EFAS and IFAS Table

Solution Preview

See the attached file for complete solution. Thanks

General Scan of External Environment

Market Analysis:
The teddy bear is either part of the toy industry or the collectibles industry. In 1997, teddy bears accounted for 70 to 80% of the $1 billion in sales of the plush toy industry and sales were growing by more than 3%. In 1997, manufacturer's shipments for plush products rose 37.5% from $984 million to $1.4 billion because of the Beanie Baby craze. The US toy market is larger than Japan and Western Europe's combined. In the 1990's, marketing appeared to be the key to success in the toy market.

Competitive Analysis:
Major competitors in the toy industry include plush doll manufacturers Mattel and Hasbro. Competitive bear manufacturers include Steiff of Germany, Dakin, Applause, Fiesta, North American Bear and Gund. Competitors in the flowers industry include 1-800-FLOWERS and FTD. Chocolate producers such as Malley's and mail order gifts companies such as the Red Envelop are competitors. Competitors also include local and regional companies that provide flower, balloon, candy, cake and gift delivery.

Supplier Analysis:
Vermont Teddy Bear obtains its raw materials from domestic suppliers. However due to rising costs, overseas suppliers are being sought. Fabric cutting and sewing is performed at the Shelburne factory. Home workers are also subcontracted for their sewing skills. Bears are mechanically stuffed and then dressed to order. To reduce damage to the product and shipping costs, Vermont Teddy Bear began shipping their bears with Sealed Air Corp's Rapid Fill air-filled packaging. These plastic bags saved postage costs and did not damage plush fur.

Community Analysis:
The Vermont Teddy Bear Co. supports the women and children served by Women Helping Battered Women. During the holiday season, Vermont Teddy Bear donated equal to 25% of newly hired Bear Counselor's gross paid earning to the charity. Every child served by the program is also given a teddy bear.

Strategic Issues Priority Matrix

Possible trends and their impact on Vermont Teddy Bear

1. Booming Economy creates more disposable income for consumers
2. E-commerce increases due to outlets such as eBay and Amazon.com, and more Americans have access to the Internet.
3. Build-a-Bear Workshop offers potential customers the luxury of designing their own bear
4. interest rates are falling at a significant pace(more people are refinancing)
5. Y2K is recognized as a threat if upgrades are not made.
6. Companies are partnering up to market complementary products.(i.e; General Mills and Mattel)
7. Retail Technology improves dramatically
8. Customers becoming dissatisfied because of damaged product due to faulty packaging
9. Entertainment-based giving causes people to spend more money on entertainment than toy gifts.
10. More companies use decentralized distribution centers for faster delivery.
11. Travel-based gift giving grows rapidly
12. Discount stores develop product of similar quality
13. Use of Vermont Teddy Bear in a Movie to spark interest with children

Porters 6 Factors of Competition

1) Potential Entrants- The threat of new entrants is high. This is because there are not a lot of entry barriers into this market. For example the capital requirements are low. When John Sortino started he was hand sewing the bears and selling them on the streets. Also, access to distribution channels is relatively easy because these products can be sold on the Internet or by advertising on the radio which are both inexpensive. The threat of new entrants is a weakness for the Vermont Teddy Bear Company as it faces an increased number of competitors.

2) Rivalry Among Existing Firms- Since there is a vast number of competitors, a move by one company is not going to directly affect a move by another firm. So using this definition, rivalry is low among existing firms. Another reason is the amount of fixed costs is low because they operate out of a condensed facility. With the closing of their retail stores most of the costs are dependant upon how many products they make. This can be an opportunity for the company because it allows them to strategize and come up with original concepts without immediately being copied by a competitor.

3) Substitute Products- There is a lot of substitute products available, such as candy, flowers, balloons, and ...