Monday, May 10, 2010

Best Buy Lands In Europe


Best Buy is obviously the leader of the electronic goods retail in the United States. It owned in 2009 22.2% of marketshares, and sold for about $50 billions.

Here are some of the key factors of success of Best Buy:

  • A customer centric company: This is for sure one of the best CRM case study ever. They have implemented a strategy allowing them to leverage their salesforce insights, and to create different store concepts to suit the most the zone where they have picked to settle.
    Their store concepts: Best Buy doesn’t stop to try new store concepts, to be on top of the competition.

Customer service: Once again, they have created with the Geek squad a service which provides them with a legitimacy in the high tech world.

Best Buy To Face A Great Challenge
Now the biggest challenge is that Best Buy is entering new markets where the competition is already pretty tough with large companies. Also, the market is actually plummeting in Europe. Nevertheless, Best Buy has strong arguments to establish a strong presence in Europe.
Also, Best Buy has become strong thanks to its centralized approach. They control everything, and everything is standard. But in Europe, you have great differences from a country to another, in terms of culture, customer decision making process, or even product range. This implies to have more flexibility to adapt to the local demand.

Especially, I believe they should focus a lot on creating a great ecommerce website as they have in the US to make sure to have a competitive advantage. Indeed, not so much electronic goods retailers have been able to make the best of both their online and retail presence.

I believe that thanks to their customer centricity strategy they will be able to face the competition. Let’s not forget that in 2003 when they have set this new strategy, Best Buy was struggling against Wall Mart which was cutting the prices. In order to get out of this negative spiral, they have decided to focus on customer service, providing essential extras Wall Mart would not.

Best Buy To Make Acquisitions In Europe?
It is probable to move fast in the market that Best Buy will be eager to make an acquisition, or at least a partnership.

  • We have already discussed on this blog that Carrefour is looking for a partner to boost its ecommerce strategy.
  • PPR’s retails Fnac and Conforama are in the market.
  • Even Darty would be a potential acquisition, as Best Buy is way bigger than them.
  • We have seen that Best Buy was thinking about buying Pixmania...


I am glad as a customer that Best Buy is coming into Europe. Now the task is tough, and it will be interesting how they’ll be able to breakout while the market is already so tough. What do you think about it?