1. Best Buy Industry Analysis Porter '3 Six Forces Rivalry/ Competition (High) Major Competitors: Amazoncom, Wal-Mart, Target, Fry's Electronics, Radio Shack (Currently out of business), & HH Gregg The rivalry between Best Buy and other electronic stores is very high because consumers are constantly searching the market for the best priced product, great customer service and timely gratication. What differentiates Best Buy 'om Amazon, Wal-Mart and Target is their ability to provide products end-to-end, unbiased customer service and long-term support with the products being sold. Additionally, Best Buy is competing directly with both Amazon and Wal-Mart for market share because of Circuit Cit and Radio Shack's exit from the indus Risk of Entry (Low) The risk of entry into the electronics industry is relatively low. The initial investment to enter this industry is extremely high and would immediately deter prospective competition. Best Buy has an established relationship with suppliers and Wide spread distribution. Not only does Best Buy boast a large amount of physical stores in the United States (roughly 1,000) but it also has an online and international resence. 0 Companies interested in entering the electronics industry would also be behind in terms of notoriety. \"Best Buy\" is a household name and an intangible asset that any new entrant would not be able to duplicate. 3. Bargaining Power of Suppliers (Moderate) 0 The bargaining power of suppliers for Best Buy is moderate. Suppliers of the electronics that Best Buy sells include: Apple, Dell, Samsung, Sony, and LG to name a few. 0 Best Buy is not the only option that suppliers have when it comes to electronic sales. Not only do suppliers have the choice to have Amazon, Target or Wal-Mart sell their products but they have the capability to sell their products directly to the customer. Although this would logically make the bargaining power of suppliers extremely high, Best Buy is able to off set it through their ability to have physical inventory. Additionally, Best Buy features the supplier's product on a wider scale; the more locations that suppliers can be in, the more revenue they will make. 0 Suppliers bargaining power is also diminished because Best Buy purchases such a large volume that they are forced to maintain fair prices and adequate quality. Without Best Best purchasing their products, suppliers would be left with a large amount of inventory on their hands. 4. Bargaining Power of Buyers (Low) 0 The bargaining power of buyers is extremely low. Buyers in the electronic industry are usually everyday customers. In order for bargaining power to become higher, the customer would have to be purchasing in bulk. 0 The electronic industry is a commodity industry, meaning that the products are not necessities and consumers do not usually get to negotiate the price. Unless in a special case where Best Buy is price matching a competitor that sells the product for a cheaper price. 0 Obviously consumers are not capable of creating their own electronics which is another reason why bargaining power of buyers is low. 5. Threat of Substitutes (Low) 0 The threat of substitutes in the electronics industry is extremely low. Other than books, magazines and participating in physical activity, essentially every other form of entertainment in today's society involves electronics. 0 The production of new and innovative electronics is inevitable. There is always a more efcient version of today's products waiting around the corner, ready for the public to jump at the opportunity to buy it. 0 At this rate, electronics have become a staple in the average family's home. Not just a modern family or an American family but in every family's home. Refrigerators, microwaves, televisions, phones and game consoles are becoming standard in homes around the world. Society depends on electronics and I believe that there is really no substitution for electronics. 6. Complementors (High) 0 The complementors of the electronics industry is high. Depending on the specic electronic product, complementors range anywhere from wiring, furniture, installation services and vehicles. 0 Best Buy has made an effort to integrate all available products involved with electronics. An end- to-end strategy incorporates everything from the purchase of the product to installation, warranty and support. 0 For example, a customer can buy a television, sound system, couches, cabinets, game console for the television and DVDs all in one trip. In addition to the purchases of these electronics and accessories, a division of Best Buy called Geek Squad would install the television for you to ensure that it is set up correctly. Instead of buying all of these products separately, Best Buy strategically consolidated all potential complementors into their store