Best Buy Business Success in the Chinese Market


Competitive advantage is the ability of a business to excel in the market despite all the resisting factors. For a business to achieve competitive advantage it must have a focused marketing strategy based on its SWOT Analysis; the study of its Strength, Weaknesses, Opportunities and possible Threats. To understand the competitive advantage of Best Buy in the China Market, it becomes necessary to review its position with regards to SWOT analysis.

Best Buy SWOT Analysis

To review the SWOT analysis of Best Buy Company, first we look at its strengths. Best buy has a reputation of excellent performance which popularizes its brand name against its competitors (Kwok, Dornbach-Bender, Lange, 19). Secondly, Best Buy has vast market coverage due to its spread of branches. Its stable financial position and upward trend profit making are also a supportive factor to the company. With regards to weaknesses, Best Buy overlies on a limited number of selected suppliers which poses a substantial risk in case of sabotage by any or all of the suppliers (Kwok, Dornbach-Bender, Lange, 21).

Secondly, Best Buy lacks diversification in its income generating sources, a serious factor which competitors can easily capitalize on and paralyze its business. Its weakness notwithstanding, Best Buy has ample opportunities for business strategic growth. The adoption of Western technology such as Consumer Electronic Market and the use of internet marketing bring the realization of unexplored market and business expansion avenues (Kwok, Dornbach-Bender, Lange, 22).

About threats, Best buys faces a lethal competition from international and regional traders. This has necessitated its reduction of prices in order to maintain its position in the market. Secondly some consumers view Buy Best products as unnecessary (Kwok, Dornbach-Bender, Lange, 22). Finally about threats, the fact that it all suddenly, the company consolidates all its energies on its new brand ‘Five star’ before it stands the test of time.

Efficiency if BB’s Marketing strategy in Service Delivery

The efficiency of marketing strategies exhibits a miscalculation in decision making and perhaps explains the decline in consumer confidence from the year 2006 onwards as can be seen in its industry analysis (Ramzi and Mohamed, 102). Since the Five Star brand was launched in 2006, the decision-makers should have noticed the decline in consumer confidence. This was a clear indicator that Five Star Brand did not have the capacity to deliver competitive advantage for Best Buy Company.

The decision to close up the nine branded stores to give way for the Five Star idea was likewise detrimental to the competitive advantage of Best Buy. This could give an impression to consumers that the company was going bankrupt. Naturally consumers would unwilling to be part of a failing company, therefore, with this rapid move, Best Buy risked losing the loyalty of its clients to its competitors.

Benefits of a Five Star Business in China

In as much as Five Star Business exposes Best Buy Company to serious risks and challenges, it is fundamental to note that, amidst challenges emerge enormous opportunities. Five Star business Marketing strategies have the potential to create more business opportunities in the China Market for Best Buy than the branded stores (Young, 18). Five Star Model is undoubtedly vital for Best Buy. It provides users methodology and processes whose end results satisfy the Market needs in China. However, Best Buy faces the challenge of new entrants who have also realized the growth potential of the China market and are quickly establishing their roots in China, threatening the otherwise inevitable monopoly which Best Buy would have had to exploit by virtue of Five Star Marketing Model (Young, 17).

The local players have challenges since they are entering into an already established arena of competition with Best Buy. New players like Wal-Mart acquiring Trust –Mart to get into the market. The market is so closed by Best Buy to local players. They have been enjoying monopoly in the market for quite long. The five-star marketing model adopted by Best Buy is aimed at consolidating continued monopoly in the market. The model aims at providing acceptable goods and services that satisfy the needs of the consumers (Ramzi and Mohamed, 28). Consequently, the market share is controlled by Best Buy and new entrants are left with minimal chances of joining the market.

The business, therefore, shielded from the aggression of local players. The local players are now emerging with internationally established firms like the Wal-Mart. This is to ensure smooth competition in the same market segment to compete with Best Buy. Apart from Wal-Mart acquiring Trust-Mart, Home-Depot have also acquired Chinese Home-Mart to help it get the market share. These international companies are acquiring these local companies since they need to understand the Chinese culture and taste. The introduction of five star strategies has not worked well for Best Buy as anticipated; in contrast, it has opened roots for local competition into the market. Some customers have shifted loyalty since they could not get their regular services since most of the retails are closed by Best buy.

Making Five Star Business a Success in China

Making a five-star business success in China market is challenging. Best Buy can strategize on pricing of its products. According to Chakravarthy and McEvily, adopting five-star businesses limits the number of locations of the business and competitive price will ensure customer loyalty (98). Best Buy will need to offer competitive price to continue survival and grow its business. The price offered should be low, but the services must be outstanding so that the business benefits from economies of large scale due to customers turn out. This is known as skimming strategy, ones the customers trust is established, the price adjustments will have no effect.


Competition is common in all business, but the success of any business is based on the customers. In The Business Quarterly, we find that, building customer loyalty is done through quality service and goods provide and a competitive price (46). The company is therefore, called to analyze the market and understand its dynamics. Best Buy SWOT analysis will help it is positioning itself well in the market. The challenge it is facing is the adoption of the new five-star strategies. This has reduced the customer numbers and invited a stiff completion from other local firms. Despite this competition, Best Buy can compete by initiating a pricing strategy to win its customers back. In business, continues transformation matters in order to remain relevant in the market.

Works Cited

Chakravarthy, Bala, and McEvily Sue. Knowledge Management and Corporate Renewal. London: Oxford university press, 2005.

Kwok, Ian, Dornbach-Bender Rhett and Lange Rebecca. Strategic Report for Best Buy Co., Inc. Oasis Consulting: Beiging, 2009. Print.

Ramzi, Al-Rousan and Mohamed Badaruddin. Customer Loyalty and the Impacts of Service Quality:The Case of Five Star Hotels in Jordan. International Journal of Human and Social Sciences 5:13 2010. Print.

The Business Quaterly. Customer Acquisition Strategies and Tactics. Ajournal Marketing Strategy: Working Paper 120, China 2011 Issue, 2011. Print.

Young, Esther. Cracking the Chinese Retail Market. The China Green Tech Report 2011. Shangai 2011. Print.

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