Reinventing Best Buy

Case Solution

John R. Wells, Gabriel Ellsworth
Harvard Business School ()

On March 1, 2017, Best Buy Company, Inc., North America’s largest consumer electronics and home appliance retailer, announced a third year of comparable increases in store sales and an increase of 20.8 % in domestic comparable online sales. These results were in stark contrast to a four-year decline in comparable store sales from 2010 to 2013. The share price rose 17% in March and exceeded $ 50 for the first time since January 2008 on April 20, 2017 in September 2012 Best Buy lost share in Amazon .com, encouraging consumers to view products at Best Buy and other brick-and-mortar stores and then buy them online at a lower price, a practice known as “showrooming.” Undaunted, Joly had promoted the practice, convinced it was an opportunity to sell to customers as long as Best Buy’s prices were competitive. Joly had committed the company to a multi-channel strategy in North America and withdrew from difficult international activities. As a result, operating margins had increased, but growth was still difficult to pin down. In early 2017, Joly announced that his restructuring efforts for “Renew Blue” were complete and that he now intends to develop New Blue. Would the new strategy be enough to stop Amazon’s progress?

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