Strategy Integration - Vermont Teddy Bear

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  • Topic: Retailing, Teddy bear, Vermont Teddy Bear Company
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  • Published : October 29, 2012
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© 2008 Richard E Murphy

Case Study
The Vermont Teddy Bear Co., Inc
Challenges Facing a New CEO
Submitted 26 April 2008, by
Andrea de la Peña, Paul Horan, Cindy Jaynes,
Christian Larson, Richard Murphy

© 2008 Richard E Murphy

Table of Contents
Executive Summary .................................................................................................................... Introduction ................................................................................................................................. 1.0

Mission and goals: ..........................................................................................................

2.0

Situation Analysis: ..........................................................................................................

3.0

Identification of SCA: .....................................................................................................

4.0

Teddy’s Position on Key Strategic Performance Measures:...........................................

5.0

Vermont Teddy Bear Strategy Integration:.....................................................................

6.0

Conclusions and recommendations: ...............................................................................

Bibliography ...............................................................................................................................

i

© 2008 Richard E Murphy

Executive Summary
This case study of Vermont Teddy Bear (VTB) Co., Inc. is an analysis focused on applying Strategic Management principles of business and functional level strategy. The Analysis explores five areas. These areas include VTB’s mission and goals, situation analysis (including external and internal analysis), Sustained Competitive Advantage (SCA), Performance Measures using the Balanced Score Card (BSC) and Strategic Integration. VTB’s Mission is to “Make the world a better place…one bear at a time.” This mission statement is broad and unspecific. Once might ask, “Does a teddy bear make the world a better place?” However with some creative license the assumption is that VTB can make the world a better place with products that brighten a person’s day through gift giving. The goals of the company are: to be different, create the best bears in the universe get personal, have fun, keep promises and stay rooted in Vermont. The analysis of VTB’s environment shows the company in a saturated industry with many rivals. There are also many substitutes for its products and few barriers to entry keeping out competitors. These reasons make the industry unattractive. However, VTB has some core competencies, which give the company an SCA. These core competencies include: branding, operational efficiencies, mass customization, and a unique direct marketing delivery system (the Bear-Gram) supported by Bear-Counselors and state-of-the art technology.

VTB has enjoyed an SCA throughout the 1990’s. This SCA has grown the company’s net sales from $400,000 in 1989 to $20M by the middle of the decade. What core competencies have given VTB a competitive advantage over the years? This analysis has concludes that two competencies have given VTB an SCA: 1) A unique delivery system (the Bear-Gram) that uses direct marketing, and 2) Brand image (Made in America, quality, handmade products, etc.). Even with these impressive sales levels VTB has not been profitable for the past two years.

High SG&A expenses are causing VTB to be unprofitable. These high SG&A expenses come from initiatives to grow using retail stores. Recent initiatives have been taken to restore profitability. The objectives and measures used to monitor the success of these initiatives in the Strategic Performance Areas of finance and customer perspectives are: increased sales, cost containment, working capital levels, developing new markets, customer acquisitions, and customer retention. All areas have seen improvements accept...
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