The Geek Squad story begins when Stephens, a native ofChicago, passed up an Art Institute scholarship to pursue a degreein computer science. While Stephens was a computer science studenthe took a job fixing computers for a research laboratory, and healso started consulting. He could repair televisions, computers,and a variety of other items, although he decided to focus oncomputers. His experiences as a consultant led him to realize thatmost people needed help with technology and that they saw value ina service whose employees would show up at a specified time, befriendly, use understandable language, and solve the problem. So,with just $200, Stephens formed Geek Squad in 1994. Geek Squad setout to provide timely and effective help with all computing needsregardless of the make, model, or place of purchase. Geek Squademployees were called “agents” and wore uniforms consisting ofblack pants or skirts, black shoes, white shirts, black clip-onties, a badge, and a black jacket with a Geek Squad logo to createa “humble” attitude that was not threatening to customers. Agentsdrove black-and-white Volkswagen Beetles, or Geekmobiles, with alogo on the door, and charged fixed prices for services, regardlessof how much time was required to provide the service. The “housecall” services ranged from installing networks, to debugging acomputer, to setting up an entertainment system, and cost from $100to $300. “We're like Dragnet'; we show up at people's homes andhelp,” Stephens says. “We're also like Ghostbusters and there's apseudogovernment feel to it likeMen in Black.” In 2002, Geek Squadwas purchased by leading consumer electronics retailer Best Buy forabout $3 million. Best Buy had observed very high return rates formost of its complex products. Shoppers would be excited about newproducts, purchase them and take them home, get frustrated tryingto make them actually work, and then return them to the storedemanding a refund. In fact, Best Buy research revealed thatconsumers were beginning to see service as a critical element ofthe purchase. The partnership was an excellent match. Best Buyconsumers welcomed the help. Stephens became Geek Squad's chiefinspector and a Best Buy vice president and began putting a GeekSquad “precinct” in every Best Buy store, creating some stand-aloneGeek Squad Stores, and providing 24-hour telephone support. Thereare now more than 20,000 agents in the United States, Canada, theUnited Kingdom, and China, and return rates have declined by 25 to35 percent. Geek Squad service plans are also being sold on eBayand in some Target stores. The Geek Squad website proclaims thatthe company is “Serving the Public, Policing Technology andProtecting the World.” THE CHANGING ENVIRONMENT Many changes in theenvironment occurred to create the need for Geek Squad's services.Future changes are also likely to change the way Geek Squadoperates. An environmental scan helps illustrate the changes. Themost obvious changes may be related to technology. Wirelessbroadband technology, high-definition televisions, products withInternet interfaces, and a general trend toward computers,smartphones, entertainment systems, and even appliances beinginterconnected are just a few examples of new products andapplications for consumers to learn about. There are alsotechnology-related problems such as viruses, spyware, lost data,and “crashed” or inoperable computers. New technologies have alsocreated a demand for new types of maintenance such as passwordmanagement, operating system updates, disk cleanup, and“defragging.” Another environmental change that contributes to thepopularity of Geek Squad is the change in social factors such asdemographics and culture. In the past many electronicsmanufacturers and retailers focused primarily on men. Women,however, are becoming increasingly interested in personal computingand home entertainment and, according to the Consumer ElectronicsAssociation, are likely to outspend men in the near future. BestBuy's consumer research indicates that women expect personalservice during the purchase as well as during the installationafter the purchase—exactly the service Geek Squad is designed toprovide. Our culture is also embracing the Geek Squad concept. Forexample, in the recently discontinued television series Chuck(2007–2012), one of the characters worked for the “Nerd Herd” at“Buy More” and drove a car like a Geekmobile on service calls!Competition, economics, and the regulatory environment have alsohad a big influence on Geek Squad. As discount stores such asWalmart and PC makers such as Dell began to compete with Best Buy,new services such as in-home installation were needed to createvalue for customers. Now, just as change in competition created anopportunity for Geek Squad, it is also leading to another level ofcompetition as Staples has introduced EasyTech services and OfficeDepot has introduced Tech Depot services. The economic situationfor electronics continues to improve as prices decline and demandincreases. Consumers purchased 2 million 3D TVs in 2010, and salesof all consumer electronics exceeded $180 billion. Finally, theregulatory environment continues to change with respect to theelectronic transfer of copyrighted materials such as music andmovies and software. Geek Squad must monitor the changes to ensurethat its services comply with relevant laws. THE FUTURE FOR GEEKSQUAD The combination of many positive environmental factors helpsexplain the extraordinary success of Geek Squad. Today, it repairsmore than 3,000 PCs a day and generates more than $2 billion inrevenue. Because Geek Squad services have a high profit margin theycontribute to the overall performance of Best Buy, and they helpgenerate traffic in the store and create store loyalty. To continueto grow, however, Geek Squad will need to continue to scan theenvironment and try new approaches to creating customer value. Onepossible new approach is to create new partnerships. Geek Squad andFord, for example, have developed a partnership to help consumersinstall in-car communication systems. In the future, Best Buy willoffer 240-volt home charging stations for Ford's electric vehicle,the Focus. Geek Squad will offer electrical audits and residentialinstallations for the car owners. Geek Squad is also using newtechnology to improve. Agents now use a smartphone to accessupdated schedules, log in their hours, and run diagnostics tests onclients' equipment. Best Buy is also testing a “Solutions Central”desk, similar to the Genius Bar concept in Apple stores, andstaffing it with Geek Squad agents. Finally, to attract the bestpossible employees, Geek Squad and Best Buy are trying a“results-only work environment” that has no fixed schedules and nomandatory meetings. By encouraging employees to make their ownwork–life decisions, the Geek Squad hopes to keep morale andproductivity high. Other changes and opportunities are certain toappear soon. However, despite the success of the Geek Squad and thepotential for additional growth, Robert Stephens is modest andclaims, “Geeks may inherit the Earth, but they have no desire torule it!”

Question:You have been asked to consult with the Best Buymarketing team. They are specifically looking for recommendationsas to specific promotional activities you would recommend toencourage consumers who currently use independent installers toswitch to Geek Squad. To aid you in formulating yourrecommendations, you should consider past and presentconsumer purchasing patterns; conduct an environmental scanfor Geek Squad using each of the five environmental forces (social,economic, technological, competitive, and regulatory); and identifykey trends likely to influence Geek Squad in the nearfuture.

Marketing class