Article Review on "Marketing Best Buy and Amazon Are Roughly"
Article Review 4 pages (1183 words) Sources: 0
[EXCERPT] . . . .
MarketingBest Buy and Amazon are roughly the same size in terms of their revenues. Best Buy earned revenues of $50.2 billion in fiscal 2011, while Amazon earned revenue of $48.07 billion. However, Best Buy earned a much higher profit than did Amazon, earning $1.27 billion in net income compared with $631 at Amazon. The difference between the two companies, however, is in their respective growth rates. Best Buy earned revenues of $35.9 billion and net income of $1.37 billion in fiscal 2007; by contrast Amazon had revenues of $14.8 billion in fiscal 2007 and net income of $476 million.
Amazon has a much better balance sheet than does Best Buy. It has cash of $9.5 billion and carries just $1.4 billion in long-term debt, and its equity has increased from $1.2 billion five years ago to $7.7 billion today. By contrast, Best Buy has just $1.1 billion in cash. Although the company has a low level of long-term debt at $711 million, its equity level is at $6.6 billion, compared with $6.2 billion five years ago. Thus, the most prominent difference in the finances of Amazon and Best Buy is that the former is growing very rapidly while Best Buy appears to be in a more mature stage of the corporate life cycle. That said, Best Buy does have good strong financial numbers and has had them for longer than Amazon has.
2. Best Buy carries primarily electronics, so a comparison between them and Amazon must focus on electronics as a key. There is some overlap between products in this area, but there can be slight differences between the models offered, for example in computers. In general, Best Buy tries to undercut Amazon, as this is more in line with its business model. H
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Between the two, Amazon is the better shopping experience. It is faster -- a customer can shop right away from home. But just as important, Amazon does an excellent job with its recommendations and with its reviews. Best Buy in the store does not have these things, just service staff if you can find them. All told, Amazon gives you more help with your purchase. At Best Buy, however, there is the after-sales service element, because dealing with people directly with regard to your problems is much simpler than trying to work with somebody online or over the phone. Still, aside from after-sales service, Amazon is the easier of the two companies to deal with and the one that gives you more help in making the purchase decision.
3. The profile of Best Buy shoppers was fairly neutral. The store was crowded, and therefore there was a wide range of customers reflecting the geographic area. The age demographic was almost entirely adults, but these ranged widely. Ethnically, the composition was akin to that of the area. Shoppers were looking at a lot of different items. In general, there were a lot of shoppers in the personal computers section,… READ MORE
Quoted Instructions for "Marketing Best Buy and Amazon Are Roughly" Assignment:
Article 1: Retailers Risk Losing Share to Amazon ***** Analyst (WSJ)
Article 2: Forecast for Best Buy: Worst is Yet to Come (WSJ)
1. Compare the financial performance of Best Buy and Amazon. Which firm do you think
has a financially healthier outlook?
2. Pick out 20 electronic goods. Go to a Best Buy store and Amazon.com to shop for these
items. Report findings from your comparative shopping (e.g., pricing, convenience,
display of product information, service, return policy, and etc.). Analyze the
disadvantages and advantages of purchasing these items from the Best Buy store vs.
Amazon.com. Do you see a clear winner between these two? Why or why not?
3. Describe the profile of the shoppers at the Best Buy store during your visit. Which items
are they interested in? Which items are purchased? Approximately what percentages of
shoppers physically examine the item(s) of interest but do not make a purchase? What are
the marking implications of your observation?
4. On the basis of your research, develop an action plan for Best Buy to address the critical
issue of *****shoppers using Best Buy as Amazon*****'s showroom*****.
How to Reference "Marketing Best Buy and Amazon Are Roughly" Article Review in a Bibliography
“Marketing Best Buy and Amazon Are Roughly.” A1-TermPaper.com, 2012, https://www.a1-termpaper.com/topics/essay/marketing-best-buy-amazon/74740. Accessed 4 Oct 2024.
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