Business Finance
BBA4951 Columbia Southern Business Implementation Plan Strategy Paper

BBA4951

Columbia Southern University

Question Description

  1. Implementation Plan: Part 1
    • What does the strategy, mission, and organizational structure say about the company?
    • What are the positive aspects of the strategy, mission, and organizational structure?
    • What are the company’s short-term and long-term goals?
    • What are ways to improve the strategy, mission, and organizational structure?

During Unit IV, VI, and VIII, you will be working on an implementation plan for a business. The components within these three units combined will create this plan.

Please take a look at the case studies located in your textbook. There are multiple corporations that provide a large array of services and products. Please select an organization that interests you. You will use this company for the Unit VI and Unit VIII assignments, as well.

For Part 1, describe the company that you selected, the products/services they offer, and the history of the company. Next, analyze the company’s strategy, mission, and organizational structure. In your analysis, include the following:

Much of the information you will need to complete this segment can be found in the case study in the textbook. However, you are welcome to conduct further outside research as needed. Some details, such as the short-term and long-term goals, may not be explicitly stated. Please use your best judgement and analytical skills to determine that information.

Your project must be a minimum of two full pages in length, not including the title and reference pages. Include an introduction paragraph.

See attached for parts II (template for part II also atatched) and III as well as three case studies to chose from for this project. You must use the same case study for all three projects.

