留学生作业代写：Best Buy

下面为大家整理一篇优秀的paper代写范文- Best Buy，供大家参考学习，这篇论文讨论了百思买集团。百思买是全球最大的家用电器和电子产品零售集团。而中国是当今世界零售业规模最大、增长最快的市场之一。因此百思买决定进军中国，但却遭遇滑铁卢，最后只能关闭在中国大陆地区的百思买门店，将其经营的业务整合到旗下五星电器品牌。

Abstract

Best Buy is known as the leading consumer electronics retailer in not only the United States, but also in Mexico, and Canada. In February 2011, Best Buy closed all its nine stores in China and merged with Five Star after 5 years when they first entered Chinese market. The successful experience in North America failed in Chinese market for Best Buy as well as other large companies.

China is one of the biggest and fastest-growing markets for retailing business in the world nowadays. The demand of electronics in China is much more than that in the United States and Canada because the large population and the economic developing speed of this country. Hence, with great deal of demanding in Chinese market, a mature retailer could make interest in this area full of potential. However, holding the share of a Chinese local brand called Five Star, Best Buy still suffered Waterloo in China.

This paper is a brief analysis for Best Buy in China. This paper is divided intosix parts to introduce Best Buy in China, the problem it had in Chinese market and the solutions to make the company develop in China further based on the customer’s behavior and other characteristics in Chinese market.

Company Overview

Best Buy Co., Inc. is the leading consumer electronics retailer in the United States. By now it has two divisions which are Best Buy Canada and Best Buy Europe. It also has four subsidiaries, Geek Squad, Magnolia, Pacific Sales and Future Shop. Best Buy offers consumer electronics as well as software, video games, music, mobile phones, digital cameras, car stereos and video cameras. In the meantime, the Best Buy shop, there is an area for computer repaired and other services.

Best Buy entered Chinese market in 2006, before that in 2004, it had already had more than 600 stores in 48 states in the US and 19 stores in Canada. The recorded revenue of it is $27.3 billion. The problem Best Buy had that time is that the 90% of recorded revenue in 2005 is relied on the US market. (Best Buy Co., 2008)Hence in 2006, Best Buy expanded its international business to China.

The expansion in China turned out to be a sorrow story for Best Buy. Different from the successful dual brand strategy in Canada, the strategy only made Best Buy stay in Chinese market for 5 years after their first step by acquiring Jiangsu Five Star Appliance Co. in China. In February 22nd 2011, Best Buy closed all its stores in China and merge them to Five Star. Its management told Reuters that “it has hired a Chinese national to replace Nicolas Wang, who had been CEO of Best Buy's Five Star business but left in March”. (Skariachan, 2013)Till that time, the expansion plan in China ended as a failure.

After leaving China by the name of Best Buy, Best Buy still invests in China through Five Star and other brands like Dynex, Insignia, Modal, Platinum, and Rocketfish. Five star got a large market share in Chinese market, but Best Buy sold it to a Chinese company called Jiayuan CO. in 2014. Hence, the business Best Buy has in China is small now.

Perceived Problem

The failure Best Buy made in China is caused by serval reasons.

From the factor of time, Best Buy entered Chinese market late.(Scrap, 2011)Beforeit entering China, there were already two giant in electronics retailing market, Gome and Suning. By the end of fiscal year 2005, the sale of Gome was 86.93 billion (CNY) with more than 420 store all over China. In the meantime, the sale and stores that Suning had was close behind. However, Best Buy didn’t plan to open as many stores as the two giants, actually before it left China, it had only 9 flagship stores. The problem is Chinese don’t want huge, flagship stores. (Groth, 2011)

Compared with the two local giant, although Five Star was the third large electronics retailer at that time, neither Best Buy nor Five Star was familiar to Chinese customers. As customers would always choose those brand they have already known well instead of some new brand with similar price. Although Best Buy is a famous retail brand in America, which can be a strength in the competition with Gome and Suning, the customers can hardly attracted only by this advantage.

Secondly, Best Buy had different business model with Gome and Suning. The model Chinese retailers used is that they owned a lots of stores and rent some of the stores to different brands. Therefore, their revenue comes from two parts, one is the rent of each brand and the other is the commissions on those brands’ profit. In this model, it is manufactures rather than the retailers to hire salespeople to control their sales. By this model, both Gome and Suning managed to save their cost in salespeople and the customers can get lower price of a same product.On the contrary, the business model Best Buy used is Big Box model, which had helped it earn a lot in the US and Canada by better services. What Best Buy offered to Chinese customers was just the same as what they offered in the US. The service includes selling, installation, repair work and guarantees. The high level service was hardly seen in retail market in China. However, higher service means higher price.(Rein, 2011) Considering the behavior of Chinese customers, they always prefer cheaper ones regardless of the level of the service. For instance, in Best Buy, customers can pay more to have a longer guarantee. But Chinese customers don’t show the interest in paying for future risks. That can also explain the slow development of insurance market in China.(Young.E, 2011)

The Big Box Model Best Buy used had another disadvantage in Chinese market. The employees in stores were more professional persons rather than salesmen. Although the strategy can let customers shopping freely when getting professional answers for their questions, it is opposite to the traditional customer behavior of Chinese. Because Chinese customers, especially elder customers are used to the introduction of zeal salespeople. In some interviews of customers shopped in Best Buy, they thought the store is much more like an exhibition than a mall.

Apart from those two giant in the market, there are more online retailers in electronics market such as Amazon.cn, Jingdong and Taobao. Compared with real stores, online stores can save more cost and offer lower price. As mentioned before, Chinese customers prefer lower price and online shopping is more convenient recently. When Gome and Suning opened their own online stores, Best Buy still stock to its traditional stores. This made it lose a great number of market share in China.

