Best Buy

Best Buy was founded in 1966 by Richard M. Schulze and James Wheeler in St. Paul, Minnesota, under the original name “Sound of Music Store.” This retailing company, offering mainly consumer electronics, and has more than 150,000 employees. The headquarters are in Richfield, Minnesota, and the Best Buy Co. shares are listed on the New York Stock Exchange. Chairman Schulze is still leading the business, which is focused on consumer electronics, home office products, entertainment software, domestic appliances, and related services. Consumer electronics contribute about 41 percent to current sales, home office products about 28 percent, and entertainment software about 19 percent. Domestic appliances and services are less important, accounting for 6 percent of sales each.

Best Buy manages five private label brands: Insignia (personal computers and accessories), Dynex (low-price computers and home entertainment), Init (storage and portability for technical devices), Geek Squad (best known for its 24-hour on-site technical support services, high-end computer accessories, and cables), and Rocketfish (high-end cables primarily used for home theater installations). Products with these private labels are sold exclusively in Best Buy's own retail outlets. The outlets are identified by the light-brown facade and a “blue box” entrance. The logo is a yellow price label with the name Best Buy printed on it in black letters.

Best Buy, whose 1,150 retail outlets are usually the epitome of the “big box” style, has been ranked 12th among U.S. retailers.

Best Buy has successfully acquired other retail chains, such as Audio Visions, Five Star, Future Shop, Magnolia, Pacific Sales, and Speakeasy. The trust currently ranks 23rd in the Fortune Top 100 and is the leading consumer electronics vendor in the United States and Canada. The company ranks 12th in the list of U.S. retailers and accounts for 17 percent of the North American electronics market. The company has generated an impressive performance: Since the 1990s, their revenue has increased faster than that of Microsoft and the dividend per share was higher than that of Intel, Inc. This is remarkable, considering that Best Buy lost almost all of its profits just 10 years ago. In 1997 an expansion strategy resulted in hypergrowth, overextending technical and financial resources as well as management capacity.

To cope with stagnation of turnover in the U.S. retail industry, Best Buy expanded its business to overseas sites. In a total of 1,150 outlets, Best Buy offers goods and services in the United States, Canada, Puerto Rico, Mexico, and Turkey. By the end of 2008, Best Buy hoped to have eight stores operating in China. The first two were opened in Shanghai.

Best Buy is about to expand to the major European markets. The first step is a joint venture with a British mobile phone provider, Carphone Warehouse. In addition to mobile telephony, this joint venture intends to sell various consumer electronics in the 2,400 outlets in the United Kingdom. Carphone Warehouse also provides this joint venture with stores in other European countries, including 240 Phone House outlets in Germany. Thus, Best Buy could become a credible competitor to the German Metro Group, operating two successful consumer electronics chains, Media Markt and Saturn, in various European countries.

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