Best Buy Co., the largest consumer electronics retailer in the world, is famous for its giant 40,000 square-foot “big-box” stores. This channel has served Best Buy well over the years as the end of the first decade of the Twenty-first century, Best Buy made a channel design decision that focused on adding a retail channel consisting of much smaller 3,000 square-foot stores to its large-store channel. The new smaller stores will be located in shopping malls as well as in urban downtown venues. Best Buy designed this new small-store channel structure mainly to do a better job of reaching the still-growing market for mobile phones, especially smart phones. These smaller stores will sell almost one hundred different phones as well as the services of nine carriers. Do you think Best Buy’s channel design decision is a good one? What other channel design options might Best Buy have pursued to accomplish its distribution objective?
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