Best Buy Case Study Essay

subsequently acquiring a stake in Five Star, a retail merchant of appliances and electronics in China, crush spoils VP John Noble is responsible for(p) for launching a dual leaf blade outline to China as he did in Canada back in 2002. The plan was to open cardinal stores in slight than ii years in China dapple Five Star was planning on opening 25 special stores. Entering China would prove to be a great deal more effortful than neighboring Canada as a coun demonstrate with 1. 3 billion consumers which is a lot of deal to please.China was elect as the second outside(a) expansion market primarily payable to the overall market opportunity, consumer basic principle and macro-economic factors (Ivey, 2006). In addition to the Chinese being in truth frugal, on that point was as well the issue of the concept of credit, or lack in that respect of in China. round four percent of households in China used credit cards, compared to 75 percent in the linked States (Ivey, 200 6). better(p) Buy quickly completed that stigmatisation in China was not what really attracted the consumers (Ivey, 2006). Best Buy Inc Best Buy had been interested in entering China since the 1990s.By that time, China had been hosting many of the United States and Europe as far as different manufacturing products. The option of dual branding was what Best Buy was idea in order to essentially join forces with Chinas retailer of electronics and appliances, Five Star. By coming together, Best Buy in United States thought that the two companies would be even stronger as hotshot. This sort of dual branding worked very well in Canada and presumably would have the same success in China. Competitors Some of the main competitors of Best Buy are Wal-mart and Costco.The competitors were constantly increase their CE retail market and in particular they increased the products that were less complex at that placefore easier to sell. Internet shopping and distributors such as amazon or sit es like that are an other example of a competitor in the CE market. Also, home improvement stores such as sept Depot and Lowes were also venturing into unknown territory which was competition for Best Buy. Lines were blurring as retailers of all kinds were widening their product assortments in pursuit of revenues and margins (Ivey, 2006). triple branding in Canada seemed like logical step in that Best Buy and Canadas prox Shop, the main CE retailer there could join together and become stronger with all of the competition coming about (Ivey, 2006). Dual Branding Canada Canada was paid $363. 95 million dollars to acquire forthcoming Shop. Among several reason why the dual branding took place, the number one reason and most important was that Future Shop was an established brand with over 95 percent unaided brand awareness among Canadians (Ivey, 2006). though dual branding seemed like a great idea there were also some downsides.Cannibalization was the main problem of course imput able to the products of Future Store eating the profits of Best Buy and vice versa. in that location was also the immanent issue that the consumer would not know which brand was which. scorn these issues, by the first year of operations the dual branding strategy seemed to be working and cannibalization seemed minimal. It seemed only natural to give it a try in China (Ivey, 2006). Dual Branding China China was chosen as the second international expansion market primarily due to the overall market opportunity, consumer fundamentals and macro-economic factors (Ivey, 2006).However the Chinese consumer was different than that of the United States or Canada. Also, consumers were not really concerned with branding as lots as they were messages relating to functional features. Therefore, the preference of brand did not really transubstantiate into revenue. There was also the issue of land acquisition as there were often delays which would force a store to take up to 6 months to even ope n its doors. The Chinese also preferred to deal with people they knew and had previous relationships with so pricing had to be up to par due to the consumer not providing much slack for it.With all of these problems, a dual branding in China did not seem as seamless as it was in Canada (Ivey, 2006). Conclusion It is understandable why Best Buy would urgency to go global to maximize its profit and consumer base all over. though things seemed to work out in Canada, it would prove to be a much tougher hill to climb in China just based take out the consumers alone and the charge things are done there and simply the way of life. It will be interesting to see if the places like Turkey and Mexico, other potential targets will have the same success rate as Canada, and not resemble Chinas issues.