Swot Analsis for Toys r Us Punita

Toys “R” Us, Inc. is the world’s leading dedicated toy and juvenile products retailer, offering a differentiated shopping experience through its family of brands. Merchandise is sold in 873 Toys “R” Us and Babies “R” Us stores in the United States, and more than 520 international stores and over 200 licensed stores in 33 countries and jurisdictions. In addition, it exclusively operates the legendary FAO Schwarz brand and sells extraordinary toys in the brand’s flagship store on Fifth Avenue in New York City. With its strong portfolio of e-commerce sites including Toysrus.com, Babiesrus.com, eToys.com, and FAO.com, Toys “R” Us, Inc. provides shoppers with a broad online selection of distinctive toys and baby products. The company also operates Toys.com, which offers customers exclusive deals from the company’s e-commerce sites. Headquartered in Wayne, NJ, Toys “R” Us, Inc. employs approximately 70,000 employees worldwide. The company is committed to serving its communities as a caring and reputable neighbor through programs dedicated to keeping kids safe and helping them in times of need.

Toys "R" Us, Inc. Corporate Vision and Values

At Toys“R”Us®, we love kids! Since the time the company was founded that is more than 60 years ago, kids have been central of the business. the approach the business operations with responsibility and integrity, understanding the trust parents place in the company to do the right thing and act as a reliable partner as they navigate the various stages of parenthood. In delivering on the mission to be the World’s Greatest Kids’ Brand, they not only offer parents and families a broad selection of products to create magical playtime memories along with everyday essentials, but they also provide the resources necessary to keep their kids safe. For them, it is not a revolutionary idea — it’s a core value at the forefront of all they do.

SWOT Analysis Toys "R" Us When trying to figure out a strategy of a firm, we have to look at a company’s internal and external environments. There are several things that help us analyze the external environment. Some of the more important are Scanning, Monitoring, and Forecasting the industry. SWOT analysis also plays a big role in figuring out a company’s strategy. Toys R Us is

in a very competitive industry where the entry barriers are low and new competition can come from any direction. Toys R Us constantly needs to analyze

Strengths 

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Toys "R" Us has its business in excess of 1000 superstores in the United States and Worldwide. It also owns the baby brand, Babies R Us which adds another 200 + stores. Toys "R" Us also markets successfully on the Web (in collaboration with Amazon.com). It has a huge distribution network that benefits from advanced logistical systems. Having so much shelf space means that the company has a strong bargaining position when it comes to buying prices from manufacturers. Its strong portfolio of e-commerce sites including Toysrus.com, Babiesrus.com, eToys.com, and FAO.com, Toys“R”Us, Inc. provides shoppers with a broad online selection of distinctive toys and baby products. The company also operates Toys.com, which offers customers exclusive deals from the company’s e-commerce sites. The company sells many different product ranges a key strength is that the company has a diversified portfolio of products with enormous product range that caters to all age groups for kids.

Weaknesses 

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These days, Toys "R" Us has no single and sustainable competitive advantage, other than brand. In the US, its traditional stronghold, the company has lost its number one positions as toy retailer to Wal-Mart. Being large may not be enough, when customers can go to another large retailer and buy the same and similar goods, sometimes getting a better deal. As with all retailers in Western society, Toys "R" Us is heavily dependent upon successful sales during the final quarter of the year. They need to make profit from Christmas. Retail is notoriously seasonal and Toys "R" Us is no different to other retailers. In fact it could be argued that toys are a key Christmas present product, so are even more likely to be dependent upon seasonal sales.

Opportunities  

Joint venture with reliance group in India. The two companies are close to signing a joint-venture agreement to open Toys "R" Us stores in India. The citizens of emerging nations such as India and other Asian nations are getting wealthier and better educated. Consumers have more disposable income and leisure time, and both of these could increase over coming years. The types of goods and services retailed by the company could be marketed more aggressively overseas. Toys "R" Us could look out for strategic partners, or indeed go it alone.

Threats 

There is strong competitive rivalry in the toy market, not only form Wal-Mart, but also from other toys manufactures. The toy brand is often not associated with the retailer. So

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if a particular kid's toy has grabbed the imagination and the spending power of its target consumer, any retail outlet is as good as another. Differentiation is difficult, and toy retailers often have to compete on price, range or availability. Let's face it today China and similar low cost manufacturing paradises are where toys are made. Low manufacturing costs are important if margins are to be retained. The problem, and potential weakness, is that countries and trading communities tend to impose quotas and tariffs in order to protect local manufacturing. All countries do it. However, Toy R Us could potentially be left without the toys people want to buy if embargoes are implemented on countries such as China.

Since Toys R Us was first opened in 1948, it has been striving to be the market leader in whatever category they competed in. Whether selling toys or baby clothes, Toys R US’ market share fluctuated greatly throughout time. There were times where Toys R US owed the toy market with sales reaching 530 million in earnings. More recently, they reported their first loosing year with a total of 132 million lost. After reviewing this information, the obvious question comes to mind: Why is Toys R Us experiencing difficulty in maintaining a competitive advantage in the market. There are various fundamental basics that any organization large or small scale needs to follow when setting up a new company locally and also when they venture across borders in international entrepreneurship. Effective management is one important aspect that will ensure that the company successfully achieves its goals and objectives efficiently. Management consists of organizing, planning, and leading (Adler & Gundersen 2008). Many businesses today define management as simply the things that need to be done to keep the organization going. However, for the business to penetrate the market, and experience continuous growth while maintaining healthy competition, it requires good leadership skills, effective communication, decision making skills and planning to maintain sustainability of the company in the local as well as international markets.

