Best Buy is looking to double its sales to $80 billion over the next five years and the consumer electronics (CE) giant has a plan for getting there, according to a report on the TWICE (This Week in Consumer Electronics) website.
Mike Vitelli, executive vice president of Best Buy's customer operating group, outlined five keys that will enable the chain to achieve its goals at an Oppenheimer & Co. investor conference.
The first piece of the puzzle for Best Buy is the continued strength of the CE market. The retailer is projecting CE will continue to grow at a rate of six percent a year.
Mr. Vitelli said Best Buy intends to grab greater share of the CE market by opening new locations and also expanding its presence in categories where it currently has a limited presence such as in Apple computers, major household appliances and mobile phones. According to TWICE, Mr. Vitelli said Best Buy has gone from single- to double-digit annual growth in both appliances and cell phones.
Best Buy is also looking to enter completely new categories to achieve sales gains. The company has introduced "top shelf" musical instrument selections in a number of locations around the U.S.
The fourth opportunity Best Buy sees is in completely new business models or formats. A case in point, according to Mr. Vitelli, is the company's plan to take its Pacific Sales premium appliance store national.
Finally, Best Buy is looking outside the borders of the U.S. for significant growth. It currently operates stores in Canada, China and Europe (as part of its deal with The Carphone Warehouse). It currently has plans on the board to open stores in Mexico and Turkey.
Discussion Questions: What factors will be most critical to Best Buy achieving its goal of doubling sales within the next five years? Where do you see the biggest threat to Best Buy that could keep it from achieving its sales and share goals?