Best Buy SWOT and PESTLE Analysis

Previously known as ‘Sound of Music’, Best buy is a leading provider of technology products, operating in the US, Canada, and Mexico. The company sells hundreds of electronic goods under a parasol of its five home brands. The company’s Geek Squad agents provide expert advice on a broad portfolio of tech products, whether it is through online, walk-into store or a personal visit to a customer’s home; the best buy agents solve customer’s technology problems by addressing their key needs. Here is a utilization of SWOT analysis to assess the company's competitive stance by recognizing its internal strategic factors like strengths and weaknesses, external strategic factors like opportunities and threats. Precisely, SWOT analysis is a primitive and highly applicable evaluation model that evaluates the internal and external factors and their influences on the Company's micro and macro environment.
One of the core competencies of Best Buy is its accessibility, with 956 stores in the US, more than 70% of US residents can access the Best Buy store in just 15 mins. This truly is a huge competitive advantage that Best Buy enjoys over its peers. Powerful market presence, robust fiscal muscle, large audience reach through the online platform, a top retailer in US, wide range of products, own brand products, customer-centric business model, skilled and dedicated employees etc., are some of the key strengths of Best Buy that gives the company an edge over its competitors.
One of the major weakness of Best buy is, its core business is highly dependent on the local consumers of the US; hence the profit of the company relies extensively on the US market. Since Best Buy is a supplier of luxury products and they are not the fundamental human needs, the economic downturn can lead to a decline in consumption of Best Buy’s goods.
Progression in technology is leveraging the computer and electronic retail sector, the high expected growth rate in this sector is a great opportunity for Best Buy to boost its sales. Expansion in potential markets, reaching out to more audiences through online platforms, penetrating the markets with E-commerce platform etc., can be some of the great achievable opportunities.
The retail sector in which Best Buy operates is highly competitive and the company faces substantial competition from multi-channel retailers, e-commerce businesses, technology service providers, traditional store-based retailers and vendors and mobile network carriers that extend their commodities and services straight to customers, which is a threat affecting Best Buy’s revenue and profitability.
The SWOT analysis for Best Buy is presented in a SWOT Matrix below, followed by detailed analysis:

Strengths	Weaknesses
1. Largest consumer retailer 2. Strong management team 3. Established support services 4. Persistent strong financials	1. High overhead costs 2. Increasing inventory levels 3. Dependence on domestic markets 4. Store closures and layoffs
Opportunities	Threats
1. Maintaining good vendor relationships 2. Growing its smart home business 3. Dwindling fortunes of competitors 4. Increasing online presence	1. Intense competition from e-retail giants 2. Higher expectation of customer satisfaction 3. Imposition of tariffs on Chinese imports by Trump administration 4. Online gaming popularity leading to decrease in demand for gaming products

Detailed SWOT Analysis of Best Buy

According to The PESTLE / STEEPL / PEST analysis eliciting the current trends in a consumer electronics industry, which are significant for a company operating in this sector, to achieve sustainable growth are as follows:
Brand loyalty and appreciation, smart household appliances powered by IoT, E-Commerce platform, multi-channel retail driving in new customers, industrialization to improvise production of commodities, and attempts in reducing carbon footprint.
Here is utilization of this framework to understand the impact of these trends on Best Buy and how well the company incorporates it into its business model. PESTLE tool helps assess the external factors and its influences on the macro environment of Best Buy. The PESTLE / STEEPL / PEST analysis is a handy technique to analyze the influencers like political, economic, social, technological, legal and environmental and their impression on Best Buy’s business case and its growth trajectory.
During the 2021 fiscal year, Best Buy generated 8% of revenue from its global markets, hence the Company’s international operations are governed by and exposed to various political and legal risks. Some of the political and legal factors that can adversely influence the revenue and profitability of Best Buy are political conditions, geopolitical events (war or terrorism), vacillating rules governing international trade and ownership of foreign entities, fluctuating foreign currencies and exchange rates, distinct rules for employee relations and work councils.
Economic conditions of a country, monetary and fiscal policies, taxes rules etc. highly dominate the business of Best Buy. Since Best Buy products are not deemed necessary and considered as luxury products the sales profoundly depend on the increase of disposable income of consumers. Best Buy showcases its social responsibility by initiating foundations to support societies, it also has setup programs for children’s welfare and to build a strong educational relationship with them. Best buy is a tech-based company and advancement in technology has leveraged its revenue and profitability. Be it electronics, fitness gadgets, games or everyday appliances, the Best Buy products are versed with modern and the latest technology. Best Buy works positively towards reducing its impact on the environment; they have initiated programs in 2018 to reduce carbon emission by 60% by 2020. Recycling e-waste is their key strength and an environment favorable approach. By signing the Climate Pledge, Best Buy has committed to becoming climate neutral by 2040.
The PESTLE/ STEEPL / PEST analysis for Best Buy is presented below in the nutshell followed by detailed analysis:

Political	Economical
1. Trump’s trade war with China to hurt retailers 2. Engagement in public policy issues for enhancing stakeholder interests	1. Retail sector going through turbulent environment
Social	Technological
1. Customers averse of buying big-ticket items online 2. Shifting of consumer preferences towards experience related spends	1. Leveraging data analytics for store insights
Legal	Environmental
1. Strong compliance standards for suppliers 2. Security concerns leading to supplier termination	1. Initiatives for sustainability and climate change 2. Focusing on providing customers with sustainable products

Detailed Pestle Analysis of Best Buy

1. The SWOT and PESTLE analysis report presents an understanding of the obscure internal and external factors influencing the brand and operations of Best Buy.
2. The SWOT/TOWS analysis report compounds all the internal strategic factors that render the major strengths and weaknesses of Best Buy
3. The report bestows intelligence on the external analysis, comprising the opportunities which can be consolidated to accomplish worldwide growth and development. It also talks about some pertinent threats to the company that threatens to impede growth
4. The reports highlight the core competencies of Best Buy and factors that help attain competitive advantage for the company over its rivals and competitors from the electronics retail industry
5. The Pestle analysis gives crisp information about current trends of the electronic retail industry and detailed picture of the external factors like political, economic, social, technological, legal and environmental factors and their influences on the industry and extensively on Best Buy
6. The analysis scrutinizes Best Buy's business diversification, hence extracting its key business segments and highlighting its significant competitors
7. Analysis of the acquisitions, mergers, share price, capital raising, equity transactions, alliances or partnership ventures that Best buy consented with deal valuations and the business aspirations or aims that were accomplished by them.
8. Insights into Best Buy’s business model, along with further breakdown and analysis of key business segments and business case study
9. Cognizance of current trends of the retail industry and its influences on the Best Buy company
10. A brief overview of Best Buy's founders, its corporate headquarters, owners & stakeholders, and revenue jumps. Additionally the report gives a picture about company information, company profile, business model, business plans and marketing strategy.
11. A glimpse into the Best Buy's Unique Selling Proposition, core values, value proposition, key performance indicators, and success factors