Toys R Us is one company that has risen from one small store in the 1950’s to a multinational company that has a number of chain stores operating in the United States as well as other states such as Europe, Hong Kong and Singapore. This was achieved through effective leadership and management skills and good assessment of various markets. Lazarus, the founder of the company, observed the market in regards to customer spending and preferences. He build toy stores with self-service like in supermarkets and put discount prizes to undercut any threatening competition thus gaining competitive advantage capturing 20% of the toy market in the United States. By the 1980’s the company was flourishing and was way ahead of its competitors. As it expanded it wings internationally, the discount formula attracted many customers who rushed into Toys R Us supermarkets to purchase new toys. This move was not welcomed well by the locals in fear that the giant stores would drive them out of business.

PESTEL Analysis Political Factors 

Not a stable Government, high level of uncertainty.

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Political factor varies from Nation to Nation, so difficult to manage Political factors in the country of manufacturing will be different from that of the consuming country.

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Parliament and hereditary rulers.

Economic Factors 

Recovering from a very severe recession.

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High government spending.

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Inflation and unemployment.

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Unfavorable prediction for growth in the economy.

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Lack of corporate reform (high corporate debt and competition)

Socio-cultural Factors 

Mixture of population Chinese, Indian, American, Africans, etc.

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Variety of religions.

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High Diversification

Technological Factors 

Good national and international lines.

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A variety of technology platform.

Environmental Factors 

Due to Global warming and awareness of the same it has become for all the companies to ensure that product are environmental friendly.

Legal Factors 

Legal environmental like political environmental varies from nation to nation so it is very uncertain,

The industry in order to try to maintain their competitive advantage. There are several steps that are involved in figuring out your external environment: Environmental Scanning involves surveillance of a firm’s external environment to predict changes and to detect changes already on the way. As an example, Toys R Us saw falling birth rate numbers in the United States and wanted to come up with a way that that can still same sales and profits even though the market significantly shrunk. Toys R Us said they would offer infant supplies (e.g., diapers) near cost to encourage mothers with young children to shop there and to form a favorable opinion of the store (including its pricing). This showed that Toys R Us monitored the new baby market and wanted to adjust its marketing and business strategies to adjust for those changes. Another very important deciding factor in making business decisions is any information collected during competitive intelligence. Competitive intelligence helps the firm understand and define their industry, and their rivals. The logical framework approach (LFA) is an analytical and management tool that can help planners and managers analyze the existing situation during project preparation; establish a logical hierarchy of means by which objectives will be reached; identify the potential risks in achieving the objectives and to sustainable outcomes; establish how outputs and outcomes might best be monitored and evaluated; present a summary of the project in a standard format; and monitor and review projects during implementation. It can thus be used for planning many different types of projects. The approach involves problem analysis, stakeholder analysis, developing a hierarchy of objectives, and selecting a preferred implementation strategy. The product of this analytical approach is the logical framework matrix (the logframe), which is usually a one- to two-page document summarizing what the project intends to do and how, what the key assumption are, and how outputs and outcomes will be monitored and evaluated. The LFA has been adopted by international financing institutions such as the World Bank and the Asian Development Bank, and a large number of agencies involved in providing develop assistance such as the British DFID, Canada's CIDA, OECD Expert Group on Aid Evaluation, International Service for National Agricultural Research Australia's Aus AID and Germany's GTZ.

Enter new Markets: New markets are like untapped opportunities. Toys “R” Us can enter new market like India and other developing nations. India is a huge huge opportunity as it had a large population so many kids, secondly with the change in income pattern & development lifestyle of people in India has changed. This change has increased the purchasing power of the individuals also the average disposable income. So entering in such booming economies will help Toys “R” Us to tab the right market at right time.

Joint Ventures, Mergers & Acquisitions :

Like Mukesh Ambani's Reliance Retail is set to bring in world's leading toy retailer Toys "R" Us to India. The two companies are close to signing a joint-venture agreement to open Toys "R" Us stores in India, a senior official close to the development said. Such strategies & other strategy like a merger with some upcoming Toy manufactures & acquiring some small toy manufacturing, etc will help them grow faster.

Outsourcing: In todays world of globalization where in there is division of work for faster & better productivity most of the processes are outsourced. Toys “R” Us should also try and outsource some of their processing which will help them in serving their customers better.

No organization can sustain any kind of change if they do not manage the change well. In oder to grow Toys “R” Us will have to impart all these changes smoothly. And the most important for smooth transition is to train the right people for the right job. They have great Training & development practices like the LIFO training (Life Orientation) which will help people keep up with the fast changing pace. All this will help Toys “R” Us to sustain in long run.