The Vermont Teddy Bear Co., Inc.: Challenges Facing a New CEO
John Sortino founded the Vermont Teddy Bear Company (VTBC) in 1981 by selling handsewn teddy bears out of a pushcart in the streets of Burlington, Vermont (Wheelen & Hunger, 2004). Mr. Sortino's motivation for making the teddy bears in the United States cultivated while playing with his son, Graham, and after noticing his son had many stuffed animals that were made in other countries (Wheelen & Hunger, 2004). Since its inception, the company's focus has been to design, manufacture, and direct market the best teddy bears made in America; using quality American materials and labor (Wheelen & Hunger, 2004). Throughout the late 1980's and into 1994, VTBC experienced a great deal of success and profitability due to the initiation of the Bear Gram marketing strategy; so much so that it became overwhelming for the entrepreneur, John Sortino, to oversee. By 1995, Mr. Sortino stepped down and supported the hiring of a new CEO that would lead the company from an entrepreneurial company into its future success as being a professionally managed organization (Wheelen & Hunger, 2004). CASE ISSUES AND SUBJECTS
Executive Leadership Patents, Trademarks, and Licenses Ownership Finance
Products and Services
Facilities and Operations
Human Resource Management
STEPS COVERED IN STRATEGIC DECISION-MAKING PROCESS
Evaluation & Control
1A 1B 2 3 4 5A 5B 6
8 Ø X Ø X X X Ø X
Ø = Emphasized in Case X = Covered in Case
To discuss Company Philosophy
To discuss Products and Services
To discuss Marketing Strategies and Distribution Methods
To discuss Facilities and Operations
To discuss the company's competitors
To discuss the company's market segments
To discuss Patents, Trademarks, and Licenses
To discuss the Finance issues
What are the strengths and weaknesses of the Vermont Teddy Bear Co., Inc? 2.
What are the opportunities and threats facing VTBC?
What are the strategic factors in VTBC's situation?
What are VTBC's core competencies?
Does VTBC have distinctive competency?
What has been the secret of the success of VTBC?
What competitive strategy has VTBC developed for its products? 8.
What industry is VTBC a part of?
What are the other current industry forces, such as power of suppliers, distributors, etc.? 10.
How is VTBC's industry changing?
What is the impact of the Internet on the company's future financial success? 12.
What types of strategies must the company develop and implement? I.
Vermont Teddy Bear Company experienced a great deal of success and profitability until 1994. Since 1995, the company had two CEOs. It changed its name to The Great American Teddy Bear Company and then changed it back to The Vermont Teddy Bear Company when customers got confused. From its inception, Vermont Teddy Bear Company had been known for its Bear-Gram delivery service. In 1996, the company decided to shift emphasis away from Bear-Grams to other distribution channels. By 1998, the company decided to renew its emphasis on Bear-Grams. Vermont Teddy has always been proud of the fact that its teddy bears were made in America with American materials and craftsmanship. In 1998, the company changed this philosophy by exploring the offshore sourcing of materials, outfits, and manufacturing in an effort to lower costs. Elizabeth Robert assumed the titles of President and CEO in 1997 and began to cut costs and position the company for future growth (Wheelen & Hunger, 2004). "
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