International Growth
Why expand globally?
International expansion has two important facets. It gives us access to more growth opportunities, and it gives us access to a globe of talent, ideas and new perspectives. Both, we believe, are important for us to accelerate our growth in an increasingly global economy.
International growth isn't easy.
We think that success requires a recognition that we haven't figured it all out. Like you, we've watched a lot of outstanding companies struggle with international expansion. While the pitfalls vary, we believe a common theme across all of these failures is a cut-and-paste approach: "If it works here, it can work there." That simply isn't true, and although we certainly make mistakes, we believe that our focus on serving the needs of unique customers gives us a leg up as we expand globally.
Fueling faster growth.
We believe it's essential that we have the broadest, most diverse perspective possible on customer needs. What we learn in China can improve our business in Canada and the United States — and vice versa. By connecting human beings around the globe with one common vision — to improve the lives of our customers — we believe we can learn faster. More access to new ideas in different markets, we think, fuels faster growth.
We're growing at a measured pace. Each new market requires a deep understanding of the customer needs, and that isn't done overnight. We view our international expansion as a marathon, not a sprint.
It began with Canada.
Our international journey began with the acquisition of Future Shop, Canada's leading consumer electronics retailer, in 2001. We learned a lot from that experience, including how to operate two brands in one country as well as how to build international capabilities — such as supply chain, IT and sourcing — that serve us well as we expand into other parts of the world.
Then we went to China.
In 2003, we entered China with our first global sourcing office in Shanghai — leading to the introduction of great, innovation products, breakthrough brands and competitive pricing for our U.S. and Canadian customers. At the same time, we began to transform Best Buy into a more customer-centric company.
By relying on the ingenuity of our employees and truly understanding the needs and aspirations of our customers, we learned how to create great experiences and relationships. We developed an insatiable appetite for customer satisfaction — and we think that has global appeal and can help us succeed around the world.
Building on our sourcing office presence, in 2006, we acquired a majority stake in Five Star, giving Best Buy an immediate retail presence in China. At the beginning of 2007, we opened our first Best Buy-branded store in Shanghai, providing the Chinese consumer with a different kind of consumer electronics shopping experience than what was previously available in the local market. In 2008, we opened our second Best Buy store in China and received government approval for four additional new stores, all of which are expected to open in early 2009.
We expanded into Europe.
In 2006, we started working with The Carphone Warehouse, Europe's leading mobile phone retailer to bring our Best Buy Mobile stores to the States and our Geek Squad services to Europe. In 2008, we expanded our relationship into a joint venture, acquiring a 50-percent interest in the retail and distribution business of The Carphone Warehouse. Through the joint venture, we will continue to grow The Carphone Warehouse's existing retail business; introduce Best Buy stores, services and websites in select European markets, beginning in 2009; and apply The Carphone Warehouse's expertise to help grow and differentiate our U.S. store experience.
Where will we go next?
Today, we're preparing to open our first stores in Mexico and Turkey. We believe we have a good business model and a clear sense of the kind of employees we need and the culture we want to create in our stores. In the months to come, we'll share more information about these new stores and how we're building a base of loyal customers in Mexico and Turkey.
