best buy's art of war - electrical appliance suppliers

In the classic Chinese war strategy that guides the art of war, craft is the key to winning.
"All wars are based on deception," Sun Tzu wrote . ".
Best Buy, ranked first in the United StatesS.
E-retailers, by putting on their own clothes, took a page out of Sun's book ---
Specifically, the new store-chain brands--
To advance business in a prosperous and complex market away from home.
In January, Best Buy launched its own brand in China, opening a store in Shanghai, the Minnesota chain said it had quickly become the top 50 in revenue.
Best Buy, located in the heart of the busiest shopping district in China's business center, is Best Buy's first branch outside North America and the largest. The U. S.
Chain aims to highlight the latest gadgets and in-
Make it easier for shoppers to compare store displays for prices of different brands.
Staff wear blue Best Buy shirt in the same style as the USS.
Many displays and posters are bilingual in both Chinese and English.
However, for all the hustle and bustle, Best Buy has not opened any one yet --
Brand stores in China began early this year.
By contrast, Gome, China's largest electronics retailer, has 684 stores in 168 cities in China and says it will enter as many as 10 new cities in the second half of August. (
Best Buy has 880 stores in China. )
Best Buy's real move in China is to buy domestic brands.
Redmond Yang, president of Best Buy China and chief operating officer of Best Buy Asia, said: "I believe the brand will be distinguished by the target audience . ".
For this reason, Best Buy bought a 75% stake in China's third-largest electronics company last year.
Jiangsu Five-star home appliance chain, priced at $0. 18 billion.
The chain has 140 electronics stores in some of China's fastest regions. growing second-
First-tier cities in seven provinces;
Sales rose 22% year-on-year to $2 last year. 4 billion.
Best Buy is not satisfied with the five-star stop;
He said the company is looking for more acquisitions and more sales channels for its products.
"Future Best Buy is more than just a retail consumer electronics business," said Yeung, noting that it acquired the US Pacific sales kitchen and bathroom center for $0. 41 billionS last year.
"Nothing can stop us," he added, engaged in non-electronic business in China.
Considering that the party is already very late, the way best buy makes sense.
Two domestic-listed rivals Gome and Suning Appliance have saturated many major cities across the country from ubiquitous locations in the past few years;
Best Buy's own brand is considered a premium entrance and is slow to launch, with its newer products attracting relatively wealthy cities.
"Mergers and acquisitions make sense to them, and as they head-to-head --to-
"The heads of Chinese leaders stores will be very tough," said Brenda Lee, who is in charge of Shanghai's Daiwa Securities retail stock business.
At the same time, other foreign entrants such as Wal-Mart
Mart has the same idea, even if it costs $36 billion, it's not easy (Annual income)Best Buy.
"They have to be creative and it may take a while," Li said . ".
"It makes sense to look at other types of retail lines.
"A good move is to recruit Mr. Yang, 54, from China clothing retailer Port International, a pioneer in selling local clothing to wealthy customers.
The recruitment in April reflects another solar proverb: Get your competitors caught off guard.
Best Buy chose an executive who was not even a consumer electronics expert, instead of turning to mainland rivals. But it thinks it can expand its business to people in other countries in the region.
Alfred Chan, CEO of the port company, believes that as a business leader who can work in Western and Chinese business culture, his former colleagues have a good prospect.
"He is a good businessman with a business mind.
I am sure he will make a valuable contribution.
"Now, Yang has a full plate at home.
"China's retail industry is still in its infancy," the Shanghainese asserted 20 years ago when he returned to China, from an office overlooking the glittering Shanghai financial district.
The risk is great.
At this time, when the United StatesS.
China's retail spending rose 17% year-on-year in August, the fastest growing year in three years.
Continued prosperity and government efforts to encourage consumer consumption suggest that this trend will continue.
Since 1990, private competition among state-owned Chinese retailers has intensified, and companies such as Gome and Suning have gained a foothold.
Today, they compete with the largest government chains, with more than 70% of their market share combined in some cities.
Suning's market value of $13 billion is already 60% of Best Buy;
Gome is a quarter.
The bosses of both companies are billionaires.
Under the impetus of entering the stock market, the integration of the decentralized consumer electronics industry is very active.
Last year, Gome bought China Paradise, the third-largest company, for $0. 677 billion.
By late, Best Buy was at least ahead of the US. S.
Rivals such as Electric City, Radio Shack, do not have any stores in China.
It also benefits from close contact with US suppliers. S.
For example, Panasonic launched 103 this month-
Inch plasma TV on the Chinese market only has best buy in Shanghai.
But Best Buy is packed with red tape, which may drag the opening time to at least six months;
Land acquisition in big cities is also difficult.
E-product suppliers who have established close ties with Suning and Gome are unlikely to reduce too much slack in pricing for Best Buy --term customers.
So it makes sense to acquire and separate branding methods.
What is good for Best Buy is its own economic strength.
In addition, the company was founded in 1966, called "Voice of Music", and in 2001 it piloted its China strategy in Canada by acquiring an electronics chain future store.
It also retains the Pacific Sales name in 14 stores in the California Transformation Center.
The five-star goal is to increase store and sales by 20% to 30% over the next five years.
Founder Wang Jianguo said he chose Best Buy after getting approval from the Chinese government to list his relatively small company overseas. "Our (small)
"Scale is becoming a bottleneck in development," he said . "
Best Buy said he was interested in investing, and Wang decided to bet on his management advantage.
Today, as the senior vice president of Best Buy in China, Wang Jianlin continues to run the five-star in Nanjing. he is on the phone with Yang Zhiyuan every day.
The two, 180 miles apart, meet once a week.
Five stars have entered fast-
The emerging provinces of Zhejiang and Jiangsu near Shanghai.
Yeung said this provides ready-made market research for Best Buy.
Given that Best Buy will focus on "the latest and best", five stars will continue to roll out appliances and white appliances.
"We will distinguish between the two brands," Yeung said . ".
Still, Best Buy is trying to shift some of the principles that make it so successful at home to five stars.
It has transformed three stores, including one sales deskon-
Help customers who want advice on buying a few household items, not just one.
It is also working to upgrade its portfolio to bring better profitability and sales to individual stores.
"This is where you make money," Yeung said . ".
In contrast, rival Gome said its sales per square meter fell by 12% per year in the first half of this year.
Comparable store sales increased by only 0.
From 6% in the first half of 2006.
Nevertheless, the appearance of five stars is far from Best Buy's headquarters in Shanghai or stores in North America: The store logo of five stars in Wuxi near Shanghai "improves the quality of life and creates social value . "
"The store still allows manufacturers to focus their goods on a square ---
Traditional Chinese way-
Which one does Yang want to change?
Best Buy usually puts a big price tag on the product section, allowing various brands to compete with each other.
Anything sold by a salesperson is subject to commission.
"Even if manufacturers don't like it, they won't promote any specific brand," Yeung said . ".
Best Buy is training employees through communication to bridge both cultures.
"We don't have competitors like Canada or the United States. S.
We can draw expertise or resources from it . "
"In China, you have to create from scratch, and you have to do it yourself if you want something.
"To this end, Yang Zhiyuan is working on a plan to build a college that trains retail managers.
As a result, with Best Buy opening its own stores in wealthy cities, Best Buy will soon gain experience as a mass carrier in China.
At this point, the company also took another Sunshine lesson: "While we have heard of stupid haste in war, cleverness has never been linked to long delays.