Best Buy, the $30-billion-a-year company had ruled the US consumer electronics market since 1995. Its presence extended to more than 700 stores in 49 states and it offered video games, music on compact disk, television, DVDs, UMDs, etc. Best Buy accounted for 17% of the consumer electronics market in the USA and Canada. The company had witnessed growth through its technology-enabled supply chain. Due to competition from Wal-Mart and increasing demand from the customers for better service, Best Buy decided to implement a customer-centric technology-enabled supply chain. Would Best Buy succeed in its efforts?
"Our goal is to create a flexible, high-velocity supply chain operating with better product availability for customers at a lower total cost for the company"
In the 1990s, the consumer electronics industry was dominated by players such as Best Buy, Circuit City and RadioShack. These companies managed to achieve success through their technology-enabled supply chain. Best Buy, which had its presence in 49 countries in 2003, offered video games, music on compact disk, television, DVDs and UMDs.
In 2003, Best Buy, No. 1 in the consumer electronic market, witnessed a revenue of $24 bn. With the entry of Wal-Mart into the consumer electronics market, Best Buy's market position was threatened. In addition, it was found that 33% of its customers were dissatisfied with its service. To retain its No. 1 position in the market and to compete with Wal-Mart, Best Buy decided to enhance its supply chain and to adopt DDSN and RFID technologies. But a few analysts opined that competing with Wal-Mart by enhancing its supply chain management system was not going to help Best Buy. |
