Dual-Brand Strategy in Canada

Cannibalization was a major issue. It was likely that each Best Buy store would eat into the earning of a Future Shop store and vice versa, particularly when the two were in close proximity. Since the company would have to manage two different brands, the marketing dollars in Canada would be split in half, minimizing the impact of ad-spend. Also imminent was the possibility of blurring of brand identity in the eyes of the consumer. Finally, there would be duplication of roles at the corporate headquarters at Minneapolis, with the two brands requiring separate staff inputs.

In China, the trade-offs had an additional dimension, requiring product-segment-region choice. Marketers had to factor in regional differences because as one moved across tiers of cities in China, a steep drop-off was experienced in infrastructure, channels and disposable income. When a mass merchandiser entered China, it evaluated the country's cities, giving each locale a tier designation on the basis of size, sophistication, purchasing habits, attitudes and disposable income of its population and its own product offerings.

Land acquisition in cities was often difficult. The Chinese CE retail market was fragmented. The top five players together held less than 20% of the market share.

In my opinion they should make one big company to compete with those big competitors in China. Because China market situation is totally different than Canada CE market. They will face more problems like strong competitors and also consumer's preference of domestic company over Multinational Corporation. Also Best Buy store could face problem of eating into the earning of a Five star store and vice versa as Best Buy faced in Canada market.