Explain the strategic management process within the global environment. Conduct various environmental analyses as they relate to an organization. Describe the role of corporate governance in strategic decision making.
The Vermont Teddy Bear Co., Inc.: Challenges Facing a New CEO (IFAS and EFAS tables included)
The Vermont Teddy Bear Company (VTBC) was founded in 1981 by John Sorinto. Unfortunately, for John, the company became too big for him to oversee since he was an entrepreneur. However, he gracefully stepped down in 1995 and supported the hiring of a new CEO that would lead the company into its future success (Vincelette, p. 27-3). One thing that has remained is the companies focus. The Vermont Teddy Bear's "...focus has been to design, manufacture, and direct market the best teddy bears made in America using quality American materials and labor." (p. 27-1) In fact, "American made with American materials" is the basis of the company's mission statement.
In the year following the change of CEO, VTBC tried changing its name to 'The Great American Teddy Bear Company". However, this tactic failed when customers grew confused. As a result, the Vermont Teddy Bear Company name was reinstated. Again, trying to reinvent themselves, the company decided to change their current distribution method in 1996. The decision they made was to shift away from the company's signature Bear - Grams, which was very successful, but not creating growth. In its place, they wanted to go into retail stores and expand their catalog (Vincelette, p. 27-3). This, too, proved to be less than a success and eventually Bear-Grams were once again their focal means of distribution and strategic marketing.
Finally, in 1997, Chief Executive Officer R. Patrick Burns stepped down and Elisabeth Roberts, Chief Financial Officer, became the new President and CEO. Roberts vision for the future of the company included cutting cost (Vincelette, p. 27-4). Forced to look at their materials from a purely financial view, something had to be done. The answer Roberts sought was "...offshore sourcing of materials, outfits and manufacturing..." (p. 27-4). Thus, Vermont Bear Labels now read, "Made in America, of domestic and foreign materials" (p. 27-6). Elisabeth Roberts also believed that Vermont Teddy Bear was not simply a "stuffed animal" market, or merely a "toy". Rather, she defined the competition as being those businesses that "...sold chocolates, flowers, and greeting cards. They target the last minute shopper who wants almost instant delivery." (p. 27 -4) Knowing that their competition went beyond toys, they were able to market their product in several areas and the success of that is seen in sales.
The purpose of environmental scanning is to assess those elements surrounding your company and market. A SWOT analysis identifies strategic factors, which are the company's strengths, weaknesses, opportunities and threats, that will determine its future (Wheelen, p. 9). Specifically, it involves monitoring, evaluating and sharing the "...information from the external and internal environments..." with "...key people within the corporation." (p. 52).
Knowing your external environment makes you aware of your company's opportunities and threats. Knowing the internal environment teaches you about the company's strengths and weaknesses. A way to measure these factors is by creating a EFAS (External Factor Analysis Summary) or IFAS (Internal...