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BEST BUY AND DUAL BRANDING STRATEGY

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Silent Wind

on 23 November 2012

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Transcript of BEST BUY AND DUAL BRANDING STRATEGY

TEAM 7B BEST BUY AND DUAL-BRANDING STRATEGY IN CHINA Dual branding strategy of BB – the successful in Canada Solution – Action plan What is Best-Buy? Part 1: The particular traits of Dual Branding strategy
Part 2: Dual Branding – Globalization branding ambitious and the successful in Canada Entry to China – Will Dual branding strategy
succeceed again? - Advantages
- Market in China
- Challenges
=> Decision Part1: Swot
Part 2: Solution and Action plan - Best buy, an international company with headquarters in Mineapolis, US, was established by Richard Schulze in 1966.
- In 1983, the chain Sound of Music move into mass merchandising by switching to a superstore Since 2006, Best buy had became the biggest retailer
of consumer electronics in US

-The company had more than 20% share of retail American consumer electronics market.
- The main segment is male, aged 15 to 39, highly average income and eager for products and services.
-Best buy was buiding its brand promise on those very lines: “being fun, honest, young and techno savvy”. -In 1990s, Best Buy established a standard operating platform (SOP) Then, by early 2000, Best Buy was evolving from being an organization thriving on standardization to one offering, within a standard format, different value propositions appealing to different groups of customers.It was called centricity which was based on 4 elements. Part 1: The particular traits of Dual Branding strategy -acquisition but not merged
-Both of the brands compete against each other and occupy two different markets.
-At outlook, two both of the brands seem like as competitors to of each other. Internally, they are collaborate Part 2: Dual Branding – Globalization branding ambitions and the success in Canada In Jan 2002, Best buy chose Canada to extend its market, Best buy’s strategy to let two of brands run together, boost competitive advantages of each brand to expand the consumer electronics market share in Canada. Overall:
Best buy had achieved a combined market share in Canada of 34%.
In 2006, Sales revenue of both brands constantly increased to $ 30,848 milion from $ 17, 711 milion ( 2002)
Net profit also climbed up to $ 7, 726 milion ( 2006) from $ 3, 770 milion ( 2002) Challenges:
Cannibalization
Reduce the influence of the advertisement
•The overload of working of the headquarters Opportunities:
Future Shop was the leader of CE market with 15% share.
In Canada, there are less competitors than US market share.
Canada was a potential market growth.
There are 8 available immovable stores of Best buy in Canada.
Future shop were developing as building a well known brand in Canada. Increase market share in 3rd tier cities
Increase the resource management in FIVE STAR Take the advantage of rich resources in China to reduce the price
Combine the Canadian and Chinese administration strategy
Focus on advertisement to make BB well-know Use the credit policy with low interest rate Use Chinese staff except for in some vital positions
Use the sensitivity in price as an advantage to make BB more familiar
Optimize the cash flow
Use derivative contracts FIVE STAR isvery popular in China

FIVE STAR is the 3rd biggest retailer in China

Rich resources of FIVE STAR BB is still a new brand in China
High prices
Differences of administration
The relationship between BB and local suppliers is not close enough. Growing market in 3rd tier cities
Population is very high
Techno savvy population
The market growth
The rich resources of China National pride
Customers are not accustomed to the concept of credit card
Consumer’s sensitivity in price
Local competitors
High competition of price
Exchange rate risk
Land is expensive in China More over, the company is holding fontanelle the leading position in the American market, but has no experience in the Asian market where culture and market structures are diffirent.
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