Am I missing something?

I just came across this item from WSJ online: Best Buy Founder Gets Green Light to Pursue Buyout. I’ve long been a Best Buy customer — it is typically my go-to store for need-it-right-now purchases of not-too-exotic electronics items. Lately, the firm has been having financial trouble, consistent with the now-familiar story of bricks-and-mortar succumbing to online competition.

What’s interesting is that Richard Schulze (the original founder of 46 years ago) is considering buying back the company as part of a turnaround effort. This is interesting because, as a strategy scholar, I cannot help but wonder what, exactly, he thinks he can do to return the firm to health that couldn’t be done without him. According to this article, his plan is: cut prices to be competitive with online retailers like Amazon.com, improve the customer experience, and avoid cost reductions. Am I missing something or does this sound akin to making up for negative margins with increased volume?

Stay tuned.

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One Comment on “Am I missing something?”

  1. stevepostrel says:

    What’s also funny is that the board brought in a non-retailing guy with a big pay package to do the turnaround. It’s amazing how orderly liquidation and/or shrinking a company down to its equilibrium niche never seem to be strategies contemplated until the bankruptcy cliff is just ahead.


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