Chapter Closing Case

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Question 1: What are Best Buy’s organizational strengths? Based on your response, which of Porter’s generic strategies do you recommend Best Buy to adopt? Why? Best Buy’s organizational strengths are: - Powerful scaling capability - Low cost advantage over its competitors - High level of community service and local involvement - Strong market share in retail-market - Good customer service Based on Best Buy’s organizational strengths. It’s suitable for Best Buy to adopt Differentiation Strategy, on of Porter’s generic strategies. Because one of Best Buy’s organizational strengths and advantages is having strong market share in retail-market. More-over, Best Buy has low cost advantage over its competitor so it don’t have to put a lot of focus on this segment. Best Buy always very good at getting high volumes of products out of its factory to its stores. But they still need to evolve, to reengineered its supply chain to improve their business. Now with the differentiation strategy, every process of Best Buy is related to the customer needs. Whenever the customers walk into the store, they will have support from Best Buy’s employees. As Mr. Anderson said “The closer you get to the customer, the better your ability to see what the needs of business are”. Differentiation strategy, which offers unique features that are valued by the customer is such a great strategy for Best Buy to adopt. By using this strategy, Best Buy will step-by-step win the market share and challenge the other competitors. Question 2: How do Anderson’s two new strategies increase Best Buy’s differentiation advantage? How do they increase Best Buy’s low-cost advantage? a) Increasing Best Buy’s differentiation advantage: Anderson use first strategy as focusing on the customer’s experience at Best Buy. Why you have to focus on customer’s

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