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SWOT Analysis and RBV Analysis of Toys “R” US

SWOT Analysis and RBV Analysis of Toys R US

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SWOT Analysis

SWOT Analysis of Toys R US will be based on the present state of issues of the enterprise. As the company is experiencing difficult times due to financial problems and lack of sustainable development, it is expedient to analyze both inner and outer factors that may have influenced the decrease of the business (Isidore, 2017). Additionally, the potential measures that may be taken by the management should be analyzed precisely. SWOT analysis is believed to be the complex way to find out strong and weak points of the company in the modern business environment. On its basis, the further way of actions may be developed and implemented to improve the crisis that has evolved. Moreover, SWOT analysis is required for defining the further way of growth of a large company that has already been represented on the market for more than fifty years.

Considering the strengths of Toys R US, the first one has been already mentioned. The company is presented in the sphere of toys and goods for children since 1948. This brand name is known in the world as the one offering the products of high quality. For example, Toys R US sticks to high safety standards. Increased attention to the selection process favorably distinguishes the company from the large trading platforms that sell mass-produced goods from all over the world. In such conditions, it is much more difficult to track compliance with high safety standards for toys, furniture, or children’s clothing. Furthermore, for about a decade, Toys R US has been supporting the solar power initiative, which is extremely important in the modern realities. This decision was a reliable investment for the company. It also positively influenced the image of the company, once again emphasizing concern for health and future well-being of the main target audience of the companychildren. In 2017, the company has faced financial difficulties, which did not take place at once but have developed in the latest years (Hirsch, 2017). Therefore, today, the management of Toys R US is no more taken by surprise. Knowing the weak points and having ideas regarding the path of development, the company will be able to cope with existing problems. With the significant network of stores in many countries of the world, the enterprise can profitably take advantage of this position to implement any steps across the entire network immediately. For instance, the company has already launched the functioning online service despite all the limitations. Summarizing the strong points of the business, it is evident that the enterprise has a solid basis for growth and development.

Despite all the advantages, the company has announced its bankruptcy this year. Thus, presence of inner problems in operational activity, management, and sales is evident. In the realities of modern business, which becomes more and more international, it is no more enough just to stay afloat. Absence of true elaborate competitive advantage of using the strong sides of the business is one of the major weaknesses hindering the development of the company. Additionally, absence of prompt adaptation to market conditions and unavailability to introduce novelties are internal factors that restrain growth in comparison with competitors that use the opportunities more effectively. Consequently, it may be advised for the company to introduce the unique products and offerings for the customer. The standard assortment, which may be found almost in any brick-and-mortar or online store, is considered as a rather weak point. Considering the situation with bankruptcy, it must be said that according to the companys official statement, crisis hit American and Canadian markets (Hirsch, 2017). Still, the tendency of the latest years with no annual profit and increasing debt cannot completely bypass at least the image of Toys R US in the world. While the business will be engaged in court cases and debts payment, it will be an unambiguous minus influencing their success on the domestic and world markets.

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Based on positive and negative processes and companys current results, it is possible to consider what opportunities for development are available for Toys R US in the short- and long-term perspectives. It is important not to forget that in addition to internal factors, there are also the business environment with successful competitors, the changing trends and tastes of customers, and the general principles of doing business in the era of information technology and globalization. Therefore, having the basis of quiet, significant stores network with distribution and logistics system, Toys R US may use it for improvement of the online part of the business. As the global market is well disposed to shopping via the Internet, the company may develop the official web store with new and unique assortment, special offerings (for example, on the holidays eve), and loyalty programs. The possibility to receive an order via shipping service or in the nearby Toys R US store will engage the customers to use the most convenient option. Currently, the company also has the great opportunity to use the strategies of digital and social media marketing and various analytics tools, for example, Google Analytics). Moreover, cooperation with both global toys manufacturers such as the LEGO Group and worldwide online trading platforms such as Amazon is highly advisable. Considering the last mentioned opportunity, quality and price of the goods offered must be competitive enough to attract the potential customers in the conditions of the huge variety. Again, uniqueness and time of delivery are considered too. Summarizing, total customer-oriented service using every opportunity to win and to satisfy the customer is the right strategy for Toys R US today.

