News and Analysis

Best Buy CEO Resigns. Now what?

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In case you were too busy posting pictures on Instabook or Facetagram, the CEO of Best Buy has resigned. This caused a lot of discussion and some weird stock fluctuations.

Bruce Upbin at Forbes says he felt Dunn had to quit, citing the famous Downes article on why Best Buy was going out of business.

My take?

  • The departure of CEO Dunn indicates that Best Buy plans to keep making massive shifts and is at least vaguely aware they have to. We haven’t seen it all yet.
  • Dunn’s background is telling. He literally worked his way up from sales associate in 1985 to CEO. He’s experienced – but also he may have been tragically old-school. Wether he can’t move with the times or his replacement is symbolic . . . his replacement is symbolic if you get my drift.
  • Best Buy is going to be fighting public opinion here since their challenges, cuts, and now this make them look quaintly old-school. This could be another case of a tarnished brand – and that’s a challenge they’ll have to overcome.
  • Best Buy’s challengers are many – sure there’s Amazon and Apple, but they were – and are – being nickeled and dimmed by others. Streaming replaces DVDs, DLC replaces in-store game purchases, Target is expanding to be an everything store, and you can still get your fancy appliances at a number of different places. There is, simply, no reason for Best Buy to exist as a unique entity.
  • The kiosk-like approach to stores may be viable, however. If they can leverage a few big warehouse stores and a lot of “starlets,” get some brand awareness, and find the right niches/services they may make it.
  • That being said, I see one advantage they may have being service, and it hasn’t been too impressive.
  • I still wonder what they can do in the age of vending machines for tech. I just don’t see them taking advantage of that.

In the end, I’ve got a gut feel that Best Buy is going to fade away in a Radio Shack like way. I can see a way out, but until I see what Dunn’s replacement does, I’m not going to count on it.

Now, ask what happens if they fade into obscurity. Who’s going to get blamed? Who will others target? Who will step into their place?

– Steven Savage

Facebook Buys Instagram

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Unless the rock you’re living under lacks the internet (unless your destiny is a rock), you’ve heard that Instagram was bought by Facebook.

I’m trying to figure out the point of this really.  Some are worried that Instagram may stop being multi-network capable, but that issue’s already been addressed.  At the same time, it does give Facebook enhancements to it’s photo sharing capacity, and maybe they figure it can’t hurt to branch out beyond themselves.

But $1 billion?  I don’t know.  I look for any input from you guys out there, because I’m stumped.

– Steven Savage

Here Come The Sony Job Cuts

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Looks like 10,000 people are being cut.  You can get more details here at layoffwatch.

Takeaways

  • Issues with the Japanese economy and the TV market seem to be a big part of this.
  • This is not the first time Sony has done big layoffs – in fact they’ve done some with selloffs and consolidation recently.  I’d say this is more of a trend.
  • The cuts are, obviously, in the display area.  Half the cuts are unspecified – so get ready for politics.
  • Some execs are being asked to return their bonuses.  This may be an act to force contrition and look like accountability – which I buy.  So I think Sony has an image concern.
  • Considering Sony’s reach this could affect various Geekonomic-heavy cities/areas, so pay attention.

– Steven Savage