Written Assignment
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Best Buy Company
Taking a business brand in global markets might be appealing due to lots of existing and arising market opportunities. Most companies would never hesitate to seize such opportunities that are always ideal for businesses to generate more revenues. However, going global can be equally challenging for firms. Learning and adapting to new laws, establishing a new consumer base, and getting trusty associates can pose dangerous drawbacks for a business that could eventually pull it out of the market (Laudone, 2016). Best Buy is one of the companies that struggled in penetrating the European market, Turkey, and China. Best Buy is a firm that offers a wide variety of electronic commodities and appliances. Despite having a substantial market share in the US, the company failed in its endeavor to enter various markets.
China offered a great development opportunity for Best Buy Company, considering that it has a large population of the growing middle-class, and also nearness to many electronic manufacturers. Despite researching the Chinese market for a period of six years, the company’s plans failed. Their failure in this market can be attributed to three critical problems, namely; cost-conscious consumers, piracy issues, and unusual format of the big-box retailing. The availability of more manufacturing infrastructure in China provided an opportunity for its competitors to develop a wide variety of counterfeit commodities. Additionally, most Chinese consumers became too price-sensitive, bearing in mind that Best Buy’s products were priced higher than what its competitors offered. To be successful, Best But should have invested well brand development considering that it was a new brand in this market (Canadean Company Reports, 2014). By having a reliable brand name, it could have been more comfortable for the company to limit counterfeit risks as it could be having the most trusted selling point. Most Chinese consumers are willing to offer premium prices for established brands since they believe its products are of a high-value proposition. As such, the company should have utilized price leadership techniques such as providing its commodities at reduced prices, which could have helped it gain customer loyalty. More so, the firm should have invested well in strategic marketing by utilizing various approaches that incorporate both traditional and modern techniques. Also, considering its main target audience, which comprised of the middle-class individuals, Best Buy should have enhanced its means of communication to provide clear explanations regarding its premium prices.
With a great portion of resources in turkey, the company also failed to capitalize on the available opportunity in turkey due to its inability to focus strategically. Best Buy endeavored to offer similar products that it used to produce. The company did not develop products that could bring a difference in the market. Additionally, it lost considerably in price competition as it relied on fixed prices that were rated high. Best buy should have invested in product development to diversify its range of products that will offer customers an extensive range of products to choose from. Additionally, the company should have valued its products at reduced prices to persuade buyers and establish a strong relationship with them..
In the UK, the company tried to offer the British consumers US-style retailing, a plan that included utilizing big box stores. However, the strategy failed because the company flopped in brand development. The company slump because of its inability to study the consumers shopping behavior. With advanced technology, most UK consumers shifted to online shopping due to increased fuel prices and the need for convenience. To make its operations successful, Best Buy should have kept track of their consumer behavior and launch online shopping services could have adequately served their needs.
Therefore, Strategic planning is an essential aspect that businesses going global should utilize to foster their operations in a successful manner.
References
Canadean Company Reports. (2014). Best Buy Co, Inc. : Retail – Company Profile, SWOT & Financial Report. Basingstoke: GlobalData plc. Retrieved may 16, 2020, from https://search.proquest.com/docview/1547422089?accountid=151051
Laudone, S. S. (2016). THE FOREIGN CORRUPT PRACTICES ACT: UNBRIDLED ENFORCEMENT AND FLAWED CULPABILITY STANDARDS DETER SMEs FROM ENTERING THE GLOBAL MARKETPLACE. Journal of Criminal Law & Criminology; , 106(2), 355-404. Retrieved may 16, 2020, from https://search.proquest.com/docview/1879966705?accountid=151051
Warren, J. K., & Mark, C. ,. (2015). Global Marketing (8 ed.). New York, United States: Pearson Education Limited. Retrieved may 16, 2020