Watch the video case study “Geek Squad: A New Business for a New Environment.” – please see below link for video – http://highered.mheducation.com/sites/0077861035/student_view0/chapter3/video_cases.html
Read the case study discussion on pp. 88-89 of the Marketing text. Keep this case study in mind as you complete this assignment. –please see attached document for case study
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Write a 1,050-word report using your company or one with which you are familiar (if you prefer, your facilitator can assign one to you). Answer the following questions for your chosen organization. – COMPANY I WOULD LIKE TO USE IS NIKE OR APPLE YOU CAN PICK
- Explain what the specific key environmental forces are that created an opportunity for your company.
- Identify if there have been changes in the purchasing patterns of your organization’s target market in recent years.
- Conduct an environmental scan for your chosen company to identify key trends. For each of the five environmental forces (social, economic, technological, competitive, and regulatory), identify trends likely to influence your company’s marketing efforts and product offering in the future.
- Explain what differentiation strategy your company should undertake to encourage their target market to choose them over other competitors.
- Analyze what lessons you might learn from the Geek Squad case study.
Include at least three references, at least one of which must come from the University Library.
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.
THE COMPANY The Geek Squad story begins when Stephens, a native of Chicago,
passed up an Art Institute scholarship to pursue a degree in computer science. While
Stephens was a computer science student he took a job fixing computers for a research
laboratory, and he also started consulting. He could repair televisions, computers, and a
variety of other items, although he decided to focus on computers. His experiences as a
consultant led him to realize that most people needed help with technology and that
they saw value in a service whose employees would show up at a specified time, be
friendly, use understandable language, and solve the problem. So, with just $200,
Stephens formed Geek Squad in 1994. Geek Squad set out to provide timely and
effective help with all computing needs regardless of the make, model, or place of
purchase. Geek Squad employees were called “agents” and wore uniforms consisting of
black pants or skirts, black shoes, white shirts, black clip-on ties, a badge, and a black
jacket with a Geek Squad logo to create a “humble” attitude that was not threatening to
customers. Agents drove black-and-white Volkswagen Beetles, or Geekmobiles, with a
logo on the door, and charged fixed prices for services, regardless of how much time
was required to provide the service. The “house call” services ranged from installing
networks, to debugging a computer, to setting up an entertainment system, and cost
from $100 to $300. “We’re like ‘Dragnet’; we show up at people’s homes and help,”
Stephens says. “We’re also like Ghostbusters and there’s a pseudogovernment feel to it
like Men in Black” In 2002, Geek Squad was purchased by leading consumer electronics
retailer Best Buy for about $3 million. Best Buy had observed very high return rates for
most of its complex products. Shoppers would be excited about new products, purchase
them and take them home, get frustrated trying to make them actually work, and then
return them to the store demanding a refund. In fact, Best Buy research revealed that
consumers were beginning to see service as a critical element of the purchase. The
partnership was an excellent match. Best Buy consumers welcomed the help. Stephens
became Geek Squad’s chief inspector and a Best Buy vice president and began putting
a Geek Squad “precinct” in every Best Buy store, creating some stand-alone Geek
Squad Stores, and providing 24-hour telephone support. There are now more than
20,000 agents in the United States, Canada, the United Kingdom, and China, and return
rates have declined by 25 to 35 percent. Geek Squad service plans are also being sold
on eBay and in some Target stores. The Geek Squad website proclaims that the
company is “Serving the Public, Policing Technology and Protecting the World.” THE
CHANGING ENVIRONMENT Many changes in the environment occurred to create the
need for Geek Squad’s services. Future changes are also likely to change the way Geek
Squad operates. An environmental scan helps illustrate the changes. The most obvious
changes may be related to technology. Wireless broadband technology, high-definition
televisions, products with Internet interfaces, and a general trend toward computers,
smartphones, entertainment systems, and even appliances being interconnected are
just a few examples of new products and applications for consumers to learn about.
There are also technology-related problems such as viruses, spyware, lost data, and
“crashed” or inoperable computers. New technologies have also created a demand for
new types of maintenance such as password management, operating system updates,
disk cleanup, and “defragging.” Page 89 Another environmental change that contributes
to the popularity of Geek Squad is the change in social factors such as demographics
and culture. In the past many electronics manufacturers and retailers focused primarily
on men. Women, however, are becoming increasingly interested in personal computing
and home entertainment and, according to the Consumer Electronics Association, are
likely to outspend men in the near future. Best Buy’s consumer research indicates that women expect personal service during the purchase as well as during the installation
after the purchase—exactly the service Geek Squad is designed to provide. Our culture
is also embracing the Geek Squad concept. For example, in the recently discontinued
television series Chuck (2007–2012), one of the characters worked for the “Nerd Herd”
at “Buy More” and drove a car like a Geekmobile on service calls! Competition,
economics, and the regulatory environment have also had a big influence on Geek
Squad. As discount stores such as Walmart and PC makers such as Dell began to
compete with Best Buy, new services such as inhome installation were needed to create
value for customers. Now, just as change in competition created an opportunity for
Geek Squad, it is also leading to another level of competition as Staples has introduced
EasyTech services and Office Depot has introduced Tech Depot services. The economic
situation for electronics continues to improve as prices decline and demand increases.
Consumers purchased 2 million 3D TVs in 2010, and sales of all consumer electronics
exceeded $180 billion. Finally, the regulatory environment continues to change with
respect to the electronic transfer of copyrighted materials such as music and movies
and software. Geek Squad must monitor the changes to ensure that its services comply
with relevant laws. THE FUTURE FOR GEEK SQUAD The combination of many positive
environmental factors helps explain the extraordinary success of Geek Squad. Today, it
repairs more than 3,000 PCs a day and generates more than $2 billion in revenue.
Because Geek Squad services have a high profit margin they contribute to the overall
performance of Best Buy, and they help generate traffic in the store and create store
loyalty. To continue to grow, however, Geek Squad will need to continue to scan the
environment and try new approaches to creating customer value. One possible new
approach is to create new partnerships. Geek Squad and Ford, for example, have
developed a partnership to help consumers install in-car communication systems. In the
future, Best Buy will offer 240-volt home charging stations for Ford’s electric vehicle, the
Focus. Geek Squad will offer electrical audits and residential installations for the car
owners. Geek Squad is also using new technology to improve. Agents now use a
smartphone to access updated schedules, log in their hours, and run diagnostics tests
on clients’ equipment. Best Buy is also testing a “Solutions Central” desk, similar to the
Genius Bar concept in Apple stores, and staffing it with Geek Squad agents. Finally, to
attract the best possible employees, Geek Squad and Best Buy are trying a “results-only
work environment” that has no fixed schedules and no mandatory meetings. By
encouraging employees to make their own work-life decisions, the Geek Squad hopes to
keep morale and productivity high. Other changes and opportunities are certain to
appear soon. However, despite the success of the Geek Squad and the potential for
additional growth, Robert Stephens is modest and claims, “Geeks may inherit the Earth,
but they have no desire to rule it!”