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Bed Bath & Beyond

Ammar Ahmad
American National University

Business Policy And strategy

DR. Tonya Blackmon

November 2, 2024
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Table of Contents
1. Introduction..................................................................................................................................3

2. Mission and Vision of the Company............................................................................................5

3. SWOT Analysis...........................................................................................................................6

Strengths......................................................................................................................................6

Weaknesses..................................................................................................................................7

Opportunities...............................................................................................................................7

Threats.........................................................................................................................................8

4. Porter’s Five-Force Strategic Model............................................................................................8

Competitive Rivalry.....................................................................................................................8

Threat of New Entrants................................................................................................................8

Bargaining Power of Suppliers....................................................................................................9

Bargaining Power of Customers..................................................................................................9

Threat of Substitutes..................................................................................................................10

5. Establishing Organizational Direction.......................................................................................10

6. Evaluating Competitive Advantage...........................................................................................11

7. Effect of the Internet on Business Models.................................................................................12

8. Complications of a Diversified Company Strategy...................................................................13

9. Ethical Policies and Practices....................................................................................................14

10. Recommendations....................................................................................................................15

11. Conclusion...............................................................................................................................16

References......................................................................................................................................17
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1. Introduction

Bed Bath & Beyond Inc. is a prominent American retail chain specializing in home

goods, including domestic merchandise and home furnishings. Warren Eisenberg and Leonard

Feinstein founded the franchise in 1971, and by 1985, it had expanded to 17 locations across

California, New Jersey, New York, and Connecticut. Prior to changing its name to Bed Bath &

Beyond in 1987 to better reflect its enlarged product line, the business was known as Bed 'n

Bath. In addition to expanding two of its current locations into superstores, Bed Bath & Beyond

opened seven new superstores in New Jersey, California, Virginia, Illinois, Maryland, and

Florida by 1991. That year, sales totaled $134 million, resulting in $10.4 million in profitability.

The profits were reinvested in the business by Eisenberg and Feinstein. The company operates

through various brands, including buybuy BABY, Harmon Face Values, and World Market. Bed

Bath & Beyond’s extensive product offerings include bed linens, bath items, kitchen textiles,

cookware, dinnerware, and home décor (Bed Bath & beyond Inc. -- Company History, n.d.).
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Bed Bath & Beyond has grown significantly since its inception, evolving from a small

chain of specialty stores to a major player in the home goods retail industry. The company is

classified under the specialty retail stores industry (Company Analysis Report: Bed Bath &

Beyond, n.d.). Its key products and services encompass a wide range of home essentials, such as

bedding, bath towels, kitchenware, furniture, and home decor. The company’s ability to offer a

diverse selection of high-quality products has been a cornerstone of its success.

Management Structure

The management structure of Bed Bath & Beyond includes several levels, with a focus

on strategic leadership and operational efficiency. The executive team is led by the CEO,

currently Chandra Holt, who oversees the company’s overall direction and strategy. The

leadership style at Bed Bath & Beyond emphasizes customer-centricity and innovation, aiming to
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enhance the shopping experience both online and in-store (Beyond, Inc. Announces Key

Leadership Changes, 2023).

Figure 1: (Bed Bath & Beyond Management Team | Org Chart, n.d.)

Significance of the Retail Industry

The retail industry plays a crucial role in the economy by providing consumers with

access to a wide range of goods and services. It is a significant source of employment and

contributes to economic growth through consumer spending (Bhasin, 2023). Bed Bath & Beyond

operates within this dynamic industry, which is characterized by rapid changes in consumer

preferences and technological advancements.

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2. Mission and Vision of the Company

Figure 2: (Bed Bath & Beyond Mission, Vision & Values, n.d.)

Mission Statement

Bed Bath & Beyond’s mission statement focuses on providing a vast selection of high-

quality home goods, innovative products, and exceptional customer service. The company’s

mission is to make it easy for customers to feel at home by offering products that cater to every

room and every moment (Bed Bath & Beyond Mission, Vision & Values, n.d.). This mission

underscores the company’s commitment to enhancing the customer experience and meeting the

evolving needs of its consumers.

Vision for the Future

The vision of Bed Bath & Beyond is to become the leading retailer in the home goods

category, inspiring and empowering customers to create comfortable, functional, and stylish

living spaces. The company aims to achieve this by continuously expanding its product offerings,

investing in digital platforms, and maintaining a strong focus on customer satisfaction. Long-
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term goals include increasing market share, enhancing e-commerce capabilities, and promoting

sustainability in product sourcing.

