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Vermont Teddy Bear Co.

Essay by   •  December 22, 2010  •  Case Study  •  1,714 Words (7 Pages)  •  1,435 Views

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1. Introduction

In 1981, John Sorinto began selling hand sewn teddy bears out of a cart in Burlington, Vermont. He began doing this after playing with his son and noticing that the majority of stuffed animals were manufactured in other countries. He figured that teddy bears were an American tradition, and therefore, some quality teddy bears should be made in the United States. This was how the Vermont Teddy Bear Company was founded ().

During the first fourteen years, Vermont Teddy Bear experienced continued growth and success. However, in 1995, they began to have some troubles as they experienced changes in leadership and an identity crisis. One of the things that drove the success of Vermont Teddy Bear in the earlier years was its Bear-Gram service. Customers could call a toll-free telephone number and place a special order for a bear similar to how people might send someone flowers for a special occasion. Additionally, Vermont Teddy Bear had used only quality American materials and craftsmanship in their bears. Vermont Teddy BearÐŽ¦s main focus had been ÐŽ§to design, manufacture, and direct market the best teddy bears made in America using quality American materials and laborЎЁ (). But, in 1996, the new leadership at Vermont Teddy Bear decided that it would be cost-effective to use some foreign materials in their bears, and they also began to move towards retail sales and limit their focus on the Bear-Grams ().

2. Organizational Environment

In order to plan for future success of the Vermont Teddy Bear Company, we need to be able to analyze the external and internal environmental trends of the organization. These trends might include customer service, human resources, production and manufacturing, financial resources, product quality and craftsmanship, stakeholders opinions and the organizations culture. By categorizing and placing values on these factors allows us to rank them to show company performance, probability of success, and market potential.

3. Strategic Management Process

In most corporations, top management must initiate and manage the strategic management process. To do this, they often request that the different divisions within the organization propose their own strategic plans (Wheelen, et al. p. 36). This allows top management to compile and evaluate these proposals in order to create an overall corporate strategy. When considering the Vermont Teddy Bear Company, it seems that the most appropriate scenario would be for a top-down approach to strategy planning. This is because the company is not exactly a multi-divisional organization as they essentially produce one line of products. With the to-down approach, senior management can require each division to justify their goals, objectives, strategies, and programs in terms of how they will account for the overall corporate objectives (Wheelen, et al. p. 36).

4. Synthesis of External Factors-EFAS

The External Factors Analysis Summary table is a method that can be used to organize the organizationÐŽ¦s external factors into generally accepted categories of opportunities and threats as well as to analyze how well a particular companyÐŽ¦s management (rating) is responding to these specific factors in light of the perceived importance (weight) of these factors to the company (Wheelen, et al., p. 73).

External Factors Weight Rating Weighted Score Comments

1 2 3 4 5


„X American Manufacturing .20 4.1 .82 Tradition

„X Larger production facilities .05 2.0 .10 Diverted attention

„X Retail outlets .05 2.0 .10 Diverted Att.

„X Radio advertising .20 5.0 2.0 Past success

„X Direct Marketing .15 4.4 .66 Past success


„X Competition .10 4.0 .40 Popular occasions

„X Foreign Marketing .05 1.5 .08 Lack of funds

„X Patents and Trademarks .10 2.5 .25 Increasing with new products

„X Other companies .10 4.0 .40 Popular occasions

Total Scores 1.00 4.81

In review of the external factors, more weight was given to those that had more success or negative impact in past or probable future occurrences. For example, it was stated in the case study that the competition was 1-800-FLOWERS and similar type businesses. Additionally, other stuffed toy products such as Ty Beannie Babies were considered to be a valued threat. American tradition is always valued in the United States, so the ÐŽ§made in AmericaЎЁ idea was also weighted considerably. Foreign marketing was never much of a possibility due to the lack of financial resources, so therefore, it was not heavily weighted. The lack of success in the retail store marketing also caused for a lower weighted score.

Overall, the weighted score shows that the things that had made the Vermont Teddy Bear Company successful are the things that they need to maintain focus on. The score also dictates that the things that they tried to do in order to decrease costs were not contributing factors towards the success of the Vermont Teddy Bear Company.

5. Synthesis of Internal Factors-IFAS

IFAS is a summary of the analysis of the internal factors that have been observed and evaluated in a particular organization. Additionally, IFAS is a method for organizing the internal organizational factors into categories of strengths and weaknesses in order to determine how well a companyÐŽ¦s management is responding to the factors in light of the perceived importance of the factors to the company (Wheelen, et al. p. 101).

Internal Factors Weight Rating Weighted



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