Best Buy: Fire This Advertising Agency Now!
use our stores as a showroom to get your items from someone else.
CHEAT SHEET Analysis: Does A-Level Management Run the Advertising Division?
One of the core components of our CHEAT SHEET Investing Framework asks us to investigate whether A-Level managers are jockeying the horse. No matter how thoroughbred a horse, the jockey is critical to success.
Given that a home-gamer such as myself can spot a damaging message in Best Buy’s advertisement, I must conclude the advertising division is as much a mess as the rest of the C-Suite. The company appears caught off guard by the rapid and obvious transition to ecommerce — so much so, the ads and expensive advertising agency are not sensitive enough to whether they are encouraging showrooming, the practice of testing products at a bricks and mortar store like Best Buy, then actually purchasing the item online from a company such as Amazon (NASDAQ:AMZN) or eBay (NASDAQ:EBAY).
How Will This C-Suite Red Flag Affect the Stock?
Clearly, Best Buy is going to sell stuff during the holiday season. However, the advertising fumble signals a company still lost at sea. Therefore, don’t be surprised if after the holiday season these blunders are more impactful to the shares. At best, this ad is evidence the stock has more obstacles to face in the near-term.
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