Operations Management and the Demise of Best Buy Essay

BEST BUYThis project leave al star discuss the document methods, node service, and over exclusively(a) trading operations of exceed secure and how through better operations centering the comp some(prenominal) groundwork be operated. We will aim ideals from the textual matter book, class discussion and group discussion. We will as hale consult with deal out journals and internet articles.Overview outstrip defile was founded in 1996 in Richfield, Minnesota by Ric sticky Schulze as an electronic specialty line. The family has gained 19% of the consumer electronics sales market. vanquish taint operates over 1150 stores worldwide and has several different brands and subsidiaries including Geek Squad, Magnolia sound video and outperform express. beat purchase has generated over 40 meg dollars in revenues in North America, 3 billion in europium and 1.5 billion in China. trump out secure controld great revenues when its contend Circuit city went out of affair an d did in truth well up until the economic d averturn of 2008 and 2009.Problems and current situationThe smart set continues take hold to necessitate fierce competition from Verizon, ATT, apple Wal-Mart and most importantly Amazon. The completion for clients is only subscribeting fiercer with the online sellers a identical Amazon continues to take more(prenominal) and more market sh atomic number 18 a mode room scoop out profane.Downfall of trounce demoraliseWhy is outmatch taint going out of bloodline now?In one sense better subvert is its own worst enemy there has been number of issues with better buy. Some of the state issues argon1. Poor growth knowledge and lack of return availabilityFor example at the beginning of the semester I wanted to buy a new laptop computer. I went to the high hat barter for closest to the school and I knew what I wanted and how overmuch I was willing to pay. I had research the silk hat pervert website and found itonline u nless did non cast period or patience to wait. So I went to the store and they did non control the laptop I wanted. I found a similar laptop that performed just as well exclusively its non what I wanted.2. Higher prices beat out Buy cannot compete on price any unyieldinger and the guests know this full and well. For example if you found the attest engineering science gadget in outmatch buy for 100 dollars and online for 75 dollars, where would you buy all thing being equal. Of the answer is you would buy it online. Especially if its a development you are familiar with. This only makes trump out Buys deliver rooming trouble even worse.3. Poor Customer satisfactionSatisfying a client is a major key to make argument, but beat out buy seems loosing this key. Some recent surveys show that ruff Buy has been doing its outstrip to leave the troops unhappy. Major grammatical constituents for this are the juicyer prices, poor customer service, and lack to enrolment cou n selling. In this era of Cut-Throat Competition, Best buy is losing its get by in the electronic market. Corporation like Amazon, eBay are spreading its affair very fast leaving no scope of mistake for its competitors. Best buy has lacks ware for display in there show rooms, says my private experience. Entering the stores and un subject to spot the latest products of high end American brands like apple, doesnt impress anyone. Specially, when you have the access to all grade of electronic product on websites like Amazon that too with all kind of technical details.Best Buy need to progress its inventory direction so as to display and deliver products to their customers on term. direction the blunders where company made apologies to thousands of customers for not delivering products for Christmas which were differentiates on thanks giving, Best buys reputation is in jeopardy Another trouble which Best Buy is facing is it is unable to provide a salve root delivery unlike A mazon and EBay. Also these online websites provides facilities like picking the product from the customers push through if the customer wishes to return the order. This has deprived Best Buy from a huge crowd to potential customers. There is a severe need that best buy should make some strategies to develop a system of free home delivery. One more factor which bothers most to a lay man is paying high prices.Best Buy moldiness work out some plans to compete online websites and also some emerging electronic store which intend to sellproducts throwing low margin money. Serving the customer in better way seems like a past policy of Best Buy. When a companys customer experience starts to drop, its time to sell the store. Im afraid that may have reached at Best Buy, specially when I look at their new customer satisfaction surveys. Moments when the customer representative have no clue to the technical aspect of the product has deform common. May be some training sessions for the CR s may come out fruitful. Dominant trends are consistently conspiring against their business model Best Buy must accept this fact.Out of which buy products from your house sitting on a couch, inte eases every customer. Moreover the forward-looking high graphic design and sophisticated virtual display of product is making things work better for online sellers and buyers but a hard monstrosity for companies like best buy. Best buy has been trying aggressively to flesh out its market in places like UK, China and may be, this has led Best Buy to get distracted from its home ground of performance. Seems like its high time for Best buy to re-engineer its business module and work hard on customer satisfaction sector.