Question

how would you characterize Best Buys competitive strategy? should it be classified as a low cost strategy? a differentiation strategy? a best cost strategy? also, had the company chosen to focus on a narrow piece of the market, or does it appear to pursue a broad market approach? explain your answer.

Answer 1

Best Buy's competitive strategy blends differentiation with a focus on best-cost, emphasizing customer service, expertise, and a quality shopping experience, all while maintaining competitive prices. The firm targets a broad market in the electronics and technology sector with aggressive competition and innovation.

Step-by-step explanation:

Best Buy's competitive strategy can be characterized as a mixture of differentiation and best-cost strategies. Rather than competing primarily on price, Best Buy differentiates itself through its customer service, expertise, and the shopping experience it provides in stores and online. However, it also aims to offer competitive pricing, which aligns with a best-cost strategy. The company pursues a broad market approach by catering to a wide range of customers seeking various electronics and technology products.

Evidence of serious competition in an industry includes aggressive marketing, price wars, and rapid innovation. Competitive industries include technology and consumer electronics, where firms are continually trying to outdo each other on features and pricing. Predatory pricing is risky and often scrutinized by regulators, but in some cases, companies have used it to dominate a market temporarily. When entering a market with high barriers to entry, such as web browsers, a firm must innovate, leverage partnerships, or offer unique features to differentiate itself and gain a foothold.