I Told You So…
Wednesday, December 17th, 2008This is, unashamedly, my I told you so post.
A year ago, in most of my classes, and in conversations with other leaders, I made the assertion that “Best Buy is in trouble–deep trouble–and they don’t even know it.” My rationale was simple. Last Christmas, they were competing on big-ticket items, mostly televisions and surround-sound entertainment systems. The problem with that strategy was that it alienated the very market share that built the company: People interested in small-ticket electronics and media. Rather than pointing out “We’re a great place to buy that small, $20 Christmas gift,” they unintentionally sent the message, “don’t come if you don’t have a load of money and a truck to haul away your purchases.”
The leaders at Best Buy started strangling their business more than a year ago, and 2007 November sales were around $228 million. This year, they were $52 million. They might never have made up the business that they lost, but their strategy alienated their fall-back markets.
Attention, Leaders. You need to learn to read your business and your markets. The fact that I could read Best Buy’s problems a year ago suggests that this kind of thing is knowable. And if it is knowable, the leaders are accountable for it.