Best Buy Internal and External Analysis

5766 words 24 pages
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Internal Analysis: Core Competencies, Strengths and Weakness
The (RCC) / VC model is used to determine how Best Buy bundled its resources to create capabilities and how these capabilities become the company’s core competencies which will be their source of competitive advantage.

TANGIBLE RESOURCES
Financial Resources
- Revenue growth slowed to a miniscule 1.6% over the course of fiscal year 2011.
- Domestic revenue reaches $37.1 billion while International revenue reaches $13.1 billion in 2011.
- Majority of Best Buy acquisitions of foreign electronics companies have been profitable.
- Domestic sales contribute 74% of the total gross revenues- $37.2 million compared to $13.1 billion from the international segment.
- Total revenue has been …show more content…

Capabilities
Through the resources identified, the capabilities of Best Buy are Management, Distribution, Human Resource and Marketing.

Management
Financial, Organizational, Human, Technological resources
The management team is strong. They are able to react quickly to the market changes. Schulze was the founder of Best Buy. He evolved Best Buy to a mass merchandiser. As this approach was successful, he rapidly expanded Best Buy throughout the US. In 1999, he launched a separate subsidiary called BestBuy.com to claim its stake to the online market. He added more value to Best Buy by having new ventures, and both domestic and overseas acquisitions. Best Buy observed from Walmart and Target and act as a “fast follower” to implement new ideas and efficiencies in ways suited to Best Buy. Best Buy formed a new strategy called “Connected World” to cope with the future challenges.

Distribution
Financial, Organizational and Human resources
With 1,400 stores in North America and over 2,600 stores in Europe and China, Best Buy will need to cope so the logistical issues from one point to another. This includes delivery of the correct goods to the correct customer at the correct place and time. Best Buy managed to learn from Walmart and Target on how they tackle the logistical issues and was then able to quickly and accurately distribute its products to stores and customer worldwide.

Customer Service
Financial, Human, Organizational, Technology resources
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