Market Driven Leadership and Strategy
Toy'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 analysis
This 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 overview
1940s 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's
Analysis on a macro economic level
Political: 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...