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Executive Summary: Vermont Teddy Bear was started in 1981 making teddy bears designed and made in Vermont with US manufactured materials. Throughout the 1980s the bears were sold through retail outlets. Changes in the retail environment led the company to look for other distribution channels and the company bean to focus on the Bear Gram. Advertising focused on local radio personalities which lent credibility to the product. This approach allowed flexibility especially important because Vermont Teddy Bear’s main selling point was the personalization of each bear for the recipient. Advertising copy could easily be tailored to the market and particular time of year. The company remained profitable throughout the late 80s and early 90’s. Beginning in 1995 a series of changes in the company including two CEOs, two name changes and the expansion into retail and catalog sales began to affect sales and profits. During this period of time the board of directors was made up primarily of large stock holders of the corporation with little retail, phone order or direct marketing experience. As of June 30, 1998, 58.8% of the stock, certainly a controlling interest, was owned by 4 people with no experience in what Vermont Teddy Bear was trying to do. Strategic planning was in the hands of unqualified individuals. Sales in the retail and catalog areas were less than predicted and the company decided to focus on the Bear Gram and also to reduce costs by exploring off shore sourcing of materials and possibly manufacturing. Though this was contrary to the companies philosophy that Made in America was more important than cost. Elizabeth Robert joined Vermont Teddy Bear in 1997 and began to cut costs and position the company for future growth. A key factor in returning Vermont Teddy Bear to profitability was realizing that the company was not in the bear business but in the overnight gift delivery business. Focusing the company’s products and advertising efforts towards the gift business would be key to its success. Basic Analysis: The company had been successful until 1994 when a series of changes began to impact sales. The company went public in 1993 and in 1994 construction of a new plant and retail store began in anticipation of increasing sales. In 1995 founder and CEO of the company, John Sortino resigned to allow a new CEO with experience growing a company could replace him. The company had out grown Sortino’s skill as an entrepreneur.
Approximate Word count = 1608
Approximate Pages = 6.4
(250 words per page double spaced)
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