Best Buy 2011 Annual Report Download - page 15

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could cause a decrease in revenue or an increase in inventory markdowns or certain operating expenses, which could
materially adversely affect our results of operations.
Other conditions or factors that may impact our results of operations include disruptions to the availability of content such
as sporting events or other televised content. Such disruptions may influence the demand for hardware that our customers
purchase to access such content, as well as the commissions we receive from subscription services. Accordingly, such
disruptions could cause a material adverse effect on our revenue and results of operations.
If we do not anticipate and respond to changing consumer preferences in a timely manner, our operating
results could materially suffer.
Our business depends, in large part, on our ability to successfully introduce new products, services and technologies to
consumers, the frequency of such introductions, the level of consumer acceptance, and the related impact on the demand
for existing products, services and technologies. Failure to accurately predict constantly changing consumer tastes,
preferences, spending patterns and other lifestyle decisions, or to effectively address consumer concerns, could have a
material adverse effect on our revenue, results of operations and reputation with our customers.
Our results of operations could materially deteriorate if we fail to attract, develop and retain qualified
employees.
Our performance is dependent on attracting and retaining qualified employees who are able to meet the wants and needs
of our customers. We believe our competitive advantage is providing unique end-to-end solutions for each individual
customer, which requires us to have highly trained and engaged employees. Our success depends in part upon our ability
to attract, develop and retain a sufficient number of qualified employees, including store, service and administrative
personnel. The turnover rate in the retail industry is high, and qualified individuals of the requisite caliber and number
needed to fill these positions may be in short supply in some areas. Our inability to recruit a sufficient number of qualified
individuals in the future may delay planned openings of new stores or affect the speed with which we expand initiatives
related to the connected world, our exclusive brands and our international operations. Delayed store openings, significant
increases in employee turnover rates or significant increases in labor costs could have a material adverse effect on our
business, financial condition and results of operations.
We face strong competition from traditional store-based retailers, internet-based businesses, our vendors
and other forms of retail commerce, which could materially adversely affect our revenue and profitability.
The retail business is highly competitive. We compete for customers, employees, locations, products and other important
aspects of our business with many other local, regional, national and international retailers, as well as our vendors who
offer their products and services direct to the consumer. Pressure from our competitors, some of which have greater market
presence and financial resources than we do, could require us to reduce our prices or increase our costs of doing
business. Furthermore, our business model includes offering our customers packaged value propositions that take the
complexity out of managing devices, content and connectivity. Some of our vendors also continue to interact directly with
customers by embedding their services into the products we sell. As a result of this competition and potential product
disintermediation, we may experience lower revenue and/or higher operating costs, which could materially adversely affect
our results of operations.
Our results of operations could materially deteriorate if we fail to maintain positive brand perception and
recognition.
We operate a global portfolio of brands with a commitment to customer service and innovation. We believe that
recognition and the reputation of our brands continue to drive our growth. Damage to the perception or reputation of our
brands could result in declines in customer loyalty, lower employee morale and productivity concerns, and vendor
relationship issues, and could ultimately have a material adverse effect on our business, financial condition and results of
operations.
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