However, threats are always present in the business conduct. For the company, which has experienced bankruptcy lately, threats may be decisive factors that can determine the success or failure of the whole enterprise. Without any doubt, the major threat for the company is the large number of competitors. Nowadays, many retailers offer products of various manufacturers. Based on the example of the LEGO Group, customers have a wide choice of places in which LEGO products may be bought. Thus, Toys R US must take care that customers choose their stores or shop online on their site, not the competitors one. The steps to solve this issue may involve convenient location, competitive price, special offering, prompt delivery, wide assortment with alternatives available, presence in the top ten of the search engine, advertising, or activity in social networks. Differentiation is no more the task of the modern customer. This issue is under the responsibility of the business itself. Regarding the present market position of Toys R US, the company is in the situation when the administration must perform even being not ready to do it at high level. The great number of stores (more than 1,500) and huge staff (about 65,000 people) need constant financial support (Isidore, 2017). Furthermore, debts do not allow deploying a promotion campaign to the desired extent with the result in the short term. Therefore, minimization of negative sides (spoiled image, debts, etc.) and constant steps towards modernization are the urgent threats that Toys R US need to overcome.

RBV Analysis

Based on the SWOT analysis, it is evident that despite having significant strengths and opportunities, Toys R US still are facing financial and operational problems. In order to analyze precisely the source of the companys difficulties, resource-based view may be applied. With its help, it is possible to define those fundamental means whereby the enterprise operates to achieve its goals (Dess, McNamara, Eisner, 2016). Both material and not, they are extremely significant. In the conditions of the large debt commitments, the attraction of major investment and costly financial analysis of the business with fundamental changes seem to be not entirely logical and possible. It will be much more effective at first to use those resources that are unique, valuable, and indispensable for Toys R US. This step allows reaching the competitive advantage in the most efficient manner both in terms of financial and time costs.

Furthermore, the enterprise owns a significant basis of tangible resources. Stores are opened in many countries of the world with the staff hired. It gives the company an advantage in the field of well-established retail trade. Capital cannot be considered tangible resource for today as the company has not gained profit in the latest years. Talking about intangible resources, it is the companys reputation of reliable partner even despite the crisis. The adjusted product selection and procurement processes are also considered as the established means of operating business. Toys R US cooperates with the number of corporations and companies of the smaller scale. Toys, furniture, and other childrens goods manufacturers, large trading platforms for online sales worldwide, suppliers, and service companies are among them. It is also important to note that cooperation with some of the partners has become one of the reasons for the debts and bankruptcy due to non-fulfillment of financial obligations. Nevertheless, some other partners have not refused from cooperation with the company during hard times and tried their best to help Toys R US find a way out of the crisis. Relationship with regular customers also refers to intangible resources. The business is also quite strong in offering wide range of goods. These expertise and readiness to offer many products necessary for the target audience have also been reached after the years of tries and analysis. These skills can be attributed to organizational capabilities of the enterprise (Jurevicius, 2013). In case of adding to it a little more willingness to change and to adapt to the new realities of the market, it can also be considered a significant though not tangible advantage.

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Each of the mentioned above resources has its conditional price for the company and can be differently evaluated in the industry in general. According to VRIN framework, the conditional weight of the resource increases or decreases depending on how much it is valuable, rare, impossible to be imitated, and non-substitutable (Dess, McNamara, & Eisner, 2016). The presence of tangible resources of the company enables its efficient work and development. These resources include already established network of brick-and-mortar stores and presence of platform for online trade. Partnerships, contracts, and communication in the business world are also no less important. Talking about uniqueness and rare resources not available for competitors, the image of the company can be added to this category. However, the reliability of this item can be questioned. Thus, it is the relative source of competitive advantage. The difficulty of imitation allows the enterprise to go ahead the opponents for a relatively long period of time and profit from it. However, in the case of Toys R US, all their resources can only be considered as temporary valuable. The last characteristic of non-substitutability also is not developed within the company today. However, in case of minimization of the threats and risks as well as full implementation of opportunities available, Toys R US has significant chances to own this strategic uniqueness in the future. For sustainable competitive advantage, all of the four characteristics of the resources must be positive. In the Toys R US case, it is evident that some of existing parts are incomplete and the others are missing. Thus, even presence of some positive signs does not guarantee immediate success. For establishing the path of sustainable growth, the company still has to introduce major steps.

Being a part of the attractive business industry, the company with its history and brand name has faced the crisis in 2017. Nowadays, the sphere of various goods for children is overflown with manufacturers and retailers, and competition is high. Therefore, having evident strong sides, it is still not easy to surpass competitors and to surprise consumers. As it has been already mentioned, just staying afloat is no more enough. Summarizing, Toys R US should develop its flexibility in the operational and managerial activity. Implementation of new strategies, tools, and opportunities is likely to give the company a new milestone in growth. Additionally, for reaching the state of sustainable development, the present weaknesses must be solved in the nearest time. The optimization of debt obligations and lack of litigation will enable focusing on improvement of the business and search for solutions for maximum satisfaction of the potential and existing customers needs.

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