Best Buy has a five-pronged growth strategy for meeting its lofty goal of doubling sales to $80 billion over the next five years.
Mike Vitelli, executive VP of the company’s customer operating group, which oversees buying and merchandising, outlined the game plan for achieving 15 percent annual growth during an investor conference held here earlier this month by Oppenheimer & Co.
First, he said, the company believes it will continue to benefit from the CE industry’s steady growth of 6 percent over time.
Second, Best Buy will increase its market share by opening new stores and by developing categories where it presently has limited share. These include Apple computers, a relatively recent brand addition; major appliances, which are benefiting from a differentiated assortment and a dedicated sales force with increased training; and mobile phones, which have been reinvigorated by a new business model developed with Carphone Warehouse.
The latter two categories are increasing from single-digit to double-digit growth, Vitelli said.
The third element is the introduction of new categories, such as musical instruments. While all Best Buy stores carry a smattering of keyboards and guitars, he said, the company is experimenting with extensive, “top-shelf” collections in several locations around the country.
A fourth growth engine is the development of completely new business models, such as the planned national rollout of Pacific Sales, the company’s West Coast chain of premium appliance stores.
The final element is international growth. Best Buy has already established itself in Canada, China and Europe, and soon plans to open its first stores in Mexico and Turkey.
Separately, Vitelli said the company is working hard to engender more personalized service on the store level in order to combine the scale benefits of a national chain with the hands-on attention of an independent dealer.