(Sources American Customer Satisfaction major function and Devils Advocate Group analysis) Many store tenseness on customer service, but Best Buy does not interest. gibe to http//www.reseller evaluates.com/store/Best_Buy Best Buy one of the lowest customer rating on cus tomer service. I myself had a bad experience when I bought a Dell laptop on Best Buy online. The laptop will crash (blue screen) when I use more than 30 minutes. First, I thought the software I tried to find the problem, but not found anything. When it crashed too many times, I decided to restore the Windows. It electrostatic crashed wherefore I decided to exchange the laptop at Best Buy Saugus (close to my house). I met a lady there then explained the problem. by and by that she took my laptop to test. When she came back she refused to accept laptop return.She told me there was nothing ill-timed on that laptop. I told her I cannot use that laptop it crashed if I use more than 30 minutes. I had used that laptop for 5 geezerhood and the return policy is 15 days (now change to 30 days), so I can exchange. She replied if I want to return and exchange I have to pay 15 percent restocking fees. I asked her why, she replied because I returned a bully laptop. I kept explaining her abo ut the laptop problem, but she did not listen to me then she called another customer Next customer. I was veryangry.4. Lack of Employees Knowledge and the use of technology Best Buy has adapted number of employees to serve the crowd of customers. Majority of the best buys employee does not have the best convincing power at first glance. They employees do not have sufficient knowledge about the product and are not updated with the updating of technology. From my personal experience I found that some of the employees do not have sufficient knowledge about the products. I went there to buy an Apple mackintosh Book Pro. I had used apple products since a long time so I asked them some technical queries. And out of my 7 queries they were able to solve only 4 of my queries, and on asking about the rest they replied me that we are extremely sorry but we do not have an answer for this.Then I went to apple store and placed the uniform 7 queries on their desk and I got the solution for all m y 7 queries. The surgical incision also faces problems of over stock and out of stock of materials. Best buy is also not updated with the technology of automatic request of placing orders. There are problems when the materials go out of stock and the customer is in need to that finical material only. Being a competitive world the customer wint wait for couple of days to get that material from best buy instead would go to any other store and get that material.These problems can be solved if technologies are used to a good extent. Comparing Wal-Mart and best buy Wal-Mart uses an automatic re-order technique for all its materials. For example 100 counts of chips are ordered and the details are placed in their database. As the counts of the chips from their database go below 30 the system automatic places a re-order of 100 counts of chips. Using this way they never face an over stock and out of stock problems. The database is up to date with the latest entries of the inventories.5. In ventory cookmentOn the management side of the company it has big problems with its inventory management as well as its allowance policy. Best buy was very slow to enter the online market and has not done well in making its website very good. The company inventory system should change to a more perpetual inventory similar to Wal-Mart. And it should have a compensation system based on good sales as well as good service. A better Human resource policy based on production would better serve the company. The company mustalso find a way to capture the customer in the store and not has the customer use the store as testing center to later buy over the internet. The company has failed to make this happen better sales training as well as customer service training could offset this. Additionally Best has got to rid of selling DVDs, and CDs.They are taking up way to much space in the stores and they are selling fast enough due(p) to them being obsolete. The company has tried to change this buy opening Best Buy mobile stores in shopping malls similar to cell think providers. This has reduced personify associated with operating the big box store that best buy has been known for. This also reduces square footage to help in making the company more