Unformatted Attachment Preview

1. Implementation Plan: Part 2 In Unit IV, you started to create an implementation plan. You selected a company and analyzed their strategy and mission. In Unit VI, we will continue your work with this company and develop a SWOT analysis. Remember that a SWOT analysis identifies strengths, weaknesses, opportunities, and threats of an organization. This is an important analysis for any organization as it can be used for strategic planning. Your SWOT analysis must be a minimum of two pages in length. Once you have completed your SWOT analysis, write a minimum of one page, explaining how this information could be used by the company. Please use the attached template to complete the SWOT analysis and explanation. Save the template using your last name and student ID. For example, John Smith whose student ID is 12345 would save his assignment as Smith12345. The information you need to complete this analysis can be found in the case studies located in your textbook on pages 372- 636. Outside research is not a requirement. Name: ____________________________________ Company Name: _____________________________ SWOT Analysis Strengths Internal Your name Opportunities External 1 Weaknesses Internal Your name Threats External 2 How the above information will be used: Your name 3 Implementation Plan: Part 3 For the final assignment of this course, you will continue your work with the company you used in Unit IV and Unit VI. For the Unit VIII Project, you will complete the final components of your implementation plan. For Part 3, you will focus on the following points: • • • •  internal and external issues,  competition,  future outlook for the organization, and  implementation of tools for measuring business success. Much of the information you will need to complete this segment can be found in the case study in the textbook. However, you are welcome to conduct further research as needed. For the future of the organization, you may be creative and add your own insight on where you see the company going. Your project must be a minimum of three full pages in length, not including the title and reference page. Make certain to include an introductory paragraph. Best Buy Co., Inc., 2014 www.bby.com , BBY Headquartered in Richfield, Minnesota, Best Buy Co., Inc. is the world’s largest consumer electronics retailer with 1,400 stores that carry phone products, computers, televisions, appliances, cameras, and much more. In addition to its product line, Best Buy also offers service contracts, extended warranty, and product repair. Best Buy Co., Inc. is the parent company of Best Buy, Five Star, Future Shop, Pacific Sales, Geek Squad, CinemaNow, Magnolia Audio, and The Phone House stores. With 165,000 full-time employees, Best Buy is struggling to reinvent itself amid fierce competition from Apple and Amazon. A huge problem for Best Buy is that people shop there to get educated and then buy online at cheaper prices. The brick-and-mortar business model is in severe trouble, especially for retailers that do not sell perishable goods (such as Best Buy and RadioShack). With the popularity and cost effectiveness of online shopping, coupled with a lack of sales taxes and not having the expense of operating large stores, online retailers have a huge competitive advantage. Best Buy stores serve as showrooms for online retailers. Best Buy has expensive long-term leases on its buildings and those leases must be honored, unless the firm goes into bankruptcy, which some analysts say is inevitable, especially without a clear strategic plan going forward. Best Buy’s fiscal 2013 ended on February 1, 2013. Copyright by Fred David Books LLC. (Written by Forest R. David) History Founded in Saint Paul, Minnesota, in 1966, Best Buy (then named Sound of Music) was started by Richard Schulze and Gary Smoliak. After acquiring two small stores in 1967, the Sound of Music went public in 1969, and enacted an employee stock option plan. By 1970, the Sound of Music hit $1 million in annual revenues. The name Best Buy first originated in 1981 after a tornado hit a store in Roseville, Minnesota, resulting in a major sale dubbed as “Best Buy,” which subsequently became an annual event, and in 1983 Sound of Music officially changed its name to Best Buy Co., Inc. After the name change, Best Buy increased average store selling space and began offering a wider range of products, many of them at discounted prices. During the 1990s, Best Buy continued to grow, hitting the $1 billion mark in annual revenues. Best Buy launched bestbuy.com in 2000 and acquired the Canada-based electronics chain Future Shop in 2001. Future Shop still operates under its original name and still operates independently from Best Buy. Best Buy acquired Geek Squad, the 24-hour computer support taskforce in 2002 and opened its first Canadian Best Buy store in Ontario in the same year. In 2006, Best Buy’s common stock closed at an all-time high of $59.50 and in 2008 the chain opened its 1,000th physical store in the Mall of America, one of the largest malls in the world, located in Bloomington, Minnesota. Best Buy continued international expansion in 2008 by opening stores in Puerto Rico, Mexico, and Shanghai, China. In 2009, the company opened stores in Turkey and the United Kingdom. Best Buy planned to expand heavily into the United Kingdom (UK) when the company hired Brian Dunn as its CEO. Dunn had started at Best Buy 25 years previously as a salesperson and was widely liked by all rank-and-file workers at the time of the appointment because they viewed Dunn as “one of their own.” Sluggish growth of sales in the United Kingdom led to Best Buy closing 11 Best Buy Europe stores in 2011. Best Buy CEO Brian Dunn resigned in 2012. Less than a month later, founder and chairman Schulze was forced to resign, partly because he did not reveal that CEO Dunn, who is married, had an inappropriate relationship with a 29-year old subordinate female employee, which is violation of the company’s Code of Ethics. Dunn allegedly misused company funds in conjunction with the relationship. Schulze was replaced by Hatim Tyabi in mid-2012. George Mikan III became Best Buy’s CEO in late 2012. Schulze, age 71, offered about $10 billion or $25 per share to buy Best Buy and take the company private. He already owns 20 percent of the company’s stock. Shareholders and analysts are skeptical of Schulze’s offer. In August 2012, Hubert Joly was hired as CEO, but the company’s stock was down another 10 percent in response to