MGMT 201 Case Study
MGMT 201
Principles of Management
Case Study One
Making tough decisions …
John Eyler is the CEO of Toys R Us, a retailer of toys, children’s books and children’s clothing. Over the years the company has prospered as it became the number one toy seller in the United States and a number of international markets.
Recently however Wal Mart passed Toys R Us to become the number one toy retailer in the US and with its emergence as the toy selling superpower Wal Mart has forced Toys R Us and its executives to change the way it operates. In fact, Eyler has made two daring decisions that are beginning to pay off.
His first decision entails differentiating Toys R Us as a toy seller. Although Wal Mart routinely offers lower prices than Toys R Us, Eyler has decided to use the company’s position as a toy seller to its advantage. The differentiation strategy involves remodelling a large number of stores including widening aisles and presenting toys in a more attractive way. This will cost the company a lot of money.
Eyler has also invested in Toys R Us employees through training and development hoping staff can help customers in ways Wal Mart’s employees cannot. To highlight the differentiation Eyler has also opened a new store in Times Square, New York. While these decisions may ultimately improve performance it is important to note that investments it should be noted they are costly decisions.
His second big decision involves selling online. When the company began selling online it faced difficulties in maximising sales on the internet. As a result they failed to deliver many Christmas toys that customers ordered … not a good move. To overcome this problem Toys R Us formed a partnership with Amazon.com using the online retailer’s website to sell to customers, they provide Amazon.com with their product. This decision enables the company to access Amazon.com’s enormous customer base – 1.8 million people visit Toys R Us locations during the holiday period compared to
Principles of Management
Case Study One
Making tough decisions …
John Eyler is the CEO of Toys R Us, a retailer of toys, children’s books and children’s clothing. Over the years the company has prospered as it became the number one toy seller in the United States and a number of international markets.
Recently however Wal Mart passed Toys R Us to become the number one toy retailer in the US and with its emergence as the toy selling superpower Wal Mart has forced Toys R Us and its executives to change the way it operates. In fact, Eyler has made two daring decisions that are beginning to pay off.
His first decision entails differentiating Toys R Us as a toy seller. Although Wal Mart routinely offers lower prices than Toys R Us, Eyler has decided to use the company’s position as a toy seller to its advantage. The differentiation strategy involves remodelling a large number of stores including widening aisles and presenting toys in a more attractive way. This will cost the company a lot of money.
Eyler has also invested in Toys R Us employees through training and development hoping staff can help customers in ways Wal Mart’s employees cannot. To highlight the differentiation Eyler has also opened a new store in Times Square, New York. While these decisions may ultimately improve performance it is important to note that investments it should be noted they are costly decisions.
His second big decision involves selling online. When the company began selling online it faced difficulties in maximising sales on the internet. As a result they failed to deliver many Christmas toys that customers ordered … not a good move. To overcome this problem Toys R Us formed a partnership with Amazon.com using the online retailer’s website to sell to customers, they provide Amazon.com with their product. This decision enables the company to access Amazon.com’s enormous customer base – 1.8 million people visit Toys R Us locations during the holiday period compared to