BESTBUY NEW

SERVICE
STRATEGIC BUSINESS
IYAYI EMMANUEL | VANINI CLAUDE
MD ARIFDEVELOPMENT
HOSSAIN | ABDELRAHMAN RAGAB
SAHAN DE SILVA
 Content

01 02 03
Background As-Is To-Be Strategy

04 05
M&A Plan Valuation
 01
Background
Internal & External Analysis
Canada
Locations

Mexico

US
 Fig: GDP per capita in the US (2000-2023)

Fig: Unemployment rate in the US

Fig: Consumer electronic market growth in the USA
 Strategic Business Segments
Computer + mobile 18.191
phones

Consumer 13.04
electronics

Appliances 6.381

Entertainment 2.786

Services 2.149

Others 0.247

Domestic gross 9.106

profit
 Market Participants

Walmart Amazon Target

• Largest retailer ranked • Market Leader in E- • Revenue $104.4 Billion in
19th Commerce US
• Revenue $459.5 Billion • Revenue $217.8 Billion in • 1954 stores in USA
in USA USA

• 11500 stores in 27 • Main KPI is CEM

countries

https://www.statista.com/statistics
 Market Participants

Asurion Micro Centre Ubreakifix

•Top supplier of insurance
and extended warranties
• Revenue $3 Billion in USA
• Partnership with Best Buy
• Specialist in consumer • Specialist for electronics
electronics like computer, repair solution
laptop • Revenue $520 Million in
• Revenue $866 Million in USA
USA

https://growjo.com/company/
 Market share

4.12% 14.53% 3.1% 7.7%

Micro Centre Asurion Amazon Walmart
 Customer Analysis

Leadinghome appliance retailers in the United States in 2019 and 2022 (based on a 1,000 point scale), by
https://customer.guru/net-promoter-score/best-buy customer satisfaction
 Customer criteria for electronic
service-offering retailer selection
Entertainment Products Domestic Appliances Consumer Electronics

Eco-friendly initiatives
Quality and reliability
Online and offline presence
Customization & personalization services
Trade-in & upgrade programs
Technical expertise
Extended warranties and protection plans
Installation and setup services
Customer service & support
Availability of accessories and spare parts
Product reviews & recommendations
Price & value for money

0 % 1 0% 2 0% 3 0% 4 0% 5 0% 6 0% 7 0% 8 0% 9 0% 00 %
1
 Customer preferences when it comes to choosing a channel to
access service offerings

100% 90%
90% 85%
80%
80%
70% 65%
60% 55%
50%
50% 40%
40%
30%
20%
10%
0%
rt e ns s t
es rt
o c ce en c o
pp an tio ur m rvi pp
su is
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re s u so a g s e
to as ns re ng d ot
s co ce e se m
In
- i ne e vi p a e
nl n e r ap t-b R
O
P ho lf-
s
ile en
Se ob tm
M o in
A pp
 Usage patterns of channels
preferred by customers

Consumer In Store Support

Electronics Online Assistance Channels

Domestic
In-store Support
Appliances
Phone Consultation

Online Assistance Channels

Entertainment
In-store Support
Products
Phone Consultation
Identifying  Tailor Best Buy’s
Customer channels
Preferences  Customer-centric
approach
 Financial Performance
BestBuy Key Financials
60.00

50.00

40.00
Amount in Billions

30.00

20.00

10.00

-
FY2019 FY2020 FY2021 FY2022 FY2023

Key Metrics by Year

Revenue Gross Profit SG&A EBIT

Operational Performance
 Operational Performance
Number of stores Retail Square Footage
1,260 45,000
1,240
1,220 44,000
1,200
43,000
1,180
1,160 42,000
1,140
1,120 41,000
1,100
1,080 40,000
2019 2020 2021 2022 2023
39,000
Number of stores 2019 2020 2021 2022 2023
Retail channel performance data research contains
 02
As-Is
Markets, Positioning and
Future Scenarios
 Competitive Positioning

Company's Total revenue (in Market share

name MILLIONS $) (%)

