This American company has become the world’s leading distributor of electronics due to its ability to be the first to offer the latest in-store electronics and have gone on to become necessary for home and the introduction of self-service stores this sector. Now, which has been named by Interbrand, the world’s second largest distributor, has its own brands and several major chains which have diversified business.
Best Buy has become the leading global supplier of consumer electronics made by a number of brands and partnerships which together generate revenue of more than 40 million dollars annually: Best Buy, Audiovisions, Future Shop, Geek Squad, Jianngsu Five Star, Magnolia Audio Video, Pacific Sales Kitchen a Bath Centers, The Carphone Warehouse and Speakeasy. Approximately 165,000 employees work to give life to those marks on various business models such as shops, call centers, websites, home solutions and delivery of products.
But like all empires of the distribution, Best Buy had an origin much more modest over 40 years ago. It was in 1966 when Richard Schulze and his partner James Wheeler opened a store called Sound of Music in Saint Paul, Minnesota specializing in audio. In just one year, the business began to expand and open its second and third branch near the University of Minnesota. These stores soon stand out as being the first to provide consumers with technological developments. Sound of Music is the first video and laserdisc equipment including Panasocnic, Magnavox, Sony and Sharp Corporation.
It continues to expand but was from a disaster when the company was able to get more from their sales. In 1981 a tornado reaches the branch of Roseville, Minnesota, and destroys. Sound of Music Strikes with what it called “Tornado Sale”, an event that ended up having an annual basis and that is to offer discounts on their products during that time.
One of the turning points came two years later when the directors approved a new corporate name and Best Buy opened its first “superstore” in Burnsville, Minnesota, characterized as a space for expanded sales. Then it launches a revolutionary concept electronics sale, the “pick it up and take it.” An open space dedicated to the self, with vendors who do not take commissions and sell instead of advising consumers on shopping.
The launch of this new model, along with who becomes the first retail launch new products such as software and hardware make DVD in 1995, in one of the largest 500 U.S. companies, according to Fortune magazine.
But the ambition of the company did not stop there, internet sales through the launch of its website in 2000 give a new impetus to the company and began to acquire other companies like Magnolia Hi-Fi, now known as Magnolia Audio Video and jumps to internalization through the acquisition of Canada’s Future Shop, the same industry and specialized in selling electronic goods.
At this point, Schulze founder leaves the company giving way to Brad Anderson. It is the year 2001 and is the step in the chain acquired Geek Squad, a company with an innovative concept that began to diversify their businesses. In addition to retail stores, Best Buy is now owner of a business that is “software agents” that solve computer problems at home. This service of Best Buy has already been launched to Spain through The Phone House, company that already before led this business to the United Kingdom.
Internationalization and diversification of the business
Best Buy begins to open stores in abroad like Canada and China, until in 2004, is named by Forbes Company of the Year.
Thereafter, acquires Audiovisions (deluxe electronics for home), Pacific Sales (furniture and appliances) and becomes majority shareholder of the Jiangsu Chinese stores Star Fire Appliances (e). Furthermore, it enters the world of Internet facility and telephone networks with the purchase of Speakeasy.
Currently, Best Buy has announced the launch of the first branches in Mexico and Turkey, as well as another branch in Shanghai. Also it announced that it will open superstores in the UK and other European countries. In technical matters Best Buy decides to promote Blu-ray over HD DVD and recently started selling musical instruments and related products about 70 branches, making sure the company is the second distributor of musical instruments in the United States. Best Buy owns some brands that offer the same company as Insignia, Dynex, Init, Geek Squad and Rocketfish.
Recently, Best Buy announced the appointment of Brian J. Dunn as the new CEO of the company from June 24 to replace Brad Anderson, who has announced his retirement. Dunn, 48, plays the positions of president and chief operating officer of Best Buy, and will also be proposed as a candidate for the board of directors of the company.
Dunn will be in charge of the electronics company since its inception as Sound of Music until today become the second most valuable brand in the world according to the distribution Interbrand report, behind only Wal Mart.