1 Case Study Build-A-Bear Games Online



targets new customers, consisting of both children and adults. It also periodically featuresspecific new product introductions and promotions as a means to increase customer volumeto stores. The company also engages in radio, print and online advertising to integrate itsmessage across various touch points and has begun utilizing affiliate marketing opportunitiesin other on-

line spaces that share the company’s values and target groups.

Build-A-Bear has also created a virtual world web site, primarily for children at bearville.com with enhanced capabilities, customization options and social connectivityfeatures. This has been initiated with the aim of promoting brand recognition and raisingawareness of in-store products and events.Furthermore, Build-A-Bear provides

customers a highly interactive ‘theme park’ experience

in stores. This approach is very much centred on allowing each customer to personally designa teddy bear through an eight step process (Choose Me, Hear Me, Stuff Me, Stitch Me, Fluff Me, Dress Me, Name Me, and Take Me Home) in which the animal is fully put together. This

involvement of the customers in designing their own toy not only ensured customer satisfaction but has made Build-A-Bear so successful that in 2008, the company had net salesof $467.9 million and a net income of $4.5 million (Bewerten, 2009). Moreover, the companyalso achieved the 25



on Business Week’s Hot Growth list of fa

st expanding smallcompanies with CEO Maxine Clark winning

Fast Company’s Customer 

-Centred Leader Award as well (Shinn, 2010).


There are three critical strategic issues facing Build-A-Bear that may affect its long-term performance, as well as its local and international financial outlook. These include whether Build-A-Bear is able to ensure consistent growth, if it can continue to build brand recognitionas a destination that provides affordable, experience-based retail stores and if it can overcomeerratic changes in revenue and decreasing contribution margin to overall profit due to higher additional costs and expenditures.This essay would scan Build-A-

Bear’s environmental climate using a political, economic,

social and technology (PEST) analysis,

use Porter’s five

forces model to analyze the


business strategies and discuss its strengths, weaknesses, opportunities and threats(SWOT) to

examine closely the core competencies that drive Build-A-

Bear’s success.

INTRODUCTIONBuild-A-Bear Workshop, Inc.is anAmericanretailerheadquartered inOverland, Missouri, thatsellsteddy bearsand otherstuffed animals. Customers go through an interactive process in which the stuffed animal of their choice is assembled and customized during their visit to the store. Build-A-Bear Workshop is the largest chain that operates in this style. The company has been acclaimed for the quality of its working environment, especially as a workplace for teenagers.What exactly happens when you step into a Build-A-Bear Workshop store? You bounce, skip andgiggle your way through our interactive bear-making stations, creating your very own personalized stuffed animal. With more than 30 furry friends to make and hundreds of outfits andaccessories to choose each Build-A-Bear experience is a new one.The first Build-A-Bear Workshop opened in the St. Louis Galleria in October 1997 with immediate success. The toys were popular with teenagers and young couples, as well as families with children. During the Christmas shopping season, the store was so busy children had to take a number and wait their turn.The charm of the Build-A-Bear concept coupled with its uniqueness earned the company industry recognition, includingChain Store Age's Best New Retail Concept award.Playthings Magazine,

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