The mission and vision of Bed Bath & Beyond align closely with the company’s overall

strategy, which emphasizes customer-centricity, innovation, and operational excellence. By

focusing on these core values, the company aims to differentiate itself in the competitive retail

market and drive long-term growth. The strategic initiatives, such as expanding private label

brands and enhancing digital platforms, are designed to support the mission and vision, ensuring

that Bed Bath & Beyond remains a preferred destination for home goods.

3. SWOT Analysis

Strengths

Bed Bath & Beyond boasts several internal strengths that have contributed to its

longstanding presence in the retail market. One of the company’s most significant strengths is its

strong brand recognition. Over the years, Bed Bath & Beyond has become a household name,

synonymous with quality home goods and a wide product selection. This brand recognition

fosters customer loyalty, as many consumers trust the company for their home furnishing needs.

Additionally, Bed Bath & Beyond has a robust retail presence with numerous stores across the

United States, Canada, and Mexico (Fatema, 2023). This extensive network allows the company

to reach a broad customer base and maintain a strong market presence.

Weaknesses

Despite its strengths, Bed Bath & Beyond faces several internal challenges. One of the

most pressing issues is its financial struggles. The company has experienced declining sales and

profitability in recent years, which has raised concerns about its long-term viability. Another
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significant weakness is the company’s poor digital transformation. While Bed Bath & Beyond

has made efforts to enhance its online presence, it still lags behind competitors like Amazon and

Walmart in terms of e-commerce capabilities (Fatema, 2023). Additionally, the company has

faced supply chain issues, which have led to stockouts and delays in product availability. These

challenges have hindered the company’s ability to compete effectively in the rapidly evolving

retail landscape (Fernie & Sparks, 2022).

Opportunities

Bed Bath & Beyond has several external opportunities that it can leverage to improve its

market position. One of the most promising opportunities is the growth of e-commerce. By

investing in its digital platforms and enhancing its online shopping experience, the company can

attract a larger customer base and increase sales. Another opportunity lies in diversification. Bed

Bath & Beyond can expand its product offerings to include more exclusive and private label

brands, which can help differentiate it from competitors (Fatema, 2023). Additionally, the

company can explore entering new markets, both domestically and internationally, to tap into

new customer segments and drive growth.

Threats

Bed Bath & Beyond faces several external threats that could impact its business. One of

the most significant threats is competition from online retailers such as Amazon and Walmart.

These companies have a strong online presence and offer competitive pricing, which can draw

customers away from Bed Bath & Beyond (Fatema, 2023). Another threat is the changing

consumer behavior. As more consumers shift towards online shopping and demand faster

delivery times, Bed Bath & Beyond must adapt to these trends to remain competitive.
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Additionally, the company faces economic uncertainties and fluctuations in consumer spending,

which can affect its sales and profitability.

4. Porter’s Five-Force Strategic Model

Competitive Rivalry

The retail industry is highly competitive, with Bed Bath & Beyond facing significant

competition from major players like Walmart, Target, and Amazon. Walmart dominates the brick-

and-mortar retail space with its extensive network of stores and competitive pricing strategies.

Amazon, on the other hand, leads the e-commerce sector, offering a vast array of products and

services, including fast delivery options and a seamless online shopping experience. Target

combines both physical and online retail strengths, providing a diverse product range and a

strong customer loyalty program (Monteros, 2021). This intense competition forces Bed Bath &

Beyond to continuously innovate and improve its offerings to maintain its market share.

Threat of New Entrants

Entering the home goods retail space requires substantial capital investment and

resources, which acts as a barrier to new entrants. Established brands like Bed Bath & Beyond

benefit from economies of scale, brand recognition, and established supply chains, making it

difficult for new companies to compete. Additionally, the need for a robust distribution network

and the ability to offer competitive pricing further deters new entrants (Bed Bath Beyond Porter

Five Forces Analysis, n.d.). However, the rise of e-commerce platforms has lowered some

barriers, allowing smaller players to enter the market with niche products and innovative

business models.
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Bargaining Power of Suppliers

Bed Bath & Beyond relies on a diverse range of suppliers globally, which helps mitigate

the bargaining power of any single supplier. However, the company is still vulnerable to supply

chain disruptions and fluctuations in raw material costs. Suppliers with unique or high-demand

products can exert more influence, potentially impacting pricing and product availability. To

counter this, Bed Bath & Beyond has been investing in supply chain modernization and building

stronger relationships with key suppliers to ensure a steady flow of goods.

