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Best Buy Competition Is Everywhere |
By:
Lane Klein |
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Best Buy Company is a leading electronics dealing company. Naturally it will be competing with other electronics companies. But the problem with best buy is that company can be described in so many other ways. Suppose we call it as a computer company, then its competitors will be computer companies. As best buy deals in lot many types of products it faces competition in different segments from different companies.
Best Buy Company is a consumer electronics store company. Best buy competition in this segment will be from two types of companies. There will be small specialized electronics stores trying to compete with the giant. There will be other similar giant electronics consumer stores chains trying to compete with best buy. The demand in this sector depends on the purchasing power of the consumers. Do the consumers have excess of disposable income to buy this type of non essential goods? If yes, then there is demand for consumer electronics goods. Best buy competition can make more money in that case. Presently the competition in this sector between best buy and other retail stores chain is so intense that it is not possible for best buy or for best buy competition to save the extra margins for themselves. The net result is best buy and best buy competition have to pass on savings to the consumer. As the result of this intense competition, the prices of consumer electronics goods actually got reduced in 2007 as compared to the prices a year before.
The audio products were 5.6% cheaper. The video cassettes & discs were 6.6 % cheaper. The drop of prices in audio discs was 1.6%. All this was possible because all giants like best buy and best buy competition had to pass on margins saved to consumers.
As consumers in USA had more disposable income and affordable prices of the goods there was a total 35 growth of this industry as a whole. In Canada the growth in total sales in this industry was 11%.
If the economy takes the down turn, then it is not possible for the consumers to have more disposable income. In that case best buy and best buy competition is forced to pass on more margins to consumers to spur the demand. If productivity increases, the benefit accruing in the process has to be passed on to the consumer.
Generally speaking this industry is supposed to grow at the compound rate of 6.5 % up to 2012.
Best buy competition depends upon the efficiency of small specialized stores. These small companies can effectively compete with best buy by using specialty as their chosen weapon. The warehouse clubs can be in best buy competition.
Similarly, specialty stores, mass merchandisers, from internet, and department stores can be in best buy competition.
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Article Source: http://www.friendsofvista.org/articles/article25552.html |
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