Among many variables that determine a company’s success, the idea of integrity has always been at the top of the list.
The honesty and reliability of both the employees of a business and the high ranking officials is important to instill a sense of confidence in the customer.
This past week, it was announced that Brian Dunn, CEO of Best Buy is stepping down, as rumors circulate pertaining to a “personal conduct” issue. It is unclear as of right now what actually occurred, but one thing is for sure: Best Buy will undoubtedly face difficult times.
The reason Best Buy is going to be confronted with severe hardships is because their infrastructure is dwindling. The obvious aspects are the weak growth in the stock market as well as its meager success in European markets. However, it is the not so obvious issues that are most concerning.
Following seven months of employment by Best Buy, Lucas Eckert, a freshman computer science major here at Virginia Tech, was able to shed some light on the slowly disintegrating company.
He found what made Best Buy an attractive retailer to shop at and work for was feigning. In his training, the phrase “customer centricity” was a frequently used reminder to make sure the customer is what matters the most when conducting business. But as he was nearing the end of his service, he felt that the motives of the staff and management had changed.
The sale became less about the customer getting precisely what they wanted and more about making money. Of course, this could be different at other locations, but according to an employee at another Best Buy in the same area, there was a similar situation.
Now that the CEO of the company has resigned due to what seems to be a morality issue, the consumer trust and confidence in Best Buy will almost certainly waiver.
I used to go to Best Buy frequently to pick up my electronics and video games, but I haven’t been a patron in years. I’m interested in what the general public makes of the recent developments, or should I say regressions in the company.
As of right now from a stock analysis standpoint, the company is doing alright. When the news was released that Brian Dunn was stepping down, the price of Best Buy’s shares plummeted but quickly recovered. They have not returned to the pre-announcement levels, but they are hovering just below.
For the immediate future, at least, it seems Best Buy will be able to remain stable and capable of carrying out normal business operations, but how the company will fare in the future is uncertain.
In fact, the recent condition of the electronic retail stores around the U.S. has been shaky at best. A combination of new competitor companies and the downtrodden state of the economy has put a question mark on the future of the electronic superstores that we have today.
With the online companies such as Amazon and eBay, consumers can find the electronics they are looking for, buy them and receive them without leaving the comfort of their own homes.
Not only are these distributors more convenient than companies like Best Buy, their prices are usually lower as well.
The online companies don’t have to deal with the extra expenses of paying in-store employees in addition to the upkeep of the building itself. Because of these costs, Best Buy is forced to mark up the price of its products in order to ensure profit.
The electronic retail business is also a bit shaky as a whole because its revenue is based heavily on products that are mostly bought with disposable income.
When the economy is down, no one has the extra funds to put toward these products, and this has led to the industry’s decline and the closure of as seen when Circuit City filed for bankruptcy in 2008.
Then again, Best Buy will always be able to boast the advantage of allowing customers to come into the store and actually get their hands on an item they are thinking of purchasing. The customer can be sure that they are getting what they want when they can see it in person. This buying confidence does not exist online.
It’s nearly impossible to predict the downfall of a large company, or an entire industry for that matter, but this economy has shown nothing is too big to fail.
With the direction online companies and consumers are headed, the electronic retailing companies across the U.S. could be in severe trouble. Best Buy is at the forefront.