Ever wondered about the secret behind the success of Best Buy?
Best Buy is known to supply specialty items from technology to appliances in stores across the globe. It is common knowledge that the company never openly made a mission and vision statement; however, the company website states, “Our purpose is to enrich lives through technology.”
So, let’s undertake an in-depth Best Buy Mission and Vision Statement Analysis to see what they’re all about.
Table of Contents
3 Core Values
- Environmental sustainability
- Social responsibility
- Corporate governance
The Hills are Alive
Richard M. Schulze completed service in the US Air Force at the Minnesota Air National Guard before he started his career as an electronics salesman in the 1960s.
Recognizing the huge demand for electronics, he took a chance on opening his own store with starting capital from a second mortgage to his home and an unnamed business partner in 1966. This is how his shop “Sound of Music” in Saint Paul came to be.
Becoming a household name…
The shop specialized in stereo equipment and other electronics and performed very well in its first year. The majority of its customers were teenage boys, of course. The success of the shop led to Schulze being able to acquire Kencraft Hi-Fi Company and Bergo Company into the fold.
Although the business had over $1 million in revenue, the profit margins only raised $58 000. However, the store offered affordable products to its customers, and soon Sound of Music was a household name. Schulze was able to buy out his partner fairly quickly. Over the next two decades, Sound of Music expanded and opened nine branches in Minnesota.
The Rebirth of Best Buy
A tornado in Roseville caused massive damage to one of the store locations in 1981, resulting in the destruction of the store’s showroom. Luckily, the storeroom was left unscathed.
Schultz acted quickly to recover costs by launching the “Tornado Sale” in the parking lot, using the tagline “Best Buys” in all of the marketing materials and labeling. This massive sale generated more sales in four days than what was sold on average during a month.
What’s in a name?
With regenerated profits and a new lease on life, the business was aptly renamed in 1983 after the tagline: Best Buy Company, Inc. This allowed the chain to expand beyond sound equipment, as it offered home appliances and electronics that were more appealing to adult demographics.
The first Best Buy superstore opened in Burnsville and offered hundreds, if not thousands of products at lower prices, mimicking the famous Tornado sale. This store would go on to earn higher profits than all the other smaller stores combined. Soon after, the public was able to buy Best Buy shares on the New York Stock Exchange.
A new concept store was opened in 1989, called “Concept II.” This minimalistic moniker reflected Schulze’s “back to basics” approach. Concept II featured a more refined look, with elegant displays and fewer sales staff.
As sales staff for these stores earned no commission, there was no pressure to make sales, and shoppers could peruse items without hindrance.
Shop at your own leisure…
Suppliers were upset at first and withdrew their product lines; however, customers enjoyed the experience more and felt better about spending their money on their own terms. This led to a steady incline in revenue, and suppliers quickly returned after realizing their mistake.
As the company reached $1 billion in annual revenues by the 1990s, Best Buy introduced “Concept III,” larger stores with more to offer. Product demonstration areas and interactive touch screen kiosks were a hit among staff and customers.
When Best Buy expanded to New England, “Concept IV” stores were launched. This concept included cash registers throughout the store, as it helped to spread staff evenly and cut down queue lines.
Worldwide in the early 2000s
The success led to Best Buy forming an independent music label and action-sports video distribution company called Redline Entertainment in the early 2000s.
In addition, the company acquired numerous entertainment and IT service companies such as Musicland Stores Corporation, Future Shop Ltd, Napster, The Carphone Warehouse, and Speakeasy, which expanded their reach from all over the US to Canada, England, Puerto Rico, Mexico, and Turkey.
Moving into modern technology…
The chain had more than 600 stores by 2003 and opened a global sourcing office in Shanghai to cut distribution costs. Best Buy went on to buy out the majority interest of a Chinese appliance retailer and thus had stakes in over 190 stores across China in 2006. The next year, the first Best Buy-branded shop was opened in Shanghai.
Best Buy became the first third-party retailer to stock the Apple iPhone in 2008 and offered a video streaming service by 2009. This allowed customers to watch movies on demand.
Scandal in the 2010s
Best Buy Europe was established and led to 2500 mobile phone shops throughout Europe under the umbrella of The Carphone Warehouse in 2011. As Best Buy merged operations with Jiangsu Five Star, the Best Buy stores were closed in favor of Jiangsu branding.
Schulze stepped down as a chairman temporarily in 2012 after it became known that the CEO, Brian Dunn had an affair with an employee, and Schulze failed to report it to the board. However, as a 20% stakeholder, he soon returned to his seat.
Going back to the drawing board…
Dunn walked away with a $6.6 million payout, and the company had a dent in sales for some time after the scandal. In an attempt to remedy the decline in revenue, Best Buy went back to the drawing board and introduced the “Connected Store” concept to bring forth the “store-within-a-store.”
In an effort to refocus its brand to its original markets, Best Buy sold its shares of Best Buy Europe back to Carphone Warehouse for almost $800 million. As Schulze reached retirement age, he is now regarded as chairman emeritus, with Brad Anderson as well as Al Lenzmeier serving as his representatives.
The Best Buy journey is a wild one, but today the company still operates domestically and internationally, with territories in all the countries beforementioned.
Corrie Barry, the company’s first female CEO, stepped into her role in 2019. Once the pandemic hit, Barry acted quickly to counter the financial devastation, so many companies faced. Employees were sent to work at home, and customers were able to order their shopping online.
Quick thinking was key!
Furthermore, a strategy to produce a “drive-through” pick-up system was implemented. Customers would not have to enter the store to collect the items that they ordered.
The company stocked up on all the items that would be needed for customers to work in home office spaces, and their Geek Squad IT services boomed. This ensured that the company would persevere throughout the pandemic.
|Industries served||Specialty Retailers|
|Geographic areas served||USA (main), worldwide|
|Current CEO (2022)||Corrie Barry|
|Revenue||$43,3 billion (domestic revenue)|
As mentioned, the company has not released a public statement on its vision and mission. They only explained that they enrich lives through technology. This is done by “leveraging our unique combination of tech expertise and human touch to meet our customers’ everyday needs.” Since they aim to reach customers globally, it would be safe to assume that the vision would include reaching all the far corners of the earth.
The Core Values
The company aims to reach carbon neutrality by 2040. They have launched an “e-waste recycling” program to reduce landfill waste as a result of discarded technology. Best Buy also promotes the use of eco-friendly items with the idea of reducing carbon emissions by customers by 20%.
The company has made impressive strides in securing a diverse workforce, which is inclusive of people of color and the LGBTQ+ community, and investing in teenagers from lower socio-economic backgrounds.
Best Buy adheres to strict codes of conduct and corporate governance. They actively work with political decision-makers on issues that affect their communities and customers.
Of course, the iconic tagline “Best Buys” turned into the company name and could not be the slogan anymore. Thus, the slogan “Expert service. Unbeatable price.” became the new slogan.
Retail Is All About The Sales!
If you’re looking to apply today, check out my Best Buy Application and Best Buy Interview Questions, or perhaps you’re wondering Can Teens Work At Best Buy, and for the tech lovers, my Best Technology Companies. If you have a criminal record, please read Does Best Buy Hire Felons before moving forward.
Next, take a look at our Sales Associate Job Description and Sales Associate Interview Questions, as well as our Store Associate Job Description and Sales And Marketing Manager Job Description, to understand the positions better, and finally, our Top Highest Paying Retail Jobs for alternative job ideas.
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