Build A Bear Case

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Build-A-Bear Workshop is facing an obstacle trying to increase revenues in order to expand and sustain its competitive advantage. Revenues have been declining since 2008 mainly due to the declining of the economy, rise of competition, and sociocultural change. Many competitors have entered the interactive experience market and kids nowadays are more attracted to electronics instead of playing with toys. In order for Build-A-Bear to remain competitive and continue to dominate the interactive experience market, they must adopt new strategies such as allowing customers to order and customize personalized bears from their website and target a different demographic market by offering products such as human sized teddy bears and add-on products.
Currently in Build-A-Bear’s websites, they only allow customers to shop for bears with different pre-made designs that people might or might not like and customers have no other options but to choose from those bears. These options defeats their business model where they are known for allowing customers to customize and personalize their bears based on their preferences. What is proprietary about Build-A-Bear is the overall experience and culture within their stores. There are many factors that are contributing to the success of their store experience, but it all starts off with their employees. Workers contribute and collaborate with customers, which leads to an above average employee retention rate. They are also very selective in the hiring process and ensure that the chosen associates stayed actively involved in the stores. Due to the satisfying experience in their locations, the chain’s overall customer satisfaction is close to 90%. Also, 80% of their customers are repeat guests who planned their visit in advance. Even though hands on experience is more interactive and creates an emotional bond between a customer and the bear, bringing a similar experience virtually in the internet environment will help Build-A-Bear adjust to the change in customer preference. According to the case, online/internet toy revenues grow 22% from 2009 which indicates a positive future in the online business. Capitalizing on their brand, creativity, and positive experience, they should allow customers to design and customize personal bears on their current website. Similar to their Nintendo game that mimics the overall experience in the store, they should expand that model by allowing customers to purchase the created customized bear. Nike Inc. currently allows customers to adjust many aspects of a shoe such as the color, designs, and even text. Build-A-Bear should implement a similar concept where users will have the option to adjust many aspects of a bear that might not be available in their
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Customers would have an option to receive their customized bear either shipped to their premises or delivered to the nearest Build-A-Bear store for pick up. Build-A-Bear’s main target market are children of ages 1 to 14, which represents 80% of their revenues and since this age group shifting their preference in the online environment, they should sell products to other generations in order to continue to expand their business model. Having human sized teddy bears available for purchase and customized through their website would unleash a new revenue stream that would attract older demographics. This new product would be perfect as a gift and would attract many customers especially during Valentine’s Day. Customers would be able to customize their

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