Bargaining Power of Customers

Customers have significant bargaining power in the retail industry, especially with the

availability of numerous online alternatives. The ease of price comparison and the abundance of

choices empower customers to demand better prices, higher quality, and superior service. Bed

Bath & Beyond must continuously enhance its customer experience, both online and in-store, to

retain customer loyalty and attract new shoppers (Bed Bath Beyond Porter Five Forces Analysis,

n.d.). Implementing loyalty programs and personalized marketing strategies are essential to

maintaining a competitive edge in this environment.

Threat of Substitutes

The threat of substitutes in the home goods retail market is relatively high, as customers

can easily switch to alternative products or services. Competitors like Wayfair, IKEA, and

HomeGoods offer similar products, often at competitive prices. Additionally, the growing trend

of online shopping provides customers with numerous options to meet their home furnishing

needs (Johnson, 2024). To mitigate this threat, Bed Bath & Beyond focuses on differentiating its
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product offerings through exclusive brands, superior customer service, and a comprehensive

shopping experience.

5. Establishing Organizational Direction

Strategic Goals

Bed Bath & Beyond has set several strategic goals to drive its long-term growth and

sustainability. These include enhancing its digital capabilities, expanding its private label brands,

and improving supply chain efficiency. The company is also committed to its environmental,

social, and governance (ESG) strategy, aiming to become a top 10 retail employer by 2030 and

achieve net-zero carbon emissions by 2040 (BBBY Inc, 2021). These goals are designed to

strengthen the company’s market position and ensure sustainable growth.

Leadership and Management Focus

The leadership at Bed Bath & Beyond is focused on reversing recent financial struggles

and adapting to the changing retail landscape. Key priorities include addressing supply chain

issues, enhancing the digital shopping experience, and improving inventory management. The

management team emphasizes a customer-centric approach, aiming to provide a seamless and

enjoyable shopping experience both online and in-store. By fostering innovation and maintaining

a strong focus on operational efficiency, Bed Bath & Beyond aims to navigate the challenges of

the retail industry and achieve long-term success (MIT, 2023).

6. Evaluating Competitive Advantage

Cost Leadership or Differentiation

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Bed Bath & Beyond primarily follows a differentiation strategy. The company focuses on

offering a wide range of high-quality home goods and exceptional customer service to

distinguish itself from competitors. This strategy is evident in its extensive product assortment,

including exclusive and private label brands, which aim to provide unique value to customers

(Restrepo, 2023). While Bed Bath & Beyond does employ competitive pricing strategies, it does

not pursue cost leadership as aggressively as retailers like Walmart. Instead, it emphasizes

creating a compelling shopping experience through product variety and customer engagement

(Hamstra, 2020).

Sustainability of Competitive Advantage

The sustainability of Bed Bath & Beyond’s competitive advantage is currently under

significant pressure due to market and economic conditions. The rise of e-commerce giants like

Amazon has intensified competition, making it challenging for traditional retailers to maintain

their market share. Additionally, Bed Bath & Beyond’s financial struggles and delayed digital

transformation have further weakened its competitive position. However, the company’s recent

efforts to enhance its digital capabilities and streamline operations could help stabilize its market

presence if executed effectively (BBBY Inc., 2020). The success of these initiatives will largely

determine the sustainability of its competitive advantage in the long term.

7. Effect of the Internet on Business Models

E-commerce and Omnichannel Strategies

Bed Bath & Beyond has been actively adapting to the rise of e-commerce by integrating

online and offline channels to create a seamless shopping experience. The company has

implemented several omnichannel strategies, including buy online, pick up in-store (BOPIS),
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curbside pickup, and same-day delivery. These initiatives aim to provide customers with flexible

shopping options and improve overall convenience (BBBY Inc., 2021). Additionally, Bed Bath &

Beyond has invested in enhancing its digital platforms to offer a more user-friendly online

shopping experience. These efforts are crucial for the company to compete effectively in the

digital age.

Changes in Consumer Behavior

The rise of online shopping has significantly impacted consumer behavior, with

customers increasingly expecting convenience, speed, and a wide range of choices. Bed Bath &

Beyond has had to adapt to these changes by improving its e-commerce capabilities and offering

competitive delivery options. The company has also focused on personalizing the shopping

experience through data-driven insights and targeted marketing campaigns. These changes are

essential for meeting the evolving expectations of consumers and maintaining customer loyalty

in a highly competitive market (Roberts & Roberts, 2021).

Digital Transformation Initiatives

Bed Bath & Beyond has undertaken several digital transformation initiatives to improve

its business model and enhance operational efficiency. The company has partnered with

technology providers like Google Cloud to leverage advanced analytics and machine learning for

better inventory management and customer insights. Additionally, Bed Bath & Beyond has

invested in modernizing its supply chain and implementing digital tools to streamline operations.

