Best Buy in China

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Case Details:

Case Code : BSTR299
Case Length : 20 Pages
Period : 2003-2008
Pub Date : 2009
Teaching Note :Not Available
Organization : Best Buy Co. Inc. Industry : Electronics / Consumer appliances Retail
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We're trying to understand China in our own way, and offer an entirely different experience."¹

- John Noble, Senior Vice President, CFO, Best Buy International, in 2007.

"[...] a visit to the four-story Best Buy store shows that the Fortune 500 company has brought more than just a new retail outlet to the market. The Best Buy store is revolutionary in the shopping experience it offers."²

- The China Daily³, in 2007.

"Best Buy has little advantage in China over GOME and Suning, who know local consumers better. Best Buy is expanding at a slower pace than major Chinese rivals."⁴

- Xiang Tao, Analyst, TX Investment Consulting Co⁵., in 2008.

Introduction

In September 2008, US-based electronics retailer Best Buy Co. Inc. (Best Buy) reported revenue of US$ 9,801 million and net earnings of US$ 202 million for the quarter ending August 30 that year.

The net earnings had declined by 19% compared to the second quarter of the previous year and the company attributed the decline to increased spending on enhancing its stores in the US and to international expansion. Internationally, the company's revenues for the quarter were at US$ 1.7 billion, a growth of 10% compared to the previous year. But the revenues in China had gone down.

Best Buy in China - Next Page>>

1] Tom Leander, "John Noble, Best Buy International,"www.cfo.com, March 22, 2007.
2] "Keep an Eye on Best Buy,"The China Daily, January 9, 2007. (accessed from www.china.org.cn)
3] The China Daily is the first national English language newspaper in China.
4] "Best Buy China Strategy won't Change after Exec Quit,"www.uk.reuters.com, January 24, 2008.
5] TX Investment Consulting Co. Ltd. is involved in securities investment consulting and open-end funds distribution.

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