Best buy is the leading retailer in consumer electronics in the United States of America, and is on its way to attaining a leading position in the industry round the world. This though doesn’t mean there’s no room for expansion, both the physical store layout, geographical location, and the organizational structure.
Recent years have witnessed a mushrooming of Best Buy store branches in the United States, and even one being setup in China. However, just setting up new branches in its own does not guarantee prosperity. The management had to identify other ways to increase the efficiency and profitability of the company, and that is what led them to make changes in their organizational culture.
In a bid to increase Best Buy’s customer base in 2003, Julie Gilbert launched a concept she referred to as ‘a store within a store’ to cater to individual shopping needs of its customers (Hunt, 2006). The concept was based on the theory of customer centricity, and was aimed at improving customer relations.
The move saw increased customer numbers, especially that of ‘soccer moms’ who wished to enrich their children’s lives with the latest in electronic devices (Brady, 2007). This effort clearly shows that Best Buy’s organizational culture is biased toward the needs of the consumers, i.e. it is market oriented.
The large number of Best Buy stores, however, presented another stumbling block in the form of communication problems. This is what led to the adoption of the current organizational structure- that of a multi-business unit. This is where the internal organization is broken down into sub-units or departments, each with its own specific function/duty.
These departments are then interlinked to form a network which facilitates communication between one another. The lowest level in this network comprises of the store-level employees, who include sales staff, and inventory associates.
The employees at Best Buys are all assigned to a specific department, which is under a department supervisor, who acts as an intermediary between the base-level employees and the management. Similarly, the supervisors are put under assistant managers, who are in turn under a general manager. The management staff report to the District management.
The district management is in charge of monitoring the activities of about twenty stores each. The districts afore mentioned are combined to constitute a region, each of which is placed under a regional manager. Regional managers are the ones who report directly to the corporate staff, which is under the company executives. This is the broad organizational structure of the Best Buy stores.
The above strategies, though effective, are quite costly to develop and implement. So how does Best Buy manage to pull it off? The answer lies in the company’s unorthodox way of doing things. A case in example is the ‘Tornado Sale’-an annual event that was stumbled-upon by the founder Richard M.
Schulze following the tornado that hit one of the original Best Buy stores in 1981. The salvaged merchandise was sold in piles at the wrecked store’s parking lot, and the idea of selling items ‘in a grab and go’ manner, rather than displaying them behind a glass counter was born, courtesy of Richard M. Schulze.
The idea turned out to be a huge success in the future. This combined with the company’s annual income in excess of 45 billion USD (Yahoo Finance, 2009), gives the company a huge competitive advantage over other retail stores such as Wal-Mart who use low pricing of their merchandise to attract customers (Times, 2010).
Works Cited
Brady, D. and McGregor, J. “What Works in Women’s Networks.” Bloomberg Businessweek. (2007): 12-15. Print
Hunt, M. “Best Buy’s Julie Gilbert and the WoLF Pack’s First Footprints.” In Women We Trust. 5 Oct 2006. Web.
Financial Times. “Best Buy See Big Drop in Sales.” Financial times 28 Dec. 2010: 2. Print.