Wednesday, December 2, 2015

Best Buy vs B&H Photo Video: Who has the best strategy?

On the Harvard Business Review Article “Can You Say What Your Strategy Is?”, by David J. Collis and Michael G. Rukstad (April 2008), what stood out the most was hierarchy of company statements and where strategy actually ranks. While the article put mission, values and vision of a company before strategy, we tend to think that the business world functions otherwise.
I can think of many examples of companies who have a specific mission, but end up losing its primary focus of business in a trial to stay alive upon changes. On the other hand, successful businesses have shown us indeed that strategy is composed of an objective, a scope and an advantage that is tightly linked to the company’s mission and values.

I once heard that Amazon’s strategy was going to conquer the world. On we can find their vision as “to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” However, despite their success over the last ten years, we can analyze their impact on the business of electronic retail as a whole. Let’s take Best Buy, for example. What once was America’s retail leader in consumer electronics, by 2012 it was in a complete crisis, with continuous decrease in sales. After the Amazon effect, it became a showroom for lower cost retail models. It was hard to compete with Amazon, it was even harder to compete with Wal-Mart and other big box retailers who focused on low-priced electronics. According to Best Buy’s website, they define themselves as a “leading provider of technology products, services and solutions”. I remember as a kid in the 1990s walking into this gigantic store, full of innovative PCs, TVs, CDs and the recently released DVDs. Now, as I walk into the store, I can’t affirm that they are leaders in the provision of technology products. We can still buy computers, TVs, and a few DVDs over there. We can test and buy a large selection of smart phones. The new, smaller stores in big cities are attracting. But while we go to Best Buy, we can also take care of other products on our groceries list, such as cleaning products and a large selection of snacks. In that I ask, what is their strategy? In a new world of online retail for electronics, what is their advantage? How is this related to their mission and values? Is this sustainable?

Another electronic retail store that was forced to change in the post-Amazon era was B&H Photo Video. I think it is a good example of a change of strategy and yet, a faithfulness to its mission and values. They focused on video and imaging, however, towards professionals and those who want to be more qualified in their photo-taking and editing fields. They have a significant presence online. However, they compete with Amazon by offering the services and experience that an online channel cannot offer. They are beyond retail offering customer education, installations, showrooms. Their sales people are experts in the field, such as photography, for example. Their call center can be reached by many other countries. They will ship your product wherever. They recognized the buying power of emerging countries and they quickly adapted the company to attend them. Whether you reach through online, by the phone or physically at their New York City huge store, you can find a sales person that speaks Portuguese, Russian, French, German, and so on. Their strategy clearly had an objective of being the number one seller in photo and video electronic equipment. Their domain to reach the customer with qualified personnel and a great shopping experience was a highlight. And their advantage to reach out to foreign customers who did not have access to Amazon was the essence to build a strong strategy in this successful business.

So, in conclusion, as we reflect on what the strategy of our company is, we must take a step back and align it with our mission, vision and values. A business will thrive if it has an outstanding strategy. But as the business world changes, it is vital that this business remains faithful to what it stands for, with distinctive value positions in order to find their own strategy sweet spot.

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