Final answer:
Best Buy faces significant competitive challenges that extend beyond compensation strategy, including alternatives like Amazon, often chosen for better pricing and convenience. Market structures and consumer incentive changes, such as price and quality, affect purchasing decisions and can lead to traditional retailers struggling against online competitors.
Step-by-step explanation:
There are indeed larger problems in the competitive landscape for Best Buy that cannot be solved by compensation strategy changes alone. Customers, when looking to buy electronics, have several alternatives to Best Buy such as Amazon, Walmart, and specialized electronics stores, which often offer competitive pricing, convenience of online shopping, and a wide variety of products. These retailers have changed consumer behavior, as people often choose to "test drive" products in physical stores but make their purchases online where they find better deals and more options.
Changing Best Buy's compensation strategy may not fully address these challenges, as the issue is rooted in broader market shifts. Market structures also affect consumer choices. In a competitive market, incentives for these choices include product price, quality, and shopping convenience. If any of these incentives change, such as pricing becoming more competitive due to a sale, it could influence consumer behavior significantly. As the case study of Amazon demonstrates, competition from firms with better or cheaper products can significantly impact the success of other businesses. While consumers may benefit from more options and lower prices, traditional retailers may struggle to maintain profitability.