Best Buy 2300 10.95238095

Asurion 3051.5 14.53095238

Microcenter 1865.2 8.88190476

UBreakiFix 520.3 2.47761905

Total market 21000

share
Intensity of competition
 Market Life Cycle Phase
Life-cycle​ Embryonic​ Growing​ Mature​ Aging​

Market growth​ ​ ​ ​ ​

Market ​ ​ ​ ​
volume potential​
Market ​ ​ ​ ​
share distribution​
Production ​ ​ ​ ​
capacity​
Technology focus​ ​ ​ ​ ​

Impact of costs​ ​ ​ ​ ​

Total​ ​ ​ ​ ​
Market Attractiveness
Competitive Positioning
Strategy Path
 Market trends

Rise of e- Artificial
commerce Intelligence
Investing in e-commerce Developing AI-powered
capabilities solutions

Augmented and Right-to-repair

Virtual Reality movement
Integrating AR/VR Supporting the right-to-repair
technologies movement
 Future Scenarios
Scenario 01 Scenario 02
qCollaborate with AR and
VR technology firms to
qUtilize both AI-driven
develop AR-powered self-
diagnostics and AR
repairing services since
powered self-repair
inadequate existing AR
services
developments.
qLeverage on both
qUtilize AI-powered
technological
solutions such as repair
developments to achieve
diagnostics, chatbot
market growth.
support, and personalized
solutions.

Reference Scenario Alternative Scenario

1- Reference Scenario
2- Alternative Scenario
 Future Scenarios cont.
Scenario 01
 High market growth since technological advances in both AI, AR, and VR
 Right-to-repair movement
 There are mobile and other electronic players that have already penetrated the services and
repairing market: Apple, Huawei, Samsung, MSI, Dell, etc.
 With above market players there will be serious competition in the marketplace since customers will
tend to use the repair services of their own brand
 Will be hard for Best Buy to penetrate the conventional repair market thus Best Buy must improve its
self-services featured with AI, AR, and VR to differentiate itself in the marketplace
 03
To-Be Strategy
Blue Ocean, Resources and
Management
 VISION & PURPOSE

V
Humanize and
P
Revolutionize the way customers engage with
personalize technology by offering comprehensive self-repair
technology for support. Through accessible education, tools, and
every stage of resources, we aim to empower individuals to take
life. control of their technology and enhance their
overall experience.
PRIORITIES & RESULTS

Increased Customer
Customer Empowerment and
Engagement/Education. enhanced customer
satisfaction.
PRIORITIES & RESULTS

Platform High growth rate of

Optimization subscriber base, cost
reduction and revenue
growth.
PRIORITIES & RESULTS

Reinvigorated brand based

Brand on successes, attract a
Awareness wider and younger
audience.
BALANCED SCORECARD
BALANCED SCORECARD
BALANCED SCORECARD
BALANCED SCORECARD
 Strategic project management Cont.
Targeted marketing campaigns
• Identifying and targeting specific
customer demographics with personalized
messages and creative content
• Marketers, creatives, data analysts, and
campaign managers
Customer feedback system
implementation
• Choosing an appropriate feedback
platform, designing feedback collection
procedures, assessing customer data, and
responding to alleviate customer
complaints
• Customers, employees, and managers
Competitive pricing analysis
• Analyzing market trends and
competitors' pricing to make informed
pricing decisions that ensure
competitiveness and profitability
• Marketers, pricing analysts, and data
scientists
UIUX and functionality
enhancement
• Conducting user research, identifying
pain points, prioritizing adjustments, and
employing user-centered design concepts
• Designers, developers, and product
managers
 Strategic project management Cont.
Referral system development and
launch
• Developing and launching a referral
system to encourage customers to refer
others and generate new business.
• Marketers, product managers, and
customer service representatives
Self-repair platform enhancement
• Incorporating user-friendly
troubleshooting capabilities, providing
extensive self-help materials, and
regularly updating the platform based on
customer feedback
• Engineers, product managers, and
customer support representatives
Conduct process analysis and
optimization
•Identifying inefficiencies in current
procedures, optimizing workflows to improve
efficiency and reduce costs, tracking process
performance and identifying areas for further
improvement
•Process analysts, business stakeholders, and IT
professionals
Platform content updates
• Updating platform content to provide
accurate and engaging information to
users by content creators, editors, and
marketers
• Content creators, editors, and marketers
 Strategic project management Cont.
Course module development
•Developing engaging and interactive course
modules that meet the learning objectives of
the course, by tracking student engagement
with modules
•Instructors, instructional designers, and
developers
Employee career / wellbeing
development programs
•Evaluating employee skills, providing training
and development, supporting work-life
balance, and establishing a supportive work
environment
•HR personnel, managers, and employees

