Joly's 5 point plan for turning around company. Giving all of you longs a head start before I comment on my thoughts :
Joly listed these five points as the company's priorities. He called the plan "Renew Blue."
1. Reinvigorate the customer experience. Best Buy's plans include offering customers unique benefits and exclusive membership programs, and continuing to develop a "leading edge, multi-channel shopping experience through a highly relevant and contemporized hub-and-spoke network."
2. Attract and grow "transformational leaders" and energize employees to deliver "extraordinary results."
3. Work with vendors to innovate and "drive value."
4. Increase the company's return on invested capital by growing revenue and efficiency. This includes cutting "unproductive" costs, such as administrative and non-product expenses.
5. Making the world a better place through recycling effort and providing teenagers with access to technology.
1. The "hub and spoke network", online ordering, pick up at store with a muti-channel shopping experience. Many doing that: Walmart, Home Depot,Target, and BBY for awhile now. Problem is, BBY store doesn't carry many items online and has to ship to store first. Why not just have it shipped to your door instead? You don't need to be home. You can't find the $4 HDMI cable at store or many other cheaper items. You don't need a trip to store and wait for your order located and waste more of your time and fuel.
It's the convenience and price factor of many non-emergency items that is killing the gazillion sq ft ELECTRONIC stores and their high overhead that goes with it.
2. "Attract and grow "transformational leaders" and energize employees to deliver "extraordinary results." .......
Very noble. Sounds like every retailer's "Mission Statement".
3. Work with vendors to innovate and "drive value."....
lol. As opposed to what?
4. "Increase the company's return on invested capital by growing revenue and efficiency."
Translation: Cut the fat, and run lean. Another "corporate speak". Good luck transitioning gargantuan to smaller and growing revenue!
5. 'Making the world a better place through recycling effort and providing teenagers with access to technology.'
Wow, if I submitted that plan on one of my papers back in Biz Admin. class to my professor, he would have said, " Now, c'mon Hollyanna you are going to renew a dead biz model by WHAT!? Did you just actually say that? Go back and come up with something a little more creative."
holly, BBY is an enterprise. It's what the overall business is doing. Sales were indeed flat which is not negative, might it be the stemming of a tide? On-line is part of the business and maybe there are certain things they won't deliver to your door? I just ordered a new laptop and they did give me the choice of delivery to a store or to my door.
Here is more thought for you - BTW, he already accomplished one of his important preliminary goals. You should also see some of his interviews, too:
Now let me be clear, we are determined to turn around the performance of the company. And on November 13, we outlined the priorities that we are focused on to turn around and transform our Domestic business including, number one, reinvigorating and rejuvenating the customer experience by putting the customer at the center of what we do, addressing their needs and providing superior value to them. This means both improving our execution, as well as working on reinventing the business. And number two, increasing our return on invested capital with an unrelenting focus on revenue growth, efficiency and disciplined capital allocation.
Our view is that we have ample opportunities to improve ROIC by improving the operational performance of our business and capturing key market opportunities in our space. We are confident that we can enhance the return on our existing assets by increasing the revenue they produce and taking out unnecessary or unproductive costs.
In the short term, of course, we are also focused on making the holiday season successful. We know that 3/4 of Americans intend to give customer electronics -- excuse me, consumer electronics as a gift for the holidays. Tens of millions will be coming to us online and into our stores between now and the end of the season, and we are ready for them. There's a range of exciting new products to buy at Best Buy, including Windows 8 and other new computing products, new phones, new tablets, new game releases and a new gaming platform, the Wii U. We are also expecting to see a positive impact for this holiday from significantly ramped up Blue Shirt training, the introduction of variable bonus pay for performance for full-time sales associates, as well as our holiday Price Match strategy.
I have been with Best Buy for 11 weeks, and I am excited by the opportunity to turn around and transform Best Buy and solve the 2 problems we highlighted last week: negative comps and declining margins. I am pleased with the progress we've made in the last few weeks in setting a clear direction, building the team at the top and mobilizing our organization around our priorities. I know that this will be a high growth, and I look forward to successfully tackling our challenges and our opportunities. And in doing so, our team will be guided by the investment thesis we shared with you last week.
Number one, Best Buy is the market leader in a growing fragmented market; number two, we have a unique platform to deliver a multichannel shopping and customer experience; number three, Best Buy has significant operational opportunities to enhance returns with improved retail execution and cost-reduction opportunities; number four, Best Buy has the opportunity to rejuvenate the customer experience in the company, as the preferred authority and destination for technology products and services; number five, Best Buy has the ability to stabilize and then improve its comps and its operating margin with a strong cash flow generation; and six, Best Buy has a results focus management team committed to delivering improved performance.
Thank you very much for your attention and your support as we to move forward. I will now turn it over to Jim.