profitable. If they can continue to use this placement dodge they might be able to save the company. All in all this improvements may help the company in the short term. In the long term Amazon will prevail and put Best Buy out of business.6. Online- a bad decisionNowadays, the numbers of customers shopping online increase significantly. It is more convenience save time and money. Many retailers are centering on Online shopping including Best Buy, Wal-Mart, Target, Sear, Home Depot, Loews, Amazon, Newegg, and so on. Many Online stores do much better than Best Buy. Best Buy Online has many weaknesses including tape drive fees, price management, inventory management, and customer service. Best Buy does not care much about shi pping fees. The shipping fees is too expensive if equality to other stores. For example, If I want to buy Number Hunt (baby toy), it cost $10.50, plus shipping $6.14, and plus tax $0.65. Total cost would be $10.50 + $6.14 + $0.65 = $17.29 If I buy lead Number Hunt, Best Buy will charge the shipping fee three times ($6.14 x 3 = $18.42).The total for three Number Hunt would be $51.87. If I buy from Amazon it cost $9.99 plus $4.99 shipping. Total $9.99 + $4.99 = $14.98. If I buy three Number Hunt, Amazon will not charge shipping free because the total over $25.00. The total for three Number Hunt would be $9.99 x 3 = $29.97. This example ( $51.87 VS $29.97) show me that Best Buy online store cannot compete with big online stores like Amazon.com or Newegg.com at all. Best Buy should talk to shipping companies to get the same shipping deal like Amazon or Newegg otherwise Best Buy will become a showroom. Another problem, Best Buy Onlinehas to compete with other retail store like Wal-Mart, Target, Sear, Kmart, Home depot, Loews and so on. The small stuff like toy customers most likely would buy from Walmart.com, because the price always cheaper than Best Buy and Wal-Mart charge flat rate shipping. It means whether customers buy one or five decimal points they pay the shipping for the first item only.milk whey Best Buy charge every single item? Best Buy has price match policy to compete with other stores, but the policy does not work on Best Buy Online. Best Buy has small AT&T in side and an Apple retail store. If customers want to buy I-phone 5 in store, Best Buy will sell to contract customers only. On other hand, customer can buy an I-Phone 5 without contract on Best Buy Online. It costs $699.00 ($50 more expensive that Apple Store). Why Best Buy sell $50 more expensive than Apple store? On customer point of view, it does not make any scene to buy an I-Phone 5 without contract form Best Buy Online at all. That problem make customers decide to shop at Apple directly or else than via Best Buy Apple store. Best Buy Online does not have a good inventory management to manage the inventory. Many customers could not receive what they order, because Best Buy Online does not have in their store to ship. Here a quote from resellerratings.com awful.Service was bad, rude, and nasty. Didnt have the product I wanted and told me they did. I had to wait 2 weeks to get it. I called and they said, there was nothing they could do. The entire district was out. That is awful inventory management to let 15 stores go out of a product. Will not be shopping here again Sometimes there are plenty order items in the local Best Buy Store, but Best Buy local stores could not ship the item that was order on Best Buy Online. It is not a good business practices. Best Buy should allow local store to ship the item if Best Buy Online warehouse travel by out of stock to keep the customers happy and get the item that they ordered. Another alternative solution, Best Buy could a dopt just on time inventory management to manage the inventory.If Best Buy wants to survive and be a best place to buy electronic product online, they should implement the shipping fees, price management, inventory management, and customer service. Best Buy Online has lost many customers. If the customers keep leaving Best Buy Online like that Best Buy Online would be out of business like Circuit City. It is not too late, but the execution should take an action before long.ConclusionIn conclusion we rule that Best Buy would have to make a huge investment in operations management, training, inventory management and customer service to turn rough the company. We feel collectively the end of Best buy is coming soon due to the above factors and more importantly the online retailers. Because of the deficiencies in Best Buy the company will not be able to recover from its flaws. We feel that the consumer will continue to use the Best Buy for showroom purposes and then buy online. The investment in time and dollars needed to change the company will not be worth it in the long runReferenceswww.amazon.comwww.newegg.comwww.walmart.comhttp//www.resellerratings.com/store/Best_Buywww.bestbuy.comwww.seekingalpha.comhttp//www.customerthink.comhttp//minnesota.cbslocal.com/2012/01/18/best-buyhttp//www.heartofthecustomer.comhttp//storefrontbacktalk.com/e-commerce