the announcement. Vision and Mission Best Buy does not have a written vision statement. The company’s mission statement is as follows: Our formula is simple: we’re a growth company focused on better solving the unmet needs of our customers—and we rely on our employees to solve those puzzles. Thanks for stopping. Organizational Structure Best Buy currently uses a divisional-by-geographic region organizational structure. As noted in Exhibit 1, the company has a chief administrative officer rather than a chief operating officer for the divisional heads to report. Segments Best Buy operates under two distinct business segments: domestic and international. The domestic segment includes all states, districts and territories of the USA, including Puerto Rico. The international segment includes all of Canada, China, Mexico, and Europe. Best Buy reports domestic revenues of $33.3 and $37.6 billion in fiscal 2013 and 2012, respectively, and international revenues of $11.7 and $11.9 billion in 2013 and 2012, respectively. For 2013, approximately 26 percent of total revenue was from domestic operations. Despite Best Buy claiming and presenting data based on geographic region, it is possible that Best Buy is in fact a strategic business unit (SBU) structure with the two geographic regions serving as the two distinct SBUs. However, the executive titles provided in Exhibit 1 suggest a purely divisional-by-geographic structure rather than an SBU. Domestic There were 1,056 U.S. Best Buy stores at fiscal year-end 2013, and 409 U.S. Best Buy Mobile Stand-Alone stores. During fiscal 2013, Best Buy closed 47 U.S. Best Buy stores while opening 105 U.S. Best Buy mobile stand-alone stores. Within the domestic segment, Best Buy further breaks down the SBU by products and services and assigns employees to distinct leadership teams for each respective product and service. Teams are empowered to determine the most effective ways to market products and services through Best Buy’s channels, retail stores and online, and call centers. Further, Best Buy breaks down its domestic SBU into six different revenue categories: consumer electronics, computing and mobile phones, entertainment, appliances, services, and other. Consumer electronics includes items such as TVs, e-Readers, navigation products, cameras, mp3 players, musical instruments, home theater systems, and much more. Computing and mobile phone segment includes items such as: notebook and desktop computers, tablets, monitors, phones, phone subscription plans, storage devices, printers, and random office supplies. Entertainment segment includes video gaming hardware and software, DVDs, CDs, and computer software. Best Buy’s appliances category includes both large and small household appliances. The service category includes: service contracts, extended warranties, product repair, installation of home theater systems, and much more. Exhibit 2 reveals the percentage of revenue in each domestic product arena. Note all the negative numbers. Exhibit 2 reveals that consumer electronics has been in a steady decline for each of the last two years. Much of the decline can be attributed to soft market for TVs and the overall declining prices of TVs. The overall TV market is much weaker than the most recent 5.4 percent decline indicates because this number would have been much worse if not for the high customer interest in e-Readers. At fiscal year-end 2013 (March 1, 2013), there were 872 Carphone Warehouse stores and 1,517 Phone House stores in Europe, while in Canada there were 140 Future Shop stores, 72 Best Buy stores, and 49 Best Buy Mobile stores. In China there were 211 Five Star stores, and in Mexico there were 14 Best Buy stores. Computing and mobile phones experienced a 6-percent increase in same-store sales from fiscal 2011, primarily from tablets and mobile phones. EXHIBIT 1 Best Buy’s Organizational Structure EXHIBIT 2 Best Buy’s Revenue by Product Consumer electronics Computing and mobile phones Entertainment Appliances Services Other Total Revenue Mix by Product (%) Fiscal Year End February March March 2011 2012 2013 37 36 18 Same-Store Sales (%) Fiscal Year End February March March 2011 2012 2013 (6.3) (5.4) (7.0) 37 40 61 3.6 6.0 (0.3) 14 5 6 1 100 12 5 6 1 100 4 10 7 (-) (13.3) 7.0 0.5 (16.3) 10.6 (0.6) — (1.6) (13.4) 2.9 (1.3) — (2.5) (3.0) Source: Company documents. The entertainment segment continues to experience significant same-store declines as a result primarily of the decline in the video gaming industry and decline in sales of music and movies because many more people are downloading music offline and watching movies through outlets such as Red Box, Netflix, and Time Warner Cable’s movies on demand. Best Buy attributes the increase in appliances to promotional sales, but the slowly improving housing market in some parts of the country could explain this increase. International The United Kingdom and Ireland only have Carphone Warehouse stores, whereas mainland Europe only has the Phone House Stores. Canada is home to Future Shop, Best Buy, and Best Buy Mobile stand-alone stores. China is the exclusive home to only Five Star stores. In fiscal 2013, Best Buy introduced its Best Buy Express concept in Mexico. Best Buy Europe opened 122 new stores in fiscal 2013 while closing 126 other stores. Outside the USA and Europe, Best Buy opened 40 new stores and closed 21 in 2013. Internal Issues Statement of Ethics and Governance Best Buy has a detailed Code of Ethics on its website, addressing the culture at Best Buy, outlining ethical behavior expected of all constituents of Best Buy, and detailing how to report violations of ethical behavior. In the wake of the embarrassing resignation of Dunn and Schulze’s dismissal, the current Code of Ethics provided on Best Buy’s website (several months after the dismissals) begins with a letter from former Dunn addressing the code and thanking all employees and constituents of Best Buy for their ethical behavior. In 2010, two years before the ethical fiasco with Dunn and Schulze, research company Management CV Inc., disclosed several questionable issues, which as of 2012 are still an ongoing problem according to Management CV Inc. For example, Best Buy paid Schulze $1 million in 2011 to rent two stores he owned with one of these leases running through 2018. Schulze’s daughter, the founder of Best Buy Children’s Foundation, currently works as both the chairwoman and CEO of this foundation with a base salary of $242,000 and bonuses of approximately $120,000 annually. Her