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Best Buy Strategic Initative Essay

1499 words - 6 pages

Best Buy Strategic Initiative

November 19, 2013
Nicole Church

Best Buy Strategic Initiative
For every company to grow and survive in the long run, they must have a strategic plan of where the company is and where they want it to go. It is of the utmost importance for top management and the board of directors to ascertain a strategic game plan for the organization. This will serve as an outline specifically identifying the precise steps they are going to take to meet their agenda. Major companies, such as Best Buy, will outline this in their annual report to shareholders. A major component of this is the financial planning on how costs and sales will be affected and the ...view middle of the document...

These supplemental schedules provide the updated fiscal 2012 and fiscal 2013 income statement, non-GAAP results, segment information and revenue category information, as well as the fiscal 2013 balance sheet recast to reflect Best Buy Europe as held for sale. All fiscal 2012 and fiscal 2013 information within is for a 12-month period and based on our new fiscal year.
On July 17, 2013, the information was updated to reflect a reclassification of income tax expense between continuing and discontinued operations for certain periods. These periods include Q1, Q2 and Q4 of FY12 and Q4 of FY13.
Described below are certain risk factors that we believe apply to its business and the industry in which it operates. The following risk factors should be considered in conjunction with other information provided. These risk factors could include, but are not limited to, potential events, trends or other circumstances that could adversely affect business, financial condition, results of operations, cash flows, liquidity or access to sources of financing, and consequently, the market value of common stock and debt instruments. These risk factors could cause future results to differ materially from historical results and from guidance that is provided regarding expectations of future financial performance. The risk factors described below should not be construed as an exhaustive list of all the risks that could be faced. There may be others that we have not identified or that we have deemed to be immaterial.
Best buy has to cut cost to keep itself viable and open in the future market. They are restructuring their business model by decreasing the number of stores and combining stand-alone smaller stores (i.e. geek squad, and mobile phone services into a one-stop shop.) Part of the downsizing includes closing stores that were in close proximity of each other and, therefore, not profitable. This will decrease operation costs and allow them to compete with other retailers in the price arena by reducing their prices.
Another implementation was starting a price matching program so they could be more competitive with online and other chains. Not only does this increase revenue but it lowers the cost of goods sold, as it is more cost efficient for on-line sales due to lower operating expenses in the form of overhead and rent. The cost to have one big warehouse that houses all Best Buy products, with a limited staff that can ship orders anywhere in the world is much more profitable than having standalone store locations that require additional employees and retail space. Also, on-line will be able to reach a greater client base and will improve cost and the turnover ratio. In a business like Best Buy, due to the rapid, consistently-changing technology, it is imperative that products are moved quickly or otherwise Best Buy may find it has an overage of inventory that is out-dated and unsellable.
Best Buy’s strategic plan for 2014 is headed in the...

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