Applying Maxine Clark's Decisions To Build-A-Bear

Current Situation

Build-A-Bear workshop stores were first established in 1996 by Maxine Clark whose influence came from former CEO of May Department Stores who had stated, “Retailing is entertainment and the store is a stage - when customers are happy, they spend more money” ( Dess, c261). Build-A-Bear’s intentions were to differentiate themselves by giving people the feeling of bringing their teddy bear to life. You could give it a heart, a name, a wardrobe and many other personal touches. Build-A-Bear is about two things, “entertainment and customization” (c261). At the time of its introduction, following their differentiation strategy, there was not much competition for customized children’s toys. However, after the concept of customization
Build-A-Bear started with a handful of stores and it grew to 150 by the end of 2003. They capitalized on the upward trending consumer demand around the holidays when they would rent space in busy malls for their pop up stores. These temporary stores brought increased revenue and gave the company the idea for its current corporate strategies of expanding to more permanent stores. They had 344 stores in the US, UK, and Canada by 2010. They set goals that would allow a Build-A-Bear store to be within 30 miles of 75% of the US population. Though these new permanent stores usually paid for themselves within the first year their “wow factor” and financial performance quickly diminished time and time again. This no loss expansion worked while saturating the market but was not cutting it when their market further matured. A main reason for the growth is because new stores brought in greater profits which gave the impression that rapid expansion was a wise strategy. They may have expanded too fast though. They lacked the necessary ingredient in producing repeat customers and this was becoming a major problem while strict reliance on overexpansion seemed to be clouding the fact they needed another competitive advantage in the quickly changing toy industry to stay competitive. The real question was how to increase repeat customers and/or increase profitability of their current operating stores. We devised two solutions that could help BearFinancials alleviate
One option to get the finances in line would be a retrenchment/turnaround strategy in which the underperforming stores would be closed freeing up resources to explore other options for expansion into different markets. Very similar to Subway and Starbucks, Build-a-Bear wanted a store close to a large percentage of the population and expanded too far and the companies saw it hurt their finances. Build-A-Bear has the unique features to be a thriving, profitable company for a long time but it needs to be careful not to expand too far where it cannot maintain its current culture and core competencies and this can be done by reducing costs through restructuring. Closing underperforming stores and exploring destinations like international airports where people from all over the world will see their product would be a good starting place. Since people do not frequent the airport so much as other retail establishments they could continuously capitalize on the “wow factor” because new people would be subjected to their stores every day. By reducing fixed costs and exploring new marketplaces Build-a-Bear should be able to boost financials immediately with little