to Apple, Google, Amazon etc. this will hopefully increase Best Buy’s customer traffic which I think will increase leverage from its suppliers such as Apple. The only future outcome that I see for Best Buy is a boost in profits.

  5. I completely agree with you that Best Buy needs to think something really fast if they want to be around in market and first thing that they can do towards this issue is hire people you actually know about the stuff that they are selling. I have myself seen that whenever I would go to shop there and I would have any question and ask one of their employees most time they wouldn’t know the specification of the products. This is truly the worst way to do business. I hope their venture with Samsung would help them turn their fortunes around.

  6. You have nailed this article. I could not agree with what you have said and the key points about the fall of best buy. Its not only because of best buy’s employees not be knowledgable in the products they are selling, they dont seem to be motivated by themselves to educate themselves in it as well on the side. I used to work at circuit city before it filed for bankruptcy and let me tell you, the training program sucks. They dont teach you anything except show you those cheesy 90’s video about how to act in a store. Were selling products and thats what we should know. Second problem with a store like best buy is that it rely’s mostly on technology. Most people will browse and then buy it either on amazon or ebay. Its cheaper; why pay for something twice as much. Second is that people barely buy movies or cds anymore and that hurts best buys sales. I hope they can change the values of the company around for the better.

  7. This article made think about reliable customer service. Having educated business assistants is part of a quality business. Anyone who wants to stay in business has to provide a quality service to the customers. Stores should be places where potential customers could establish personal relationships through interactions with shop assistants. For example, I shopped for a recorder at Best Buy and no one could tell me the difference between two of the models. No one wants to deal with incompetency at any level. This is not acceptable. When I go to the store, I want to speak to someone who can provide me with advice or suggestions. I do not blame people who have been newly hired, but top management has a lack of vision for future prospects. Vision must come from the top management, down to the newly hired staff. Training should be provided. As a result, the relationship will be established and profits will be more significant, instead of having a higher turnover of staff and unsatisfied customers.

  8. As a prior Best Buy employee I can definitely infer that Best Buy has been providing much more training, and I have had the ability to learn all and any departments I was willing to, event though I specialized in Appliances. The biggest struggle I see when it comes to unhelpful employees, is that they are not motivated enough, and unmotivated employees don’t want to learn bout new products and new features. Which is actually what happened to me; after getting an unmotivating raise after a year as a top seller in Appliances, I decided to leave. Since, I have been contacted twice to come back, but unfortunately I have moved on. The point here though is that if you do not treat your employees well, you will have unsatisfied clients. Another issue that Best Buy is facing that is huge is that its a showroom for amazon. We had to deal with that on everyday basis: lowering prices to match no taxes on amazons products which hurts Best Buys profit.

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