Business Strategy

 -Five Forces Analysis (Lauren Pluta)

Five Forces	High, Medium, Low
Bargaining Power of Customers	High
Threat of Substitution	Medium
Bargaining Power of Suppliers	High
Threat of Entrants	Low
Rivalry	High

 

·  Bargaining Power of Customers

In this industry the bargaining power of customers is high. Customers are offered cheaper alternatives from overseas that can be easily purchased and shipped quickly. Customers are quick to research the best quality and prices with the power of online shopping and customer reviews and have access to products and manufacturers world wide. Where they chose to spend their money results in the power of bargaining. 

·  Threat of Substitution

This threat is medium considering that Bed, Bath, and Beyond is a trustworthy household name and a familiar brand to most. Although, the threat of substitution is medium because distributors like Amazon sells bedding, silverware, dishes, and all of the other merchandise BB&B sells and can offer faster online shopping and shipping and a larger variety in products.

·  Bargaining power of Suppliers

Suppliers have a high bargaining power because if suppliers increase purchase values then it reflects the store increasing their selling values. As we’ve discussed in threat of substitution, there's many other products and brands at the fingertips of these consumers and with an increase of pricing due to suppliers, BB&B would lose many customers. On the contrary, if BB&B partnered with cheap suppliers, they would have the choice to lower their prices or to make more profit, therefore leaving the bargaining power high to suppliers.

 

·  Threat of Entrants

Due to the popularity of this industry, it would make it really hard for a new company to enter and succeed. This market has a lot of competitors already because these are popular household items, basic necessities, linens, and appliances which make it an industry packed with million dollar companies that will quickly over power any new threat of entrants. 

·  Rivalry

Some huge competitors consist of JCPenny’s, Boscovs, Lowes, and Macy’s are just some of the largest competitors in this industry making rivalry high. Many department stores dedicate an entire section to these products and are able to purchase massive shipments in bulk to distribute products at the lowest prices across the industry. This keeps Bed, Bath, and Beyond always fighting to stay relevant and affordable to compete with their rivals. 

This industry is profitable due to the constant need of new bedding, kitchen accessories, linens, and seasonal décor. Consumers are always looking to decorate, renovate, and stay up to date with new products that BB&B sells. Although rivalry is high in this market, a low threat of entrants gives BB&B a way to stay on top of the industry in addition to continuously selling new designs, ideas, and products. BB&B must keep prices affordable due to competitors like Amazon and suppliers from oversea countries like China. With the ability to shop online, customers can find the cheapest prices in the matter of minutes. Acknowledging these five forces will allow BB&B to stay relevant and affordable, making it a top competitor in the industry. 

 

-Competitive Strategy 

The competitive strategy that Bed Bath and Beyond follows is the lowest price across the industry because the company sells their products at a low cost compared to their competitors. It is across the industry because they offer products on clearance including savings coupons at all times and includes variety of products in a changing market. It addresses the threats from the five forces because bargaining power of customers, threat of substitutes, bargaining power of suppliers, threat of new entrants, and rivalry all determine the competitive landscape of Bed Bath and Beyond. Since this company is already well known in this industry it creates a trust worthy location to purchase house goods and linens from. By following this low price strategy, BB&B can compete with cheep online prices while also having an advantage of having a familiar name. In addition, their frequent emails with coupons, savings, and sales, encourages costumers to shop in stores instead of resorting to online. This way consumers know the quality of the products being sold along with receiving the lowest industry prices.

How Bed Bath and Beyond uses Information systems

Bed Bath and Beyond uses information systems to support their competitive advantage with a “Buy-Online-Pick-Up in store'' model that would see less contact with people in store and also saves costs allowing them to provide the lowest prices in their industry. It is the company's new method of outbound logistics. This new method of shopping for customers has increased due to the pandemic but it is also a quick and easy method of shopping which can be called hassle free. Bed Bath and Beyond also applies Information systems for its diversified product assortment in stock made available by advanced Inventory systems powered by Relex solutions making over 95% on items in stock and available to the customers compared to competitors, in compliance with the large assortment of products they also keep up with new trends. Large retailers including Kroger carry Bed Bath and Beyond products, expanding the reach and customer acquisition'

Value Chain (Jordy Lujan)

    Inbound Logistics - This process includes receiving, storing, and disseminating inputs to the products of Bed Bath and Beyond. In their fiscal year ending in February of 2022, from 4,600 unnamed suppliers and their ten largest suppliers accounted for approximately 23% of their total purchases. Due to the companies recent troubles paying their suppliers, they currently do not hold any long-term contracts with any vendors.

    

    Operations/Manufacturing - This process includes transforming inputs into the final products that make it out to the shelves of the store or published online. Much of the merchandise brought in from inbound logistics is marketed via the app, social media, and website to push sales.

    

    Outbound Logistics - This process involves collecting, storing, and physically distributing products to clients. Bed Bath and Beyond has adopted a new way to get products out to customers in their cars. They call it, "Buy-Online-Pick-Up in store" option, and this is done both via the app as well as the Bed Bath and Beyond website.

    

    Sales and Marketing - This process involves inducing buyers into purchasing products and providing a means for them to do so. Bed Bath & Beyond is known for having some of the lowest prices in the industry. Offering clearance sales as well as additional discounts in coupons offered to customers physically and electronically. A rewards system was also implemented for those customers who come in regularly to shop. 

    

    Customer Service - This process involves assisting customers use of products while simultaneously maintaining and enhancing product value. Bed Bath and Beyond offers customer service via their online website as well as social media. The company is very good about responding to customer questions both in store as well as online (e.g. social media below.)

*Oracle Cloud is a new system adopted to improve the omnichannel retail experience for clients. Adopted during the Covid-19 pandemic, it helped to enhance a new strategy in outbound logistics of "Buy-Online-Pick-Up in store". Although, it was a quick fix solution for the pandemic, it has become a main stay for those customers who still prefer to have their products brought to them. Along with a solution for Outbound Logistics, it also assisted in Inbound and Operations/Manufacturing making it easier for inventory management.