This paper is aim to have a quick analysis of current competitive position of Build-A-Bear Workshop in the toy industry and challenges it faces, and to provide Build-A-Bear Workshop with some short-term and long-term recommendations to continue its success in toy industry. This paper mainly apply Porter’s five forces analysis, external environment analysis, financial analysis and value chain analysis.
II. Case Summary
Build-A-Bear Workshop was an American toy retailer, which was founded by Maxine Clark in 1996 in St. Louis, Missouri. Build-A-Bear Workshop main served teddy beard and other stuffed animals, and accessories for teddy bears and other stuffed animals. According ...view middle of the document...
In order to reverse the decline situation, Build-A-Bear Workshop establish three innovative strategies: first, open pop-up stores to lure customers to revisit with introducing of new stuffed animals accessories; second, establish some short term themed product lines to make customers become interested in its products; third, establish licensing agreements with various professional ball teams to allow elder customers play ball games with their children or grandchildren.
III. Environment Analysis
The below is a list of external environment change which can affect Build-A-Bear Workshop:
A. Demographic segment
Nowadays, as the aging population is increasing, Build-A-Bear is not able to generate much sales as before. As Build-A-Bear Workshop mainly targeted at children aged three to twelve, Build-A-Bear Workshop did not have effective strategies to attract the aging population to its stores. However, the increasing aging population also can give Build-A-Bear Workshop an opportunity to increase its sales by introducing more new toys or games which grandparents could play with grandchildren to increase communication between aging population and the young generation.
B. Sociocultural segment
As dual-income families are prevalent in the society, most of kids are usually left at home by themselves. Because lonely children have a greater demand of toys and stuffed animals to accompany them, especially little girls, which will give Build-A-Bear Workshop an opportunity to increase its revenue. In addition, “the “Kids getting old younger (KGOY) phenomenon was noted on the Toy Industry Association’s website: ‘Kids are seeking more sophisticated entertainment…and doing so at younger and younger ages” (Eisner et al., p. C265)
C. Technological segment
While Internet technology is continually developing, various substitutions are available for customers. According to professor Eisner et al. (2011), “increasing popular electronic gadgets, video, and online games, such as Nintendo Wii game console and the www. Webkinz.com online community, could easily attract children’s attention and thus reduce the time kids spent with their plush animals” (p. C264). Because children’s preference has changed from stuffed animals or toys to technology-based devices, Build-A-Bear Workshop’s traditional products cannot meet current children’s needs.
D. Economic segment
Recently, mall traffics are greatly decreasing because the price of gasoline is going up in such a weak economic situation. In addition, because Build-A-Bear Workshop’s stores are located in malls, the declining of mall traffics could negatively influence sales of Build-A-Bear Workshops. In order to increase its sales, Build-A-Bear Workshop may transfer its stores from inside to outside of malls.
IV. Porter’s Five Forces Analysis
A. The intensity of competition in toy industry
The competition in the toy industry is intense right now because changeable preference of kids and increasing competitors. As current kids’...