The Vermont Teddy Bear Co. Inc.: Challenges Facing a New Ceo Essay

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Case 27

The Vermont Teddy Bear Co., Inc.: Challenges Facing a New CEO

John Sortino founded the Vermont Teddy Bear Company (VTBC) in 1981 by selling handsewn teddy bears out of a pushcart in the streets of Burlington, Vermont (Wheelen & Hunger, 2004). Mr. Sortino's motivation for making the teddy bears in the United States cultivated while playing with his son, Graham, and after noticing his son had many stuffed animals that were made in other countries (Wheelen & Hunger, 2004). Since its inception, the company's focus has been to design, manufacture, and direct market the best teddy bears made in America; using quality American materials and labor (Wheelen & Hunger, 2004).
Throughout the late 1980's and into
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We will gain additional flexibility with price points. There is opportunity for us to expand from a regional brand to a national brand. While we continue to emphasize the premium teddy bear gift business, we intend to expand into larger markets. There is now a whole new opportunity for us in the corporate incentives and promotions market as well as the wholesale market…Our growth will come not only from expansion of our radio markets but in the corporate and wholesale markets as we use offshore manufacturing alternatives to move to broader price points," (Wheelen & Hunger, 2004).
Robert states, "Our competitors are the people who sell chocolates, flowers, and greeting cards. We target the last minute shopper who wants almost instant delivery," (Wheelen & Hunger, 2004). She also made the comment, "…we are in the gift and personal communications business. Our competition isn't the German toy manufacturer Steiff, it is 1-800 Flowers," (Wheelen & Hunger, 2004).
A. Past Performance
• Total sales in 1989 rose to $1.7 million in 1990 and over $5 million in 1991.
• By 1993, sales totaled $17 million
• Sales growth in excess of 50% prior to 1994 and for 3 consecutive years.
• In 1994 sales totaled $20.5 million
• By 1996 there was a profit of $152, 000
• In 1997, retail sales in Shelburne were 19% ahead of 1995

B. Strategic Posture
1. Mission
To design, manufacture, and direct market the best teddy bears
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