Is the largest Electronic Store of the Country in Trouble? Let’s find out..

Today, we are going to talk about one of the largest electronic stores of United States of America. Best buy has been one of the leading electronic suppliers for many years not only in United States but many other countries. After Circuit City going out of business, many of us thought that there is no looking back for this company. However, after Amazon coming into the industry it gave Best buy a tough competition and many people are turning towards online shopping in search better deals and lower prices.

After facing tough losses and losing its market share against many retailers like Amazon, Wal-mart and Apple Best buy has reported 1.7 billion dollar losses for its fourth quarter in March. In order to recover from these loses Best buy came up with a new plan to eliminate about 400 stores out of its 1100 stores in United States. “In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” Best Buy CEO Brian J. Dunn said in a statement. The company is expecting to achieve $800 million in cost reductions by its fiscal year 2015. Besides cutting down its locations and laying off many employees best buy is also planning to change the architecture of its existing and new stores.

Best buy has also announced that they are going to take out most of their displays and not have any source of internet connections in their stores to avoid customers going online to compare prices with its competitors. Best buy is also planning to invest more in Best Buy Mobile, and open 100 more locations.  As part of the company’s new strategy, Best Buy will remodel some of its big box stores with what it calls a “Connected Store” format. These stores will “focus on connections, services and multi-channel experience through a total transformation of both the store and the operating environment.” They are planning to move their tablets and best buy mobile departments in front of the store and move all the other departments in the back of the store.

Although I feel the approach best buy is taking might help them for short period of time, However it is about time for Best buy to focus more on e-business. What do you guys think? With the booming e-business industries and many customers trying to compare prices and looking for a best deal possible, can best buy ever get on the top position ? Does best buy needs to work more on their store and operations management or do they need to focus more towards e-business?

 

Will the future generations get to use desktops or will it become history? Looking at the pace of how the technology is changing every day, it may be safe to say that the computer desktops may just become a history that our future generations might just learn or study about. Many larger companies like HP announced that they will stop making PC’s and pulling themselves out of hardware business. According to an article posted on BBC NEWS “HP is recognizing what the world has recognized, which is hardware in terms of consumers is not a huge growth business anymore,” said Michael Yoshikami, chief executive of YCMNET Advisors.

There use to be a time when every American household use to own a desktop. However, newer tech gadgets like laptops, smart phones and tablets are taking over the PC market. Many new companies are replacing their PCs with the laptops, so they don’t have to provide their employees with two different computers. This will not only reduce the cost, but it also helps lowering their inventory and maintenance cost. From the customer’s perspective, customers are looking for a product that is high in performance and smaller in size. Many teens and older generations are looking for a computer that is compatible and easy to travel with. Hence, they are replacing their Desktops by laptops and laptops by tablets. This brings me back to the concept of Product Life Cycle that we learned in class. Every product goes through as sequence of four different stages of product life cycle as follows; Introduction, Growth, Maturity and Decline.

Introduction is the stage where new products are introduced and customer awareness is created. Companies invest heavily in R&D to ensure they have a good product. Product design and development is very important in this stage.  Coming back to the concept of changing technology, I believe tablets are in the Introduction Stage of its product cycle. Companies are investing more money in design, development of these products.

Next stage of the Product Life Cycle is Growth. In this stage of the cycle, management focuses more on forecasting aspect of the product. Operations Management increase capacity, they increase their distribution and company focuses more on the product and its reliability. For example Laptops, they can be considered to be in the Growth stage. More and More customers are turning over to laptops. In order to save space at homes and to be able to get rid of huge towers in their house, many customers these days are replacing their towers with their laptops.

Next stage of the Product Life Cycle is Maturity. In this stage of the cycle, the product reaches its peak point and standardize. Competitive costs become critical in this stage. Industries tend to make fewer changes and increase stability of the product. For Example Net books, although net books were introduce way after laptops. The life cycle of net books was very small. Ipads and other tablets took over the market and net books grew to the maturity rate. Customers often prefer buying a tablet because it is smaller in size, and has all the functions that a net book has. Though the size of both the products are relatively same tablets however, are lighter in weight and has better graphics than net books.

Last stage of the Product Life Cycle is Decline. Companies make few or no product differentiation, the cost will be minimized and companies are often left with overcapacity in the industry. The sales starts going down and the customers decline the product. For example desktops; many people are replacing their huge tower that takes most of the space in the room with small and compatible laptops.  Many stores either stopped or reduced carrying any towers because of the decline in the market.

In conclusion, with the fast growing technology it comes to no surprise that companies will eventually stop making desktops. The concept of having a desktop may become history to the new and upcoming generations in the future.

 

Resources:

http://www.bbc.co.uk/news/business-14584428

 

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