Best Buy

One example of environmental scanning Best Buy used is in 1999 when they realized the increase in popularity of digital electronics. They changed their store formats to highlight these digital products. There most recent environmental scanning change was to get in touch with their feminine side. They have recently put a more personal touch in to their stores and customer service.

Environmental Scanning has played a huge role in Best Buy’s evolution. Without paying attention to what is going on around them Best Buy would have probably already failed. I think that every “major evolution” this company has made was based on the facts of the environment.

Well as we all know gas prices are continually increasing. So, hopefully the money they save building the smaller stores will allow them to open more stores. Obviously opening more stores will lead to having stores in more locations. For instance I live in London and the closest Best Buy store to me is Grove City, 20-25 miles away, or Tuttle Crossing 30-40 miles away. I love Best Buy stores but rarely get the chance to go there because they are so far away.

2. First, NUMEROUS OR EQUALLY BALANCED COMPETITORS. Best Buy’s largest competitors are not equally balanced when comparing products. Wal-Mart and Costco were named in the case, both of these competitors provide more than electronics. They also supply food, apparel, health care products and many other things. This can be a disadvantage and an advantage. The disadvantage is that people like the “one stop shop.” The advantage is that those who want real expert opinions will come to Best Buy. Secondly, HIGH FIXED OR STORAGE COSTS. Best Buy has huge super stores and a lot of storage, and so do their competitors. So it seems to be pretty even in this area. Thirdly, SLOW INDUSTRY GROWTH. No need to worry about this, we are in a huge technology boom. The fourth, LACK OF DIFFERENTIATION OR SWITCHING COSTS. Best Buy may have to worry some because both Costco and Wal-Mart are known for their prices, and all three share the some of the same name brands. But, Best Buy has a much wider selection of brands and prices. The fifth condition, CAPACITY MUST BE ADDED IN LARGE INCREMENTS. Best Buy did do this and ended up losing a lot of money. So, they have now decided to down size the new stores being built by thirty to forty times. Number six, DIVERSE COMPETITORS. Their competitors are diverse in all areas of products, providing customers a “one stop shop.” But Best Buy is extremely diverse in their main product category, technology based appliances. Seventh, HIGH STRATEGIC SAKES. Because Wal-Mart and Costco are such large businesses and have so many stores they can sacrifice short term blows because in