These initiatives are aimed at creating a more agile and responsive business model that can adapt

to market changes and drive growth.

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8. Complications of a Diversified Company Strategy

Challenges of Diversification

Bed Bath & Beyond has employed diversification strategies to expand its product

offerings and enter new markets. However, these strategies come with several complications.

Diversifying into new product categories and markets requires significant investment and can

strain the company’s resources. Additionally, managing a diverse portfolio of products and

brands can lead to operational complexities and increased risk (Fisher, et al., 2021). The

company must carefully balance its diversification efforts with its core business to avoid

overextension and ensure sustainable growth.

Focus vs. Spread Risk

There is an inherent tension between maintaining focus on core products and diversifying

into new areas. While diversification can spread risk and open new revenue streams, it can also

dilute the company’s brand identity and divert attention from its primary business. Bed Bath &

Beyond must strategically manage this balance to ensure that its diversification efforts

complement its core strengths and do not compromise its market position. Effective

diversification requires a clear understanding of market opportunities and a disciplined approach

to resource allocation.

Competitor Comparison

When comparing diversification strategies with other major retailers, Bed Bath & Beyond

faces stiff competition. Companies like Walmart and Amazon have successfully diversified their

product offerings and services, leveraging their scale and technological capabilities to enter new
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markets. Bed Bath & Beyond must differentiate its diversification strategy by focusing on areas

where it can offer unique value and build on its existing strengths (Dignan, 2020). This approach

will help the company compete more effectively and achieve sustainable growth.

9. Ethical Policies and Practices

Ethical Standards

Bed Bath & Beyond is committed to ethical business practices, corporate social

responsibility, and sustainability. The company has implemented a comprehensive

environmental, social, and governance (ESG) strategy that focuses on creating an equitable work

environment, supporting community initiatives, and improving environmental performance.

These efforts are aimed at fostering a positive impact on society and the environment while

enhancing the company’s reputation and stakeholder trust (BBBY Inc., 2021).

Ethical Challenges

Despite its commitment to ethical standards, Bed Bath & Beyond has faced several

ethical challenges. Issues such as labor practices, supply chain disruptions, and environmental

concerns have posed significant challenges for the company. Addressing these challenges

requires continuous improvement and adherence to best practices in ethical business conduct

(Wang, 2023). The company must also engage with stakeholders to ensure transparency and

accountability in its operations.

Consumer and Employee Impact

Bed Bath & Beyond’s ethical policies have a significant impact on both consumers and

employees. By promoting fair labor practices and ensuring safe working conditions, the company
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fosters a positive work environment that enhances employee satisfaction and productivity.

Additionally, the company’s commitment to sustainability and responsible sourcing practices

resonates with consumers who prioritize ethical and environmentally friendly products (Johnson,

2024). These efforts contribute to building a loyal customer base and a motivated workforce,

which are essential for long-term success.

10. Recommendations

1. Strengthen Digital Transformation Efforts: Bed Bath & Beyond should prioritize enhancing

its online presence and digital capabilities. Investment in a robust e-commerce platform, AI-

driven customer insights, and improving supply chain efficiencies will be critical to keeping up

with competitors like Amazon and Walmart.

2. Focus on Private Label Expansion: By expanding its exclusive and private label offerings,

the company can differentiate itself from competitors, foster brand loyalty, and improve profit

margins. This strategy will help Bed Bath & Beyond stand out in the crowded home goods retail

market.

3. Improve Operational Efficiency and Supply Chain Management: To address issues like

stockouts and inventory delays, the company should continue to modernize its supply chain.

Partnering with technology providers to implement real-time tracking, predictive analytics, and

automated processes will enhance operational resilience and customer satisfaction.

4. Increase Customer-Centric Initiatives: Emphasizing customer loyalty programs and

personalization efforts, such as targeted marketing and customized shopping experiences, will

help retain and attract customers. Adapting to evolving consumer behavior and preferences will

be vital for long-term growth.

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5. Expand Omnichannel and In-Store Experience: As customers increasingly expect

flexibility, further investment in omnichannel strategies like curbside pickup and same-day

delivery will enhance the customer experience. Improving the in-store experience with modern

layouts and better customer service can also drive foot traffic.

11. Conclusion

Bed Bath & Beyond faces significant challenges in adapting to the rapidly changing retail

landscape. However, by focusing on digital transformation, expanding private labels, optimizing

supply chain management, and reinforcing customer-centric initiatives, the company has a solid

pathway to regain market position and ensure long-term growth. Adapting to consumer trends

and leveraging technological advancements will be crucial in preserving its competitive

advantage and navigating the complexities of a diversified business strategy in an increasingly

digital world.
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