Best Buy's Supply Chain Management Practices - A Customer-Centric Approach to Business

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Case Details:

Case Code : OPER083
Case Length : 15 Pages
Period : 2005-2009
Organization : Best Buy Company Inc.
Pub Date : 2009
Teaching Note :Not Available
Countries : US
Industry : Consumer Electronics Retailing

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We believe this new operating model offers our customers a richer in-store experience, including better shopping assistance as well as more of the products and services they want. Over time, we believe that our customer-centricity work will help us attract new customer segments to our stores, which leverages our existing assets. In addition, it gives us an engine for continuing to innovate and respond to changing customer needs." ¹

- Brad Anderson, CEO, Best Buy, in April 2005.

"Don't look at the supply chain from a cost perspective. Look at the size of missed opportunities. When a customer opportunity is missed, you can't get it back." ²

- Robert A. Willett, CEO, Best Buy International, in January 2006.

Introduction

For the fiscal year 2008-09, the US-based consumer electronics retailer Best Buy Company Inc. (Best Buy) reported a net profit of US$ 1 billion on revenues of US$ 45.01 billion.

However, its closest competitor in terms of revenues, Circuit City Stores Inc. (Circuit City)³, could not even survive and filed for Chapter 11 bankruptcy on November 10, 2008.

According to analysts, Best Buy, the leader in the consumer electronics (CE) retailing industry in the US, differentiated itself from competitors through superior customer focus whereas its competitors focused more on price leadership.

Best Buy's Supply Chain Management Practices - A Customer-Centric Approach to Business - Next Page>>

1] Laura Heller, "Customer Centric Model Future Focus at Best Buy," DSN Retailing Today, April 25, 2005.
2] Ken Cotrill, "Best Buy's Supply Chain Transformation," http://hbswk.hbs.edu, January 23, 2006.
3] Founded in 1949 in Richmond, Virginia, Circuit City is one of the leading consumer electronics retailers in USA.


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