Scanning The Environment
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EFAS (External Factor Analysis Summary)
External
Weight
Rating
Comments
Strategic Factors
Scores
Opportunities
U.S. toy market increasing 3% year
Good market trend
Booming collection market
Future investment returns
Product recognition
International Opportunity
Efficient technology
Up to date technology needed
Direct Mail
Accounted for 9.2% of Sales
Threats
New Entrants
Unrestricted entry by competition
Winnie the Pooh (Existing Competitors)
Bear-Gram trade mark
Product Advancement
Questionable
Foreign Competition
Steiff, Asian companies
Legal Requirements
Internet business: User Privacy
TOTAL SCORES
IFAS (Internal Factor Analysis Summary)
Internal
Weight
Rating
Comments
Strategic Factors
Scores
Strengths
Brand name
Well Known
Favorable employee relation
Stimulates individual growth
Increase catalog sales
Increase profits
New Management
Eliminated unprofitable ventures
Product Quality
Craftsmanship
Weaknesses
Dependence on common carrier
Unreliability of shipment and cost
No dividends to stock holders
Limited stock holders
Bad lease agreements still in place
Balloon Payment at the end
Inconsistent sales
Highly Seasoned
Retail Stores
Low Profitability
TOTAL SCORES
From the time of its inception in 1981, the Vermont Teddy Bear Company had done superbly under the leadership of John Sortino, the founder of the great hand sewn teddy bears.
The journey embarked on the idea of making teddy bears using the quality American materials, and labor. Through out its first decade of progress, the company had focused on designing, manufacturing, and direct marketing of its great product, by using the American materials and craftsmanship.
It was not until 1995, when the company had started experiencing serious problems in terms of its profitability, and sustainability. This was evident as two of its CEOs had resigned from their seats in the next few years.
On June 20th, 1995, the companys founder John Sortino had stepped down when he recognized that the future success of the company depends, rather, on its smooth transition, from the entrepreneurial venture to the professionally managed organization. Following his resignation, the new CEO of the Vermont Teddy Bear Company, R Patrick Burns, took over the charge, in a hope to fix the problems, Sortino had left them with. Amidst the companys deteriorating performance, in October, 1997, Burns, too, had resigned from his post, which was then taken over by the former CFO of the company, Elisabeth Robert. Since then, Ms Robert has been making strives to get the company back on track.
The strategic decisions of a firm competing in the global marketplace are becoming increasingly complex. In such a firm, managers can no longer view global operations as a set of independent decisions, but rather consider the various products, country environments, and strategic options, as rather intertwined.
Admittedly, as the company expands its business, its faced with many challenges, from regional to national, and from national to global competition. This is what Sortino had envisaged for, when he resigned from his post as the CEO of the Vermont Teddy Bear Company, in the June of 1995.
In the book, Strategic Management and Business Policy, Jauch, and Glueck (1992), reinvigorates, that, “decision making is a multi-phase process. Effective decision makers combine their rational, and intuitive approaches to making complex, unstructured decisions, however, they also consider the political feasibility of their decisions” (p. 31).
Given the complexity in making decisions, the planners, and experts do the environmental scanning of the company in question as a way to determine the external, and the internal strategic factors, in assessing the situation, past trends, and future forecasting, and develop the strategy that can help organizations retain their competencies, and put them back on the track of profitability.
Analyzing the environment enables managers to think strategically about future developments in their surrounding environments. Although there are quantitative and qualitative approaches to forecasting and analyzing the environment, in reality, often managers use subjective or judgmental approaches since these may be the only practical methods of forecasting political, legal, social, and technological trends.
In this particular paper, I have tried to determine the external and internal strategic factors of the Vermont Teddy Bear Company, by conducting the environmental scanning of its external and internal environments, in light of SWOT.
First I analyzed the companys external environment, and found that the major threats to the company were coming from its existing, as well as its foreign competition. For instance, according to Wheelen, and Hunger (2006), “most toys that are sold in