Best Buy and Circuit City's Revenue Models: The Threat from Wal-Mart?



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Code :BSM0029

Year : 2005

Industry : Retailing

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Abstract: Best Buy, Wal-Mart and Circuit City are the top three consumer electronics retailers in the US. Over the years, Best Buy and Circuit City have built a reputation for selling quality goods along with high value customer assistance at the point of sale. However, due to commoditisation, profits at the retailers are fed not by the low margins on electronics goods but by commissions earned on warranties sold along with the goods. Wal-Mart, although a leading electronics retailer, only started selling warranties in October 2005.

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Pedagogical Objectives:

  • To highlight the importance of warranty revenues to the bottom lines of Best Buy and Circuit City
  • To discuss the threat posed by Wal-Mart to the revenue models of Best Buy and Circuit City

    Keywords : Best Buy; Circuit City; Wal-Mart; Revenue model; Consumer electronics retailer; Sound of Music; Extended warranties; Warranty sales commission; Securities and Exchange Commission (SEC); Warranty week; Upscale image; Product care plan; Competitive Strategies Case Study; Down-market image; Concept I store

    Contents :
    » BestBuy and CircuitCity's Revenue Models: Profits from Extended Warranties
    » Wal-Mart in Warranty Business: Hitting Where it Hurts Most


    Case Introduction >>


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