BUS499 Strayer Best Buy Company Case Study

Finding the Best Buy” Please respond to the following:

· Read the Finding the Best Buy case located in the blue cases pages of the textbook.

· Corporate governance has become a hot issue in the U.S. over the past two decades. From your analysis of the case study, determine two possible corporate governance challenges that might be faced by Best Buy as a result of its rapid growth and why they could become corporate governance issues.

· Make recommendations for how Best Buy can overcome these challenges. Provide specific examples to support your response.

Some responses posted by my peers:

1. Best Buy is currently facing an uphill battle as their accounting, governance, and financial problems worsen. A huge problem that Best Buy has is that their products are more expensive than their competitors. I do the same thing other people do. I shop on Best Buys website to research products I want and then buy them from another company at a lower cost. People along with myself trust Best Buys products, therefore we are using them only as a reference. The only thing I have purchased from them in the last 10 years is a computer because I do not trust anyone else to sell me a quality desktop. Another issue is that the bargain priced products are only available on Best Buy’s website. This is discouraging to customers, for they cannot see the product in the store and have to pay a hefty shipping charge. The corporate governors need to begin price matching their competitors. If they don’t watch out, they will end up like Circuit City. This over-priced cost issue can end up causing Best Buy to face financial issues. Another challenge they may face is keeping up with offering all new technologies. This is what Best Buy is known for. If they can’t continue to offer the newest products then customers will start shopping elsewhere.

Best Buy needs to price match. The competition is getting bigger and they need to stay in the game. Another thing Best Buy needs to do is offer more affordable products in the store and not just their website. There are many things that I have been interested in purchasing from them online but won’t because they are not tangible. They need to continue to offer amazing customer service to their customers and continue to stay up with the newest technologies.

2. I think that one of the issues could be the fact that they rapidly expanded so much, but then saw that the stores they took on were unsuccessful. I feel that this rapid expansion was driven by greed and a vision of making more money, which only created more debt due to the inexperience of the decision makers. As stated in the text, “the firm closed almost 100 Musicland Group stores in early 2003 (1). I think they made a smart decision with product diversification as sales look to be declining with their electronics industry, one that I would say used to be the best part of their business. If I wanted a good quality electronic for my car, like a radio, I would go to them instead of Circuit City. If I want a computer now, I would go to them instead of anywhere else because of their high quality HP and Dell computers, in my opinion. Looking at the changing times and how the recession has impacted most people, I would look elsewhere for certain products. I would go to Amazon for the cheapest product, unless it was a computer where I knew Best Buy had the Geek Squad protection plan. Best Buy, according to the text, “observed companies like Walmart and Target and then acted as a “fast follower” to implement new ideas and efficiencies” (1). What they weren’t good at was being proactive vice reactive. They lacked the managerial experience needed to run their stores and earn above average returns. They failed to adapt to the changing ways of people relying on and solely buying high quality products. The best thing for them to do is to reduce the “separation between ownership and managerial control” (1). Bring in some highly effective management and effectively analyze their external environment. Once they figure out their opportunities and weaknesses, they need to adjust to it and maintain their effectiveness. I would even go as far as saying they need to stop buying out their competitors thinking it will help them because it is only creating more debt.


1. Michael Hitt. 2013. Strategic Management: Concepts and Cases: Competitiveness and Globalization, 10th Edition.


3. Corporate governance is building up the framework and rules of you community and team members. Making sure everyone is treated fair. This implies to employees, customers, stakeholders, etc.. It refers to rewards, incentives, bonuses, discounts, and customer services. Best Buy has not always been my first choice. It was years ago before Amazon, Target, Sams Club and P.C Richards came out. Their prices seemed fair because they did not have many competitors. Today, these other competitors offer better discounts and savings. Some will allow you to use a coupon. When you shop Best Buy a lot of the items are not available in store or online. Shipping time takes several days or weeks. The one thing I do like is their Geek Squad when you have an issue with your electronics. They can be expense at times. Best Buy needs to plan ahead if they want to remain open in the future, especially now, Amazon has taken over.


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