Critical Analysis 1 Essay

1146 Words Nov 16th, 2013 5 Pages
Christopher Sanchez
BA 3103
Christopher Monos
Critical Analysis: Best Buy When Best Buy first opened it was an event that an electronics store could hold such a variety of products, have knowledgeable employees, and offer competitive prices at the same time. Although in 2012 it was reported that revenues for Best Buy increased, the company still fell victim to the problems of having a decrease in net income and operating cash flow. “The company reported revenues of (U.S. Dollars) USD 50,705.00 million during the fiscal year ended March 2012, an increase of 1.93% over 2011. The operating profit of the company was USD 1,085.00 million during the fiscal year 2012, a decrease of 54.30% from 2011. The net loss of the company was
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The Internet sales are a smaller portion of Best Buy’s total sales, but it is still a segment that contributed towards profits when there was economic instability. “Best Buy’s online media sites appear to imply that many customers have a negative view of Best Buy's customer service (Passport 6).” Even though historically Internet sales have only made up around 6% of Best Buy’s sales in the United States, this number is supposed to keep steadily growing year by year. This number is on mark to pass the growth rate of the number of sales inside of the actual stores. Best Buy though, is not focusing on catering to these important figures. It is described in the Best Buy in Retail report that customers use the Internet to “research product availability, and look for comparisons in specifications and pricing (13).” Where Best Buy fails is that they are not are not offering any incentives for the customers already using the website in effort to obtain more sales.
Best Buy is also having problems maintaining sufficient liquidity. Having low liquidity as a company is a problem that makes it difficult to perform at full potential. Low liquidity for Best Buy makes it “difficult for the company to meet its short term obligations. During the fiscal year ended 2011, the company’s cash and short term investments reduced to $1,125m, as compared to $1,916m in fiscal 2010…Besides the company’s cash from

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