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Market Driven Leadership And Strategy Essay

4819 words - 19 pages

Market Driven Leadership and StrategyIntroductionToy's "R" Us, TRU, is one of the largest toy retailers in the United States of America, and it was started by Charles Lazarus.This essay is divided up into three parts. The first part, analyses TRU's situation in 1993. The analysis starts at an external macro economic level and then moves into an internal micro level.The second part will discuss TRU's objective to increase the volume and the way in which they should go about this.In the third part we discuss how market orientated Charles Lazarus and TRU are. We also show how the marketing orientation culture within TRU can be increased and how this could be done. The questions, can this be done with Charles Lazarus as a leader of the company?Part 1: Situation analysisThis part deals with TRU's history and its economic surroundings (PEST-factors), the characteristic traits of this industry (Diamond model), competitor analyses (Five forces model), value chain analysis and a core value analysis. These analyses evoke an evaluation of TRU's strategy and future development.Brief historic overview1940s 50s 60s 1970s 1980s 1990s- Lazarus began selling baby furniture- Opens Toy store- Opens Baby supermarket- Lazarus Sold his 4 stores to Interstate stores - Grew from 4 to 47 stores- Interstate files bankruptcy- New company name Toys "R" Us- Lazarus CEO - TRU Sales at $3.14 billion- Best & Worst time for Toy industry- Start expansion abroad- Open Kids'R'U's - 540 stores + 25% of US market- Increased price competition- Break through in JapanKids'R'U's Profit $45 million- Books'R'U's- Movies'R'U'sAnalysis on a macro economic levelPolitical: 1991 the war in Iraq breaks out.Economic: - There was a recession between 1998 and 1992.- Intense price competition.- Low demand.- Slow growth in Japan and expected to stay slow.Social and cultural: - Became frequent with both parents working within the household, therefore creating double income into the households.- There is a trend to spend more money on children. 3 times as much as in the sixties. - During the 80's and 90's there was a growth in the number of children in the US.Technology: - Break though in computer technology and the Internet. - Electronic billing and product ordering.In order to understand the political, economical, social and technological affects on the multinational corporation Toy's R Us. We have decided to use a PEST analysisIndustry analysisThe analysis starts on a macro economic level with the branch or industry, the model that we have chosen to use is Porter's dynamic diamond model consisting of; the supply conditions, demand condition, related industries and the arena of competition.The supply conditionFor the toy retail industry there is a large amount of capital needed for it to function. Capital is needed to build and maintain large warehouses, stores as well as inventory.The stores, which generally are very large, need human capital in order to run and maintain the stores and...

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