This is Prateek Mishra from Ramaiah institute of management studies Bangalore and the following presentation gives an overview of porter analysis of "BEST BUY" (a retail chain)

1. Porter’s five force analysis for
Best buy co. Inc.
Efforts by:
Prateek Mishra
Sanchit kaparuwan
Sumit Kumar
Hitesh sharma
Yash dev sharma

2. Direct competitors
Radio shack
Circuit City (presently out of US market)
Indirect competitors
eBay.com
Amazon.com
Wal-Mart
target

3. Barriers to entry and exit
In the market where Best buy operates , the entry
and exit barriers are rigid because of huge
investments required to enter (e.g. Real estate cost)
and its not easy to liquidify such huge business and
easily leave the market.

4. Rivalry
is high
Bargaining Power of
Customers is low
Threat of
Substitutions is
moderate to
low (i.e. few
substitutes)
Bargaining Power of
Suppliers is high
Threats of New
Entrants is low

5. Threat of Substitutes
The threat of substitutes is low. You have options
like target, Wal-Mart but their a customer does
not get the desired quality and variety of product.

6. Threat of New Entrants
The threat of new entrants is moderate to low, the
reason being that this business requires huge
investment and the well established name that best
buy built over the years in the market , which makes
customer more loyal to best buy and restricts other
players to capture the market.

7. Cont.…..
Electronics Boutique and Egghead are two online
stores that giving competition to Best buy.

8. Bargaining power of suppliers
Best Buy get its products at low prices directly from the
manufacturers like Sony , Panasonic, Toshiba and thus
they rely upon them so that they can pass on this price
benefit to the customers. If in case best buy does not
comply by any of its suppliers condition then it may have
to face serious consequences in terms of customer base
loss, the reason being that their USP(low price) would no
longer be their strength as suppliers may increase the
price.

9. Bargaining power of buyer’s
Since buyer’s at best buy does not buy in large
quantity thus no single customer can have
bargaining power. Since buyer’s get products at
comparatively low prices so they prefer to buy
from best buy. Best buy thrives hard to retain its
customers by offering quality products at lesser
price so as to fight competition.

10. Industry Rivalry
Though Best buy has rivals such as radio shack,
circuit city, or Wal-Mart, but areas where best buy
out do others are quality of service, price, variety
and the staff, that has expertise in the electronic
gadgets more than any other store.

11. Cont.
Competition is high primarily because there is
little to no switching costs if a buyer chooses to
shop elsewhere. Even the products are not
differentiated and so customer has the liberty to
choose the products from any of the stores.

12. Thank you!