Best Buy's Exit From China: What Went Wrong?

Shih-Fen Chen, Shaofei Wang, Feng Guan, Sida Gao

Product #:9B18M042

Supplier:Ivey

Discipline:General Management

Setting:United States, 2014

Details:Case (PDF) • 15 pages • 2018-03-20

Industries:

Goods, trade, and consumer services

Geography:

United States North America

Your Price:

$9.71

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In 2014, Best Buy Co., Inc. (Best Buy), the U.S. electronics retailer that had entered the Chinese market in 2003, announced that it was pulling out of China. The company had replicated in China the entry strategy that had worked well when it entered Canada. Ironically, Best Buy's operating model was also imitated by its domestic rivals in China, in a case of the students driving the teacher out of the market. What actually went wrong with Best Buy's China strategy?

Learning Objectives

After working through this case, students will be able to do the following: â€¢ Understand the complexity of international expansions, particularly in target countries that differ substantially from home. â€¢ Analyze the need for local adaptation to foreign environments, particularly in the industry of appliance retailing. â€¢ Determine what went wrong in Best Buy's China strategy. â€¢ Apply the lessons of Best Buy to other scenarios of international expansions.