Case Study: Best Buy's Business Model

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Best Buy uses a business model that does not distinguish between different segments and they will mainly focus on one large group of customers with broadly similar needs and problems, in this case involving technology. Per our textbook, Business Model Generation, “This type of business model is often found in the consumer electronics sector” (Osterwalder and Pigneur 21). “Best Buy has become one of the biggest consumer electronics retailers in the world” (Wilson, “Statistics and facts on Best Buy”). Therefore, since the mass market customer segment is often used in consumer electronics sector, Best Buy must use this sector.
Value Propositions
Cost reduction: Best Buy offers price match guarantees to offer the lowest possible prices for their
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In this case, Best Buy’s Geek Squad plays a major role in their business. “Over 20,000 Geek Squad Agents are ready to help you online, on the phone, in your home, and at more than 1,100 Best Buy stores” (“Geek Squad Protection-Best Buy”). Customers rely heavily upon them to answer their questions and fix their problems, making human resources a key resource for Best Buy’s business model.
Key Activities
• Problem solving: This key activity is coming up with new solutions to individual customer problems (Osterwalder and Pigneur 37). Best Buy’s key activity is problem solving. Best Buy’s “Geek Squad” provides reliable information and help for customers that are having trouble with their products. “Geek Squad” will help you set up your device, remove viruses from your computers, fix a slowly running device, and tune up your devices to keep them running effectively and efficiently (“Geek Squad 24/7 Support”).
Key
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Best Buy’s values their store around offering low and affordable costs. Best Buy offers deals every day that our different and guarantees a price match if another competitor has a lower price on a product than them, to keep their costs as low as possible for their customers. A fixed cost is a cost that will remain the same despite the amount of goods or service you purchase (Osterwalder and Pigneur 41). For example, if you buy one TV or 5 TVs at Best Buy, they will all cost you the same amount regardless, making it a fixed cost. On the other hand, Best Buy also has variable costs on some products. A variable cost is a cost that will vary depending on how much you use the good or service (Osterwalder and Pigneur 41). An example of a variable cost at Best Buy would be their phone service. Depending on how much the customer uses their phone, the price will change, making it a variable

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