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  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
  • File format: Text
  • Number of pages: 2

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Section 2: What are the strengths, weaknesses and risks of its current strategy?

In modern consumer marketing, having a Unique Selling Position (USP) can offer a significant and differentiated advantage in sales and marketing. For instance, being able to tailor a product to match a customer's requirements and needs will improve the quality and perception of a product or service. For the Build-A-Bear Workshop, its corporate identity pegs on their slogan “The Most Fun You'll Ever Make”. A detailed and comprehensive SWOT analysis highlights the nature and approach of doing business for Build A Bear and will be vital while assessing the firm's strategy. Our project will discuss the role a comprehensive SWOT analysis would offer to discuss the strengths, weaknesses and risks of its current strategy based on the firm's internal and external environment.

(Financial Data from Market Watch)

Unique Selling Position (USP)

In product promotion and marketing, the presence of a cool and catchy slogan helps to differentiate the company from rival companies. For Build A Bear, this unique selling position the firm has created allows it to maintain a presence in international markets. “Having more than 400 retail stores worldwide and especially 21 stores in a socially and culturally diverse Canada, its presence, and position in retail marketing is unmatched”  - Nye, 2008. This is particularly relevant since consumers go through the firm's customizable, involving and interactive process as they wait for their bear to be assembled. This customization happens during the purchase visit at the store and customer satisfaction is of utmost importance, so they feel well served at the end.

“Customer delight implies consumer satisfaction and this highlights a company's achievement in customer services” - Alexander, 2010.

Therefore, it is clear to see Build A Bear's USP is their personalized bears and the whole customer journey through this process.

SWOT Analysis of Build A Bear Workshop

Success in business requires a clear understanding of market forces. The ability to understand the dynamics of an industry is crucial in retaining old customers and attracting prospective new customers.

Build A Bear's tagline is “Where Best Friends are Made”. This tagline will become more relevant when we discuss the strengths the firm offers. The firm primarily targets children, particularly girls  in the 5-16 year old age range from upper middle class backgrounds/families. The firm positions itself as “allowing children to make their own mascot”.


To begin with finances, the firm offers good returns on capital expenditure: Build A Bear Workshop is relatively successful at executing new projects and generated good returns on capital expenditure by building new revenue streams (however, it is relevant to note that Revenue & EBITDA are down in 2017 compared to 2014).

With that noted, it is also important to mention the  strength in the automation of activities which have brought consistency in quality for the firm's products and have enabled the firm to scale production up and down based on the market demand and various other conditions in the market. This has allowed for the expenses and costs to go down with the decreasing revenue lowering the burden on net income/EBITDA/etc. Declines.

 The firm's success in product innovation is also a great strength the firm leverages. In terms of product offerings, the company has expanded to gift cards, clothing accessories, etc. successfully, not only expanding sources of revenue but also reducing dependence on the teddy bear product line simultaneously.

Further, The company has created a lot of sub-brands and expanded their reach to zoos and such other places.  The global and domestic presence of stores all across America, Canada and various other countries (400+ stores worldwide) has allowed the firm to make an unmatched retail marketing presence. This is enhanced by the online ordering capabilities has created a global and reliable distribution system.

The firm has also showed incredible strength in its Go To Market strategies. The firm leverages advertising to increase brand awareness primarily  through commercials and short feature films. It also creates value through the acquisitions it makes (successfully integrated number of companies to streamline operations and build a reliable supply chain).  Build A Bear's focus on it's dealers and distributors have allowed the firm to create a culture where dealers not only promote the products but also invest in training sales teams a for better customer experience.


While the marketing shows success, there is still a lot left to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors. Further, it is important to note the “Create your own animal” statement has created undeniably many legal problems for the company.

Further, financial planning is a field where the company needs to take a lot of control and work to improve it. Many financial ratios  (current asset ratio and liquid asset ratio) suggest that the firm can use cash more effectively. Further, there is no denying the decline in sales and profits over the last few years, even though there was a slight recovery in 2017. The inability to forecast product demand leads to a higher  than normal rate of missed opportunities compared to its competitors. The days in inventory ratio for Build A Bear is significantly higher in comparison to its competitors (Vermont Teddy Bear, Gund, etc).  Further, the profitability ratio  and similar ratios are also below average for this industry.

Even though there is some product line expansion, the gaps in the current product range create a potential lack of choice for customers allowing competitors to grain a foothold in the market. This is compounded since the firm might be a leading organizations in its industry  but struggles to move to other product segments.

Lastly, the lack of success from Research and Development (could't find exact numbers for this) has meant the firm falls short compared to the leading players in the industry in terms of innovation.


The recent changes in the US corporate taxation policy will allow Build-A-Bear Workshop to potentially impact their business strategy and create new opportunities to increase its profitability.

Further, new trends in the consumer behavior will help Build A Bear to leverage its brand name and expand its reach further outside the US. Further, leaning on characters used in games, animations, etc. (similar to what has been done with “Angry Birds”) allows for novel marketing avenues.

There are also various financial opportunities for the firm given the new policies (example, the new environmental policies can potentially level the playing field for all competitors). This provides an opportunity for the firm to create new revenue streams and diversify into other product lines.

Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Build-A-Bear Workshop, Inc.'s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.

Further, new technologies provide opportunities for firms to practices differentiated pricing strategies. Build-A-Bear Workshop should think on similar lines and come up with new strategies that both maintain loyal customers with great customer service and lure new consumers through other value oriented propositions (more to talk about a big recent marketing fail that happened recently in the Threats category).


As mentioned above, Build A Bear had a “Pay Your Age” sale where customers would pay their age in dollars for a bear. There was such a demand for it that they had to shut the sale down, leading to heavy backlash, this is definitely a fail for the pricing and marketing strategy for the firm and leads into our underlying threats.

Further, in this market (media and entertainment toys), demand is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.

The rising pay levels for manufacturing and increasing prices and tariffs in China can also create pressure on profitability of Build-A-Bear Workshop and increase costs significantly.

There is also financial threat due to cross border risks: Build A Bear  operates in many countries  and faces currency fluctuations especially due to the unpredictable political climate in number of markets across the world. Along these lines, the Increasingly isolationist trend in the American economy/Brexit, etc. negatively impacts international sales.

Lastly, except for Toys R Us (who went into bankruptcy last year and later a small pool of debt holders forced them into liquidation), a number of other players in the industry have seen profitability rise in the past years putting more pressure on Build A Bear. Local distributors might also have more bargaining power  since competitors might be willing to pay higher margins to these distributors.

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