husband also has worked with Best Buy. A contract with Phoenix Fixtures, Schulze brother’s business, has led to spending more than $70 million in fixtures for stores from 2008 to 2012. In addition, Best Buy has paid close to $4 million for chartered aircraft owned by Schulze Trust. The questionable ethics is not limited to the Schulze family either because there have been many contracts between Best Buy and businesses that have connections with Best Buy board members. EXHIBIT 3 A Breakdown of Best Buy Stores March 2010 Best Buy Best Buy 1,069 74 Total Stores at Year End February March 2012 2011 1,099 1,103 177 305 March 2013 1,099 177 Mobile stand alone Pacific Sales Magnolia Audio Video Geek Squad Total Domestic Segment Stores 35 6 35 6 34 5 35 6 6 1,190 — 1,317 — 1,447 — 1,317 Source: Company documents. Properties Exhibit 3 below reveals a three-year trend for domestic stores in each of Best Buy’s various segments. Many customers do not even know Best Buy’s traditional stores offer mobile devices and service plans. At fiscal year-end 2013, Best Buy had 1,503 domestic stores, up from 1,447 the prior year—and had 2,876 international stores, up from 2,861 the prior year. Exhibit 4 reveals the top-five markets based on store count in the domestic segment, and Exhibit 5 reveals the total number of stores in the international segment. Suppliers Best Buy’s largest supplier is Apple, followed by Samsung, Hewlett-Packard, Sony, and LG Electronics, which together represent 45 percent of total merchandise purchased. Best Buy could possibly be subject to significant revenue reductions if any one of these top five suppliers were unable to or chose not to continue to provide products to Best Buy. Best Buy does not have longterm contracts with suppliers, but the company does not foresee any problems in the future with suppliers not being able to meet the demands of Best Buy. Without long-term contracts, Best Buy is more flexible regarding which suppliers to do business with, but the fact is a supplier such as Apple is also a competitor and could potentially crush Best Buy if desired. EXHIBIT 4 Number of Best Buy Stores in the Five Top U.S. States (Fiscal 2012) State California Texas Best Buy Stores 126 110 Best Buy Mobile Standalone Stores 29 25 Pacific Sales Stores 31 — Magnolia Audio Video Stores 3 — Florida Illinois New York 67 58 55 — — — 30 14 13 — — — Source: Company documents. EXHIBIT 5 Number of Best Buy Stores Outside the USA Best Buy Europe Canada Future Shop Best Buy Best Buy Mobile standalone China (Five Star Only) Mexico (Best Buy Only) Total Total Stores at Year End March 2010 February March 2012 March 2013 2011 2,371 2,357 2,393 2,357 144 146 149 146 64 4 71 10 77 30 71 10 158 166 204 166 5 6 8 6 2,746 2,876 2,861 2,756 Source: Company documents. Finance EXHIBIT 6 Best Buy’s Income Statements Fiscal Years Ended Revenue Cost of goods sold Restructuring charges—cost of goods sold 11 Months Ended 12 Months Ended February 2, January 28, March 3, February 26, 2013 2012 2012 2011 (unaudited recast) $ 45,085 $ 46,064 $ 50,705 $ 49,747 34,435 34,693 38,113 37,197 1 19 19 9 Gross profit Selling, general and administrative expenses Restructuring charges Goodwill impairments Operating income (loss) Other income (expense) Gain on sale of investments Investment income and other Interest expense Earnings (loss) from continuing operations before income tax expense and equity in income (loss) of affiliates Income tax expense Equity in income (loss) of affiliates Net earnings (loss) from continuing operations Gain (loss) from discontinued 10,649 9,502 11,352 9,339 12,573 10,242 12,541 10,029 450 34 39 138 822 1,207 1,207 — (125) 772 1,085 2,374 18 55 55 — 33 37 37 43 (112) (121) (134) (86) (186) 743 1,043 2,331 231 622 709 779 (4) (3) (4) 2 (421) 118 330 1,554 1 (295) (308) (188) operations (Note 4), net of tax of $(2), $83, $89 and $65 Net earnings (loss) including noncontrolling interests Net earnings from continuing operations attributable to noncontrolling interests Net loss from discontinued operations attributable to noncontrolling interests Net earnings (loss) attributable to Best Buy Co., Inc. shareholders Basic earnings (loss) per share attributable to Best Buy Co., Inc. shareholders Continuing operations Discontinued operations (420) (177) 22 1,366 (22) (1,378) (1,387) (127) 1 130 134 38 $ (441) $ (1,425) $ (1,231) $ 1,277 $ (1.31) $ (3.38) $ (2.89) $ 3.51 0.01 (0.45) (0.47) (0.37) Basic earnings (loss) per share Weightedaverage common shares outstanding (in millions) Basic Diluted $ (1.30) $ (3.83) $ (3.36) $ 3.14 338.6 338.6 372.5 372.5 366.3 366.3 406.1 416.5 Source: 2013 Form 10K, p. 60. All amounts in millions of U.S. dollars except per share amounts. EPS, earnings per share. EXHIBIT 7 Best Buy’s Balance Sheets February 2, 2013 Assets Current Assets Cash and cash equivalents Receivables Merchandise inventories Other current assets Total current assets Property and Equipment Land and buildings Leasehold improvements Fixtures and equipment Property under capital lease Less accumulated depreciation Net property and equipment Goodwill Tradenames, Net Customer Relationships, March 3, 2012 $ 1,826 $ 1,199 2,704 6,571 946 12,047 2,288 5,731 1,079 10,297 756 2,386 775 2,367 5,120 113 4,981 129 8,375 5,105 8,252 4,781 3,270 3,471 528 131 203 1,335 130 229 Net Equity and Other Investments Other Assets Total Assets Liabilities and Equity Current Liabilities Accounts payable Unredeemed gift card liabilities Accrued compensation and related expenses Accrued liabilities Accrued income taxes Short-term debt Current portion of longterm debt Total current liabilities Long-Term Liabilities Long-Term Debt Contingencies and Commitments Equity Best Buy Co., Inc. Shareholders’ Equity Preferred stock, $1.00 — par value: Authorized— 400,000 shares; Issued and outstanding—none Common stock, $0.10 par value: Authorized—1.0 billion shares; Issued and outstanding—338,276,000 and 341,400,000 shares, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive income Total Best Buy Co., 86 140 522 $ 16,787 403 $ 16,005 $ 6,951 428 $ 5,364 456 520 539 1,639 129 596 547 1,685 288 480 43 10,810 1,109 1,153 8,855 1,099 1,685 — 34 34 54 — 2,861 112 3,621 90 3,061 3,745 Inc. shareholders’ equity Noncontrolling interests Total equity Total Liabilities and Equity 654 3,715 $ 16,787 621 4,366 $ 16,005 Source: 2013 Form 10K, p. 61. All amounts in millions of U.S. dollars except per share amounts. EXHIBIT 8 ...
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Final Answer