Customer feedback integration

(process optimization
•Analyzing customer feedback data,
discovering areas for improvement,
incorporating input into decision-making
processes, and setting changes in place
•Customer feedback analysts, product
managers, and customer service
representatives
 Project Portfolio Management
Strategic Fit Self-repair platform enhancement

Targeted Marketing campaign

Employee career/wellbeing development

UIUX and functionality enhancement

Customer feedback system implementation

Competitive price analysis

Course module development Customer Feedback integration (Process opt)

Conduct process analysis and optimization
Referral system development & launch
Platform Content Updates

Short term(0-1 year) Mid term(1-2 years) Long term(more than 2 years) Project duration
 UIUX Frontend 10FTE
Target Self-repair
marketing enhancement Software development 10FTE
campaign platform
Order Management 20FTE

F&A Systems (finance and accounting) 15FTE

Employee’ UIUX and
career / Well functionality
Product Info/Content (PIM) 10FTE
being enhancement
development
Skills and capacities needed

Strategic product fit

 CAPEX ALLOCATION (IN $M)
Total capex $46
budget %2

Maintenance $34.50
capex %75

Legal capex %5 $2.30

Project budget $9.20

%20
 F.T.E
FTE

Number of hours 8

Number of 5
days/week

Weeks/year 52

Total 2080

Number of days/year 260

Total 10400

FTE/year 5
SKILLS AND CAPACITIES
ALLOCATION
 04
M&A Plan
Deal and Processes
Setup and Concept of M&A
 Contact & Non-Binding Offer
Form Form a core team

Determine Determine a strategy to approach the target

Contact Contact the target

Sign Sign a nondisclosure agreement (NDA) and letter of intent (LOI

Receive Receive a confidential information memorandum (CIM)

Analyze Analyze the CIM and prepare a detailed business model

Conduct Conduct pre-due diligence.

Prepare Prepare a non-binding offer (NBO)

Obtain Obtain board approval

Send Send the NBO

 diligence and the creation of a binding offer process

1 Structuring Transaction 2 Carry out Due Diligence

3 Visit Data Room and Analysis

4
Conference with Management
and Site Visits 5 Finalize Business Plan and
Financial Structuring 6 Equity Story

7
Create Binding Offer and after
Board Approval
 Merger and Acquisitions Deals and Processes
Amalgamation Assessment Financing Documentation
scheme’ preparation

Negotiations, signing and closing Due diligence

Signing Final petition for

approval
 05
Valuation
Buyer and Seller Perspectives
$279M $527M
Seller Perspective Buyer Perspective
SELLER PERSPECTIVE
 PROJECTIONS
iFixit Sales, COGS and Gross Profit Projec- iFixit SG&A and EBIT Projections
tions 60.00
180
50.00
160
140 40.00
120
100 30.00
80
20.00
60
40 10.00
20
0 0.00
2023 2024 2025 2026 2027 2023 2024 2025 2026 2027

Sales COGS Gross Profit SG&A Series2 Series3 EBIT

 PROJECTIONS
iFixit Key Metrics iFixit Projected Discounted Rate Curve
180 1.20
160
Amount in Mio. Euro

140 1.00
120
100

Discounted Rate
80 0.80
60
40 0.60
20
0 0.40
2023 2024 2025 2026 2027 2028ff
Years 0.20

0.00
13 12 12 11 11
Sales COGS Series3
Gross Profit Series5 SG&A Net Present Value
Free Cash Flow
 TARGET SYNERGIES

+3
-5% -4%
%
Marketing Procurement Admin
(Sales (COGS) (SG&A)
Growth)
BUYER PERSPECTIVE
 Thanks!
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