Build-A-Bear Workshop

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Build-A-Bear Workshop (BAB)

Background Information

Build-A-Bear Workshop CEO Maxine Clark had a modest but a very powerful idea, to build an inordinate toy retailer store in America which would serve customized teddy bears and other stuffed animals to customers in America. Despite many people ignoring his course, he saw his company join the fastest growing companies by the early the 1990s. As a matter of fact, Build –A- Bear Workshop was rewarded with “The Fast Company’s Customer Centred Leader Award” in the year2005. Apparently, this represented a great future for the company.         Nonetheless, the company has recently witnessed a persistent decline in revenues in the recent past that immensely affect its prospects. In this view, there have been declines in revenues of 18percent, 0.2 percent, 6.5percent, 9.9 percent, and 14.0 percent, for the years 2004, 2005, 2006, 2007, and 2008 respectively. All these declines have been attributed to different aspects, but primarily they affect the company performance. For this reason, the company needs to address this challenges adequately, because this will determine the company performance in the future.

5 Forces and the General Environments That Impact on BAB.

The threat of Substitutes.One of the most challenging disruptions to BAB is the advent of digital technologies. Modern technology has turned the entertainment industry into a Schumpeterian welter of creative destruction. According, to The Toy Industry Report Of 2007, there is a possibility that online games and gadgets would limit the time children spend on their toys, and this means mean that toys and other BAB products will become irrelevant with time.

Competition rivalry. Indeed it’s adamant that BAB does not have direct competitors producing exact customized product’s on the market. However, there is still some competition threat from other firms like American Girl and Vermont Teddy Bear. Notably, not many customers may have a vibrant idea of a customized product, and this gives competitors an added advantage.

The Threat of New Entrants. The threat of new entrants is rather small but imperative.  With the modern advent of new technology, new firms may evolve and start selling similar or improved products. Moreover, the market for toys is so extensive, and it may attract new firms, which could be a threat to BAB.

Bargaining Powers of Customers. Customers may not impact immensely on the operations of BAB, owing to their great dominance of the market. Even so, the fact that the consumption of the company’s products are based on preferences, larges and exemplifies consumer’s impact.

Suppliers Bargaining Power. Remarkably, BAB’s productions occur at large scale. This gives the corporation economies of scale, and thus suppliers do not have the power to influence the market price of BAB’s products.

General Environments.

        While monitoring the active forces that effect BAB, it’s apparent that technology, political environment, economic environment and competition immensely affect BAB operations. Notably, all these forces are beyond the company’s control and how the company responds to their disruptions will determine its future successes

SWOT and TOWS Analysis on BAB

Table 1: BAB’s SWOT Analysis

Value Chain analysis on BAB

        As earlier perceived, BAB wants to maintain its relevance in the market as a unique toy retailer. For BAB to ascertain this value while, distinguishing itself from competitors they have introduced a strategy that brings close customer relations by allowing customers customize, personalize, and chose their products. Moreover, the company has narrowed their product lines to focus on their target markets efficiently. In this mention, the company majorly focuses on young children as their primary target market. Lastly, the company has been consistent in their operations, unlike competitors who move with the preferences of their customers.

Resource Based analysis on BAB

        Remarkably, BAB has shown exceptional performance and differentiation from other similar firms in the market. It’s almost no question that this is because of the company unique capabilities and resources. Firstly, the company enjoys an array of innovative personnel who customize products for customers. Secondly, the company is widely and well financed to support 400 distribution stores which make BAB products readily available to their target market. Lastly, the company is based on customer-centric approaches which lead to greater satisfaction to customers who purchase the company’s product.