Build-a-Bear International Expansion Into the Chinese Toy Market

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“At Build-A-Bear Workshop®, our mission is to bring the Teddy Bear to life. An American icon, the Teddy Bear brings to mind warm thoughts about our childhood, about friendship, about trust and comfort, and also about love. Build-A-Bear Workshop embodies those thoughts in how we run our business every day.” (Build-A-Bear Workshop - Our Company 2009)

Build-A-Bear Workshops was started in 1997 by current CEO Maxine Clark, and there are now over four hundred Build-A-Bear Workshop stores worldwide. They have 346 wholly owned subsidiaries in the U.S., Puerto Rico, Canada, the U.K., Ireland and France. There are also 62 franchised retail stores in International locations – Australia, Belgium, Denmark, Germany, Japan, The Netherlands, Norway, South Korea, Russia, Singapore, South Africa, Sweden, Taiwan and Thailand. The company employs 1200 full-time and 4800 part-time employees. Build-A-Bear Workshop is the only global company that offers a retail entertainment experience in an interactive “make your own stuffed animal” process. The company currently locates its headquarters and distribution center in the United States. These two facilities are also known as the World Bearquarters (located in St.Louis, Missouri) and Bearhouse, and will be referred to it by these names throughout the rest of this proposal.

In this project we intend to take the role of a third-part consultancy firm aiming to advise build a bear on an appropriate entry strategy and business plan for a chain of franchise stores in the Peoples Republic of China. Since 2002, it has been the goal of Build-A-Bear Workshop to expand globally, and what better place to move into than one of the fastest growing economies in the world, China. Apart from their original and successful operations used in most of their international establishments, this proposal will offer insights on alternative strategies and implementations to help Build-A-Bear Workshop to be successful in China, and capture the attention of the Chinese consumers and market. The company has sustained its prosperity in the current economic climate by prioritising their sales and promotion techniques which aims to share a unique entertainment retail experience with the customer.

China offers a huge market in the midst of the country’s well publicised ‘economic miracle’. Build a bear’s plans for global expansion is obvious encouragement for us to enter the Chinese market with a population of 34 million in the first tier cities combined (14 million people in Shanghai, 12 million people in Beijing, and 8 million people in Guangzhou). Implementing a franchise chain rather than wholly owned subsidiaries throughout Chinas largest cities will allow us to avoid potential pitfalls in an untested market. A driving force behind our decision is Build a bears incentives for franchising in international locations and the opportunity to launch a series of Build a bear workshops adapted to the local real estate market and sensitive to the local culture while retaining commitment to the Build a bear workshop culture. Capital requirements are stipulated to be a minimum of $5 million for each start up franchise. A major factor influencing our decision was the role of Chinas ‘little emperors’ in the economy. As the Chinese economy develops the amount of disposable income available to the ‘little emperors’ is directly increasing, who themselves fit perfectly into build a bears target market of children aged 14 or under. This target market is estimated to be in the region of almost 300 million children which makes China an extremely attractive market for our products. In addition we have realised the opportunity that the ‘one child policy’ has created for a customised companion to accompany a child throughout his/her childhood. The main objective of bringing build a bear to China would be to expand from our initial store in Shanghai to other large cities. This would be done by creating a monopoly for long...
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