.
Intense Competition to Constrict Margins.
The competition in electronic retailing has increased over the years as discounters, merchants, and online retailers are trying to obtain parts of the market share. Since there has been a large dependency on new product creation, the consumer electronic industry has increased in competition. Fostering brand loyalty is even more difficult since many retailers compete only on price with undifferentiated products (Kallstrom, 2015). This affects certain products more than others, like televisions and cameras. Without a niche or increases in scale, it is difficult for Best Buy to compete with a low-cost business such as Wal-Mart. Another problem is that online retailers have taken bold actions to occupy the market share, which was something that Best Buy once had above its suppliers. In addition, as buyers progressively adopt digital dissemination, many of Best Buy's competitive advantages such as brand name and retail location may fade away. In addition, companies such as Microsoft and Apple may become competitors of Best Buy as they enhance their retail carriers. The company is also susceptible to the quickly changing technological trends within the retail sector, for example, buyers shifting from home computers to mobile devices. .
2. Technological.
Higher Penetration of Private Labels.
One of the distinct elements for electronic wholesalers is their portfolio of private brands. Best Buy provides consumers with a variety of exclusive brands that include Dynex, Platinum, Insignia, and Rocketfish. The company currently administers its global sourcing facility in China which aims to innovate, design, test, and acquire its own personal line of licensed brands (Dawes, 2003). Nearly all of the licensed brand products that the company offers are constructed under agreements by Asian based vendors. The company aims to increase their sales of these exclusive brands as a way to improve their company sales.
