Best Buy, the last major consumer electronics retailer in the U.S., is committed to go beyond its traditional typical big-box retailer role of selling commodity products such as televisions and personal computers and become central player in determining which products come to marker. Rather than waiting for electronics makers such as Hewlett-Packard and Toshiba to ship Best Buy the same products that its rivals get, Best Buy is now collaborating with suppliers, influencing product development and design. The retailer is pushing suppliers to use standardized software and digital services so consumers can listen to music or watch movies on any device. And Best Buy has set up its own venture capital fund to pour millions of dollars into start-ups from Silicon Valley to Asia. The goal is to shape development of new technologies in promising Fields such as green vehicles, digital health, and home monitoring. Best Buy wants to become the go-to store to test out the latest gear or get exclusive goodies.There is a big swath of customers that are going to want to get a little advice and to touch feel that new gadget. Users come into Best Buy for reasonably good answers and solutions to the question of what is the right gadget to buy. Best Buy is promoting partnerships with suppliers for the common purpose of connecting more consumers to more devices.
One advantage of Best Buy’s innovative strategy is to reinforce its bargaining power with suppliers. Best Buy is definitely in a position of strength with its suppliers because it is closer to the consumer. Being the entity with the strongest knowledge of and deepest relationships with consumers gives Best Buy real bargaining power. As a large-scale retailer with asales force of 150,000, Best Buy has the golden opportunity to be the co-creator and sole source of all kinds of all kinds of new, unique, and innovative things that people want, and to make a lot of money in the process. Best Buy’s new role makes it a kingmaker for companies that play along and a serious threat for those that refuse. The company is already selling certain products in competition with suppliers, and will likely push other products off store shelves to make room for the products it is developing. Executives at several major electronics companies worry privately about Best Buy’s growing influence. They are concerned that Best Buy could block them from placing innovative products in front of customers or that it would favor Best Buy-backed goods.
Best Buy, the last major consumer electronics retailer in the U.S., is committed to go beyond its traditional typical big-box retailer role of selling commodity products such as televisions and personal computers and become central player in determining which products come to marker. Rather than waiting for electronics makers such as Hewlett-Packard and Toshiba to ship Best Buy the same products that its rivals get, Best Buy is now collaborating with suppliers, influencing product development and design. The retailer is pushing suppliers to use standardized software and digital services so consumers can listen to music or watch movies on any device. And Best Buy has set up its own venture capital fund to pour millions of dollars into start-ups from Silicon Valley to Asia. The goal is to shape development of new technologies in promising Fields such as green vehicles, digital health, and home monitoring. Best Buy wants to become the go-to store to test out the latest gear or get exclusive goodies.There is a big swath of customers that are going to want to get a little advice and to touch feel that new gadget. Users come into Best Buy for reasonably good answers and solutions to the question of what is the right gadget to buy. Best Buy is promoting partnerships with suppliers for the common purpose of connecting more consumers to more devices.One advantage of Best Buy’s innovative strategy is to reinforce its bargaining power with suppliers. Best Buy is definitely in a position of strength with its suppliers because it is closer to the consumer. Being the entity with the strongest knowledge of and deepest relationships with consumers gives Best Buy real bargaining power. As a large-scale retailer with asales force of 150,000, Best Buy has the golden opportunity to be the co-creator and sole source of all kinds of all kinds of new, unique, and innovative things that people want, and to make a lot of money in the process. Best Buy’s new role makes it a kingmaker for companies that play along and a serious threat for those that refuse. The company is already selling certain products in competition with suppliers, and will likely push other products off store shelves to make room for the products it is developing. Executives at several major electronics companies worry privately about Best Buy’s growing influence. They are concerned that Best Buy could block them from placing innovative products in front of customers or that it would favor Best Buy-backed goods.
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