Best Buy Co., Inc.

Darden Business Publishing Cases

ISSN: 2474-7890

Publication date: 20 January 2017

Abstract

In 2007, Best Buy was the leading electronics retailer in the United States with more than 941 stores, revenue totaling $31 billion, and a market cap of $21 billion. In 2005, Best Buy had adopted a new business model, culture, and customer-segmentation template called Customer Centricity. This move created volatility in the price of Best Buy stock because of the higher-than-expected employee costs that went with this new way of doing business and the difficulty of executing the old and the new business models simultaneously while the new model was rolled out. Best Buy responded to Wall Street's short-term focus in a myriad of ways. It first asked for investor patience, and stressed the strong operating results achieved in Best Buy stores operating under the new model. But in June 2007, after the stock dropped again, the CEO knew he had to decide whether to open more Best Buy stores, increase the company's dividend, or increase the stock-repurchase program.

Keywords

Citation

Hess, E. (2017), "Best Buy Co., Inc.", Darden Business Publishing Cases. https://doi.org/10.1108/case.darden.2016.000040

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Publisher

:

University of Virginia Darden School Foundation

Copyright © 2007 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

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