Intersect Investment Benchmarking

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Intersect Investment Benchmarking University of Phoenix MBA/520 February 5, 2009 Instructor: Bill Owens Intersect Investment Benchmarking Introduction Best Buy Best Buy had rapid growth since being established as Sound of Music, Inc in 1966. Richard M. Schulze opened a home and car stereo store in St. Paul, Minnesota, five years later; he bought his partner out and began to expand. In, 1983, the company’s name was changed to Best Buy Co., Inc and shortly after he introduced the superstore format (Funding Universe). In 1985, Best Buy was taken public, raising $8 million through an IPO, and within two years obtained a listing on the New York Stock Exchange (NYSE). In two years Best Buy revenues grew to $239 million from just 24 stores. Best Buy continued the rapid growth reaching over $1.6 billion in revenue in 1993. Schulze continued to provide the consumer with what they wanted offer a larger variety of high-tech products, merchandise grouped in departments, i.e. home theatre, “high-touch” areas for digital product that required more employee interaction as well as registers throughout the store (Funding Universe). Because of the rapid growth of Best Buy experience by added 212 stores in a five-year period, they experienced many organizational and logistical challenges. In 1997, Gibson was hired to help fix the organization and logistical problems that the company is experiencing. Gibson stated “the company needed to foster more collaboration in its hypercompetitive sales culture and implement a common operating platform for its stores.” The change was a positive direction for the company, later that year the gross margins started to increase (The Deal). Starbucks Starbucks was first known as Seattle’s Pike Place Market, which three teachers opened in 1971. In 1982 Howard Schultz joined as director of retail operations and marketing, and the company quickly grew into a large corporation. Starbucks went public in 1992 and experienced enormous growth...