Sample Essay on PESTEL Analysis of Best Buy

PESTEL Analysis of Best Buy

A PESTEL analysis of Best Buy can be used to analyze macro and remote environment within which this company operates in order to identify factors that can impact on its performance and competitiveness. Basically, PESTEL or PEST analysis refers to a tool that is employed before performing a SWOT analysis. It informs a company about market trends that shape the demands of customers making them capable of impacting on the future sales of a company.

A comprehensive PESTEL analysis of Best Buy

Best Buy Inc. is a specialty consumer electronics retailer in the United States. This company accounts for 19 percent of the entire market with operations in Canada, Mexico, Turkey, United Kingdom and China. Its subsidiaries include Magnolia Audio Video, Greek Squad, Future Shop and Pacific Sales.

Here is a comprehensive PESTEL analysis of this company:


Best Buy engages in different activities with an aim of promoting political organizations and candidates. However, in the United States, making corporate contribution directly to candidates of different political parties as well as committees is prohibited in certain states as well as at the federal level. Companies are only allowed to make contributions individually on behalf of the parties and candidates. The company has to comply with laws that relate to political contributions while making contributions to political parties that have interest in the industry’s wellbeing.


Most operations of this company are in the United States where there are no hidden economic conditions. Best Buy operations have no doubt been affected by the recent economic slowdown and the company is facing challenges that relate to consumers at various market points. Consumer behaviors have undergone long lasting and dramatic changes because of this economic slowdown. Consumers will need more time so that they can adjust to new realities. Because of the 2008’s economic conditions, Best Buy required its employees to voluntarily leave the firm. With this strategy, the company was able to settle down within the market to some levels. Towards the end of 2008’s fiscal year, the revenue of this company indicated a remarkable stability as well as consistency which proved the decision to reduce the workforce right.


Best Buy engages in effective community and social-related initiatives. For instance, it has a Children’s Foundation whose aim is to support local communities through grant programs. It also encourages teens to speak up for themselves through a program known as @15. The goal of this program is to empower teens in order to enhance their educational status and relationships at school, engage them in community activities and to nurture skills that will help them professionally.


The company uses the latest technology and gadgets to increase the customer base. It has a future proofs program that enables customers to choose the technology to use on the basis of their requirements. It also keeps up to date with the latest technologies. Additionally, it uses website encryption to secure customer transactions. Other technologies that the company uses include click stream which enhances the security of transactions while giving shoppers a better experience.


Since the company was considered as a firm that engages in unethical deforestation within Canada, it has engaged in a Greener together program which increases the production of energy efficient products while reducing waste levels through the use of recyclable packaging as well as disposing systems.


The company has personal and corporate policies and procedures that enhance better relationships with employees and customers. This was after a law suit was filed against it in 2005 in the US District Court in California. The firm enhances equal opportunities in all stores while complying with the set laws of the state, federal and local governments.

What makes PESTEL analysis of Best Buy important?

PESTAL analysis of Best Buy informs the management while formulating business strategies. For instance, an increase in taxes that are charged on alcohol, high rate of unemployment, growing concerns on environmental issues and health consciousness are some of the factors that can affect the performance and competitiveness of this company by affecting its sales. The management can consider such external factors in order to formulate strategies and policies that will enable the company to overcome them.

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