Best Buy Makes Management Changes, Looks to China
By George Anderson
Best Buy’s latest management shuffle is the most recent indication that it is set on moving forward with its domestic consumer-centricity initiatives while looking overseas,
specifically China, for future growth opportunities.
The consumer electronics retailer has promoted company veteran Brian Dunn to president and chief operating officer and named Robert Willett as the CEO of Best Buy International.
Best Buy CEO Brad Anderson said of Mr. Dunn: “Brian has deep contextual knowledge of the company, gained over his successful 20-year track record with us. As a leader, Brian
has excelled because he values and promotes initiative, innovation and collaboration. He knows how to tap the strengths of every individual on his team, and he is quick to embrace
new ideas. His combination of confidence and the desire to win makes him a natural choice for this role.”
Mr. Dunn said, “I’m excited about the challenge of taking customer centricity to a new level, and making it how we do business at all of our stores. By bringing our stores together
with the teams that gather customer insights and those that identify customer solutions, we will have a powerful combination that we expect will truly differentiate Best Buy in
the marketplace.”
Mr. Willett is seen as an expert in supply chain and information technology.
“Bob has made tremendous progress with a myriad of initiatives around our supply chain and core information technology systems,” said Mr. Anderson. “Before he joined Best Buy
as an officer, he worked alongside us as a consultant for five years and ultimately was asked to serve as a special advisor to our board of directors. He has significant experience
in international retailing. He has run department stores in the United Kingdom, Europe and Asia; held leadership roles for a general merchandise retailer in the United Kingdom;
and consulted with top-200 retailers. His experiences will be invaluable to us as he takes the lead on our international expansion.”
“My focus will continue to be on transforming our supply chain and IT infrastructure. I’m pleased to assume additional responsibility for our international business, where supply
chain and IT can play a critical role in delivering our long-term success. I believe that with the right structure, we can pursue controlled growth in other countries with less
risk,” said Mr. Willett.
Moderator’s Comment: What are your thoughts on Best Buy’s strategic plans for growth? What do you see as the biggest challenges and opportunities in
front of the company as it moves forward? –
George Anderson – Moderator
Excellent companies deploy resources in support of mission critical objectives, and align skill sets with objectives. My thought on the international side is matching the focus on supply chain and IT with the mission for Best Buy International. Apparently, that mission is NOT the aggressive entry into other consumer markets, but rather the building of an international sourcing capability? I worked in the same organization with Bob Willet, although I never met him. His reputation was outstanding.
It would be nice to know Mr. Dunn’s experience and positions held. They might give insight into his core competencies, and thus the areas he’s likely to focus. A COO is vital to a company like Best Buy, and needs to serve as a someone completely focused and dedicated to the corporate vision and strategy.
BB is recognizing something which much of the world has acknowledged. China (and India) are the gateway to future success. With much of the world’s population in these 2 countries, attached to a growing middle class, and burgeoning influx from foreign investment, and you have the secret sauce of retailing. Wal-Mart has already declared that their future is based upon foreign growth, and it is only a matter of time before all of the key retailers follow suit, including Home Depot, Target, etc. Add to this the demand for electronics, and the continuously falling price points that they represent and you have a guarantee for success for BB.
As a 30-year veteran in the consumer electronics industry, I have watched Best Buy at every stage of its development. In a business that is focused on ever-changing technology, Best Buy has bested their competitors by trying to change that focus on the customer. That attempt, in itself, sets Best Buy apart from others in the industry.
Execution is always the difficult part, and others are absolutely correct in noting that BB service levels are uneven.
As soon as we can convince customers to pay the true value for the miracle products like those just shown at this year’s Consumer Electronics Show, then retailers will be able to invest more in hiring seasoned career professionals instead of young, tech geeks.
Until then, Best Buy will be about as good as it gets.
Having the two top executives focused on customer demand and supply chain efficiency is the formula advocated by everyone talking about customer-centric policies, so, theoretically, this is a good combination for the future of Best Buy. China needs to be considered as market by every company. With the world’s largest population and nearly 10% growth for the last few years, China is a major market. However, companies ignore India at their peril.
Best Buy is an achiever in a very tough business. Electronics retailers are margin-challenged, not just by other electronics stores but also by discount stores, warehouse stores, and the internet. Although Best Buy’s marketing and financial results are impressive compared to many competitors, their store level execution is uneven. It’s easier to improve the supply chain than to achieve a consistently superior level of face to face customer service. So when people give Best Buy a grade, they should consider: am I grading on a curve, compared to most other hard goods stores or am I grading on an absolute scale? My experience is that they’re no better than average on face to face customer service. And the average is poor.
May be a good idea, but they should keep in mind that other global players could be quicker and more efficient doing consumer electronics business in China. One of the fastest growing formats of German Metro group is “Media Markt.” Being already well established in China, they could multiply this profitable business quite easily. But maybe they have different priorities – so Best Buy could be right entering this market (without announcing it too loud).