• Strategy
  • CFO Asia

John Noble, Best Buy International

How the CFO navigates two brands and two business cultures from his Vancouver office.

Can you give an example?

In Canada, we were moving from one provider for our
warranty program to another. I was on the phone with
the accountants for days discussing this. The cash we’d
get for these programs would be sitting with the warranty
provider and we’d be earning interest on it. I
thought we should recognize the interest income over
time and fit it into the accounting treatment, but the
accountants were more conservative and didn’t want
to. I didn’t really get to where I wanted to, but we did
end up with a compromise. But we were in that gray
zone where you had leeway to argue different points
of view.

What are the financial challenges confronting
you in China?

We’re a cash-rich company and we injected cash into
Five Star when we established the joint venture. Because
of boundaries to cash management within China, we’re
still learning how to manage capital between two separate
business entities. It’s very different than in Canada
or the U.S. We have a global relationship with one major
financial institution, but we’ve opted for a different
provider here. I believe in diversity in banking relationships
and with all vendors, actually. You don’t want one
particular provider to take you for granted. I want them
to compete for our business.

So you’re convinced the dual-brand strategy is
a world beater?

Not necessarily. Our acquisition of Five Star has gone
well, but we’re evaluating whether to do it the same way
as we continue opening in overseas markets. We’re
examining Turkey and Mexico. In Turkey, for example,
the dual-brand strategy might not make sense, because
we can’t see anything we’d like to buy there. For us, it’s
not just a matter of market share. It has to make sense
on many levels. One of the reasons we liked Five Star was
that they thought about the soft stuff — people skills,
support, and creativity — in much the way we do. So
there has to be a cultural fit. That said, we’re open to
acquisitions everywhere, and even open to a dual-brand
strategy in the U.S.

Speaking of knowing the culture — how can
you run such an important operation from
Vancouver?

I’m certainly hoping to move to Shanghai — no firm
plans yet.

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