Good morning! All parts done! Looking forward to working on part 4 and the final project. Lemme know if you need further inputs. Thank you! Have a colorful day ahead!

Running head: UNDER ARMOUR IMPLEMENTATION PLAN

Under Armour Implementation Plan Part 1
Name
Date

1

UNDER ARMOUR IMPLEMENTATION PLAN

2

Under Armour Implementation Plan Part 1
Introduction
Under Armor is one of the leading sportswear manufacturers in the United States of
America. The company was established in 1996 by a former athlete-Kevin Plank- who realized
that there were problems with the clothing that the athletes used at the time. Plank was not
impressed with the t-shirts that athletes used at the time where the t-shits soaked sweat and
became soggy. The plan had an idea of coming up with a t-shirt that would whisk sweat away
and leave the athletes feeling comfortable. Over the years, Under Armor has experienced
massive growth. It is currently supplying kits to some of the letting sporting organizations at
home and in Europe. Apart from apparel, the company also produces footwear and accessories
for all groups of people. Due to its brilliant business strategies and creative leadership, the
company has been in a position to scale the heights of success and presented a high level of
competition to the traditional giants in the industry.
Brief History of the company
Under Armour was formed in 1996 by Kevin Plank, a former athlete. During his time in
sports, Plank notices that they had to change their t-shirts frequently during games because they
absorbed sweat and became extremely wet and that made them uncomfortable. However, Plank
noticed that the shorts remained fairly dry, but the t-shirts were affected. Plank decided to design
a new compression t-shirt that would not absorb the sweat (Kraft & Lee, 2009). Since the launch
of the apparel in 1996, the company has grown tremendously and is currently supplying kits to
top sporting organizations in both America and Europe. Today the company has contracts with

UNDER ARMOUR IMPLEMENTATION PLAN

3

some leading organizations such as the Major League Basketball, the National Basketball
Association and Tottenham Hotspurs Football Club among others.
The products of Under Armour
Under Armour Manufactures, promotes supplies and sells a wide range of Products.
While a lot of people recognize the company for its production of sporting apparel, it also
produces footwear and accessories. It produced items that are for men, women and children.
Under Armour Mission statement
At its creation, Under Armour's Mission statement was to "to make all athletes better
through passion, design, and the relentless pursuit of innovation." From this mission, it is evident
that the primary focus of the company is to use innovation to improve the experience of athletes.
Under Armour Business Strategy
Since Under Armor does not have any fabric or process patents, the company focuses
heavily on improving its brand image, trademarks and copyrights to increase its competitive edge
in the market. In this strategy, while other companies are capable of developing products that are
similar to those of Under Armour, it tries very hard to beat them on the grounds of the strength of
the brand and trademarks. In this regard, the company aim...

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