Why Best Buy's Dual Brand Strategy Failed in Canada. Issue 4 (1st October 2016)

• Record Type: Journal Article
• Authors: Valencia Saravia, Juan; Wang, Shuguang
• Is Part Of: Professional geographer. Volume 68:Issue 4(2016)
• Page Start: 650
• Page End: 662
• Publication Date: 2016-10-01
• Subjects: Best Buy -- business geography -- Canada -- dual brand operation -- Future Shop; 百思买, 商业地理, 加拿大, 双重品牌操作, 未来商店。; Best Buy -- geografía comercial -- Canadá -- operación de doble marca -- Future Shop; Geography -- Periodicals; 910
• DOI: 10.1080/00330124.2016.1140495
• Languages: English
• ISSNs: 0033-0124

Abstract

Abstract : This study investigates how the U.S.-based consumer electronics retailer Best Buy implemented its dual brand strategy in Canada following its acquisition of Future Shop in 2001. The study examines the differentiations between the two brands (Best Buy and Future Shop) in four aspects: geographical adjacency, store operation, product offering, and price structure. The study reveals that Best Buy takes a spatial proximity approach to store development with both Best Buy and Future Shop stores at many locations. Yet, their big box stores have very similar product offerings and price structure. Limited forms of differentiation are observed in store operations; however, they are insufficient to avoid cannibalization. Although the dual brand strategy should not be viewed as the only cause of Best Buy Canada losing its competitive edge in the Canadian consumer electronics market, it is a factor that affects its ability to reduce overhead costs in competition with online retailers and has led Best Buy to abandon this strategy in Canada.