Best Buy 2002 Annual Report Download - page 5

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Living our Values
To explain how we lead, I would like to
address our core values, which have driven
our culture of innovation. Throughout our
36-year history, we have been guided by this
core set of values. We place importance on
having fun while being the best. We seek
to learn from challenge and change. We
understand the need to act with respect, humil-
ity and integrity. We believe in unleashing the
power of our people.
Because we strive for excellence and
embrace change, we can do more than
simply grow. We also foster innovation. That
is a prime reason why we have been able to
establish and maintain our leadership in the
retail industry.
Fostering Innovation
Examples of our innovation are many.
Consider our demand forecasting systems,
which enabled us to finish a robust holiday
selling season with strong in-stock levels.
Our advertising effectiveness systems help us
maximize the efficiency of our marketing
budget and predict with a higher degree
of accuracy how our Sunday circular will
impact sales the following week. Our supply
chain management enables us to plan for
model transitions, to avoid markdowns and
to launch new products as soon as they
become available.
Our knowledge management systems allow
our 90,000 employees to share information
about everything from car stereo installation
tips to selling techniques. Thanks to our
leadership in these key competitive areas, we
now set the benchmark for our industry in
financial strength as well, affording us the
flexibility to invest for future growth and to
return fully 1.5 percent of our pretax earnings
to our communities.
The skill sets, processes and systems we have
built – which we call our “structural capital” –
are important not only to the future success
of Best Buy stores, but to the vitality of
our acquired businesses. The centerpiece of
our strategy is a continued expansion of our
Best Buy stores, including 60 new U.S. stores
per year for at least the next four years, as
well as comparable store sales gains. That
base serves as a strong foundation to the next
part of our strategy: namely, extending our
leadership into new spaces by leveraging our
structural capital.
Best Buy Co., Inc. 3
1998 1999 2000 2001 2002
Return on Average
Common Equity
Our return on equity compares favorably
with that of other national retailers.
1
7
.0%
2
7
.6%
32.6%
2
7
.1% 26.3%