Lastly, as it is important to have a good translation for a brand entering a foreign market, Best Buy has problem in its translation. The translation in Chinese of Best Buy means buy something after a hundred times of thinking. The other typical characteristics of Chinese customers is that they can be superstitious sometimes. So while Best Buy has a good meaning in English, some Chinese customers may think the translation means the product isn’t good enough because you need to consider so much before deciding whether to buy or not.

Perceived Solution

More stores

After leaving the Chinese market itself, Best Buy leave its Chinese business in Five Star and other brands it owns in China. In 2012, one year after Best Buy left Chinese market, Five Star opened nearly 50 stores in China. By the end of year 2012, there are about 210 Five Star stores in China. This number is still less than Gome and Suning, but the revenue of Five Star did increase a lot. Now as Five Star is no longer the brand owned by Best Buy, it should open more stores for its other brands in China.

Balance Between Price and Service

Although it was the high level service that helped Best Buy become one of the top electronics retailers in North America, the strategy didn’t work well in China. From the analysis in the former part, price is the most important factor customers will consider in China. Therefore, Best Buy needs to find a balance between price and service. The store can give customers different choices of services with different price. That can satisfy both those who just want to have lower price and who would like to pay more to have a better service including longer guarantees.

More Salespeople

While young customers in China may like the marketing method Best Buy used, elder customers used to a store with many salespeople to introduce the advantages and sales information of products. As elder customers is still a large group in China, Best Buy should take their preference into consideration. Hence, if it wants to reopen its stores in China, it need to hire more salespeople as well as cut the number of professional employees in every store.

Online Store

Online shopping is becoming more popular around world. Customers would try those electronics in the real store first and then order them online to get a bargain. In the meantime online shopping is a time-saving shopping way without time of driving, parking and bargaining. Best Buy should open its own online store not only in the US but in other area it wants to expand. At the same time, the company should pay more attention to the online store service it has now as the feedback of it isn’t good in the US.

Projected Change

By lower price and more choices of service, Best Buy can expand its target market from high-end market to both high-end and low-end market. A large market can always bring more revenue and popularity.

To employ more salespeople will help sell more products. And they always know how to develop customers. More flow rates means higher possibility of goods selling. The revenue will then become larger.

More real stores and online store will enlarge the market too. By using online store, the sale of the area without Best Buy real store will increase rapidly. Also online shopping can be an ideal data source for the company to decide whether it is necessary to open a new real store in some area.

And online store is a good way for Best Buy to save cost like the rent of a real store. Less professional technological employees will be employed because one can answer the professional questions from different places by the help of internet. This will decrease the human resource cost a lot.

Project Behavioral Influence

When the price become lower, the service can’t be as good as it used to be. However, the store offers different level of services in different price. The low-end customers will enjoy the low price and the high-end customers can enjoy the high level service like long term guarantees by pay more money.

More well-informed and experienced salespeople will help customers who don’t know much about electronics find their best choice. And also a skilled salesman can recommend other products and services the store owns. Many Chinese customers are willing to take the recommendation from skilled salespeople. It can increase the sales.

More real stores will have more flow rates. For those real stores open in or near bid shopping malls, customers shop in the shopping mall may enter into the store and buy something that they didn’t plan at first.

Online store will attract more customers that can’t get to the real store easily as well as those who can’t find what they want in the nearest real store. As Internet is a good way to share information, more customers will get to know Best Buy and take Best Buy into consideration when they are about to buy some electronics.

Projected Future Product Development

In the future, Best Buy will expand more in China through its brand such as Dynex, Insignia, Modal, Platinum, and Rocketfish.The problem Best Buy meets now is that it don’t have a well-known brand in China especially after they sold Five Star. Therefore it need to develop the popularity of the brands they owns in China. They should also open their online store in China as many other foreign retailers did such as Amazon and Walmart.

Summary

Review the problem and solution, although Best Buy failed in China years ago, it can still succeed in China by the solutions. The electronics retailer market in China has great capability for both domestic and international companies. At the same time, the market itself is competitive. It is important for Best Buy to understand Chinese customers’ behavior to earn the market share in China and the other places in the world.

Reference

Best Buy Co., I. (2008, April 30). Best Buy’s 2008 Annual Report. Retrieved from edgar-online: http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=5894201&companyid=11055&ppu=%252fdefault.aspx%253fcik%253d764478

Groth, A. (2011, Nov. 4). Best Buy's Overseas Strategy Is Failing In Europe And China . Retrieved from Business Insider: http://www.businessinsider.com/best-buy-europe-2011-11

Rein, S. (2011, March 11). Why Best Buy Failed in China. Retrieved from CNBC: http://www.cnbc.com/id/41882157

Scrap, S. (2011, Feb. 22). Bye-Bye, Best Buy (China): You had it coming. [UPDATED]. Retrieved from Shanghai Scrap: http://shanghaiscrap.com/2011/02/bye-bye-best-buy-china-you-had-it-coming/

Skariachan, D. (2013). Wall Street to Best Buy-Now, get out of China. Retrieved from reuters: http://www.reuters.com/article/2013/05/02/us-bestbuy-china-idUSBRE94105Q20130502

Young.E. (2011). Cracking the Chinese Retail Market. Retrieved from amchan-shanghai: http://www.amcham-shanghai.org/amchamportal/infovault_library/2011/Cracking_the_Chinese_Retail_Market.pdf

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