Mission: To become the largest consumer electronic

External environment analysis

Countries that they are in: China, Canada, Europe, USA

Political/Legal:
Opportunities:
Political stability.
Government support technology and innovation in businesses

Threats:
Pg4. Sales tax.
Change in regulation/tax level (e.g increase in corporate tax, sales, tax,
import/export tax)
Legislation forcing them to have brick and motar store so that can tax
them
Government would rather support local brands.

Economic:
Opportunities:
Increase in countrys wealth
Threats:
Economic downturn/Recession
Overheating (Too many people in the business)

When a prolonged period of good economic growth and activity causes
high levels of inflation (from increased consumer wealth) and
inefficient supply allocations as producers overproduce and create
excess production capacity in an attempt to capitalize on the high
levels of wealth. Unfortunately, these inefficiencies and inflation will
eventually hinder the economy's growth and cause a recession.

Social:
Opportunities:
Change in preference (lifestyle)
Threats:
Increase in online shopping (bricks and mortar obsolete)


Technological:
Opportunities:
Change in technology = increase in products= more returning customers
Technological advancement will help to improve the business process=
cost savings. Streamline value chain
Enhance customer experience
Threats:
Integration of functions (e.g Camera, Word doc..= do not need various
products)
Change in technology/destructive technology (way they sell) Make
previous technology obsolete
Too rapid change in technology


Porters 5 forces (Forces Driving Industry Competition)


Bargaining power of suppliers (high)
- Lack of availability of substitute products. (5 main suppliers which makes
up 40%) (high dependency)
- Suppliers not dependent on industry firms because they can sell
themselves (low)
- High threat of suppliers integrating forward e.g Apple

Bargaining power of buyers (Moderate/High)
- Low switching cost (Can switch to other players. E.g Amazon)
- Buyer group price sensitive (high)
- Buyer group not concentrated= more on retail= unable to force prices
down
- Low threat of buyer integrating backward

Threat of new entrants (LOW)
- High barrier to entry (Capital requirements)
- High expected retaliation from Incumbents (e.g Price war)

Threat of substitute products (LOW)

Intensity of Rivalry (High)
- High number of competitiors
- High fixed cost
- Products not differentiated


Overall: Unattractive Industry

Competitor Analysis:


Strategy (outpacing)


Resources
Organizational Capabilities: Understand the needs of customers



Support activities
HR management
Add Value: Training (extensive knowledge, improve service to customers)

Outsource

1. Core competencies:
Wide Range of Products (Customer responsiveness)
Strong Brand Recognition
Customer-centric Strategy

2. Competitive Advantage: Customer responsiveness and Efficiency

3. Sustaining Competitive Advantage:

Customer responsiveness
Valuable: Yes
Rare: No
Imitable: yes. Not costly to imitate
Organiational Fit: Yes

=Not Sustainable, Competive Parity, Average returns

Efficiency
Value: Yes
Rare: No
Costly-to-imitate: Yes (Need to streamline) Not imiitable
Organiational Fit: Yes

Temporary CA= Above Average to Average retuns.

4. Strategy: Outpacing (Integrated)
5. Value Creation (Value Chain)


Key Success Factor
-After sale service
-Variety of products
-Competitive Pricing
-Up-to-date technology (Latest Products)
-Quickly adjust inventory 3to meet demand
-Good supplier relationship (able to attain conomies of scale)


Follow Home Depot

- Strategy: Now in Growth strategy (seek for new core competency)
(Recommendation: Risk Diversification strategy)
- Ansoff Growth Matrix- aiming for market penetration strategy (drop
price, tapping into online market more aggresively, achieve EOS)


BCG Portfolio Concept
Brick and mortar (dog..becoming more obsolete)
Online- in between question mark and star.. barely reaching star
Geek squad- Falling Star
Best buy mobile: Cash cow
Carphone: Star (has geek squad)
Five Star Appliances: star


Low local responsiveness
Need for global integration (High) value chain all across the world
= Global strategy but is trying to move to transnational market.


Entry Mode (Possible)
-Joint Venture with a supermarket (high market complexity, low product
diversity)


Acquisitions successful?
Reason for acquiring companies?

What attributes successful acquisitions have:
-Acquire related firms
-organizational fit?

Identify strategic alliance (2 different entities) Vertical (distribution)
1. Radioshack (niche area) Different segment. Gain market share. Radio
Shack wants our brand name.
2. Outsourcing arrangements (Work with amazon..let them distribute online
sales) Amazon gains from the sales commission.


Strategic Leadership
1. Strategic direction: must set up whether they want cost, differentiation,
outpacing.
2. Balance Score Card

Organizational Structure
Worldwide Matrix Structure (longer decision making)

Corporate Governance
Founder remains of Chairman.. feel pressured not to change strategy.
Heterogeneous board of directors
Best buys ownership made up of 65% instituitionalpg 11