Business Policy & Strategy
Week 3 Project 1
ITT Technical Institute, Professor Raymond Poirier
The intention of this paper is to write a strategic plan that forecasts success for Vermont Teddy Bear Co., Inc. in the near future and incorporate the following: * The roles and responsibilities of the board of directors in corporate governance and the way the board affects a company’s operation. * A list of the core competencies of the company.
* Create an EFAS and IFAS matrix to understand the external and internal strengths and weaknesses. * The various decisions taken to formulate the plan and the reasons for those decisions. * The SWOT factors of Vermont Teddy Bear Co., Inc. to determine the appropriate strategies the company should take for future success. * The aspects of globalization that the company represents. * A stakeholder analysis of the company.
* The value chain and the Value, Rareness, Limitability, and Organization (VRIO) framework to assess the company’s competitive advantage and how the advantage can be sustained. * A conclusion, including whether—in your opinion—individuals should invest in this company and the reasons for your opinion.
The success of Vermont Teddy Bear Company., Inc. lies solely in their strategic plan of action for the future. John Sortino’s decision to resign was unfortunate because the company decided to change the management plan that had been profitable for so many years. After a few years of turmoil and three different CEO’s since his resignation in 1995 the new head of Vermont Teddy Bear and President Elisabeth Robert is now taking the steps needed to ensure a successful venture.
One of the key aspects of this new direction is that you have the cooperation of the board of directors. At Vermont Teddy Bear the board is made up of seven members of whom three are internal employees. Two of these seven are women and the average age of the board is fifty nine. These board members while typically would be setting the corporate strategy; these members are not seen as actively involved in strategic management but for the last four years since the company downturn are making their voice heard more. The role of the board should be to carry out three basic tasks: 1. Monitor: By acting through committees, a board can keep abreast of developments inside and outside the corporation, bringing to management’s attention developments it might have overlooked. 2. Evaluate & inference: A board can examine management’s proposals, decisions, and actions; agree or disagree with them; give advice and offer suggestions. 3. Initiate and determine: A board can delineate a compactions’ mission and specify strategic options to its management. Only the most active boards take on this task in addition to the two previous ones. Vermont Teddy Bear has a list of core competencies that include: * Main purpose is to build bears
* Commitment to quality and service
* American-built bears
* Quality products only
After the board and management have scanned the societal and task environments and identified a number of likely external factors for Vermont teddy Bear, they will need to refine the analysis of these factors be using an external factors analysis summary or EFAS as shown below:
External Strategic Factors| Weight| Rating| Weighted Score| Comments| Opportunities| |
Good economy| .15| 4| .60| Unfortunately the economy is not as stable| Booming collectible bear market| .05| 3| .15| | Direct mail| .20| 4| .80| The internet and global economy has increased sales in this area| 800 number| .20| 4| .80| This area may need to be eliminated due to declining phone usage| Threats0.00000.000| |
Competition| .25| 3| .75| |...