Toys “R” Us in 1999
I. II. III. IV. V. Introduction The rise of the category killer US Toy industry in the 90’s How TRU lost its competitive advantage Our recommendations to CEO Goldstein
Case outline – Problem statement
In the mid-90’s, Toys “R” Us, the pioneer of the category killer retail format, faced significant competitive threats from mass discounters and warehouse and was losing market share. In January 1999 Wal-Mart overtook TRU as the number one toy retailer in the US, and forced TRU to look for new solutions. This study tries to identify the key reasons for this development by highlighting the following topics: • TRU competitive situation and sources of sustainable competitive advantages • The toys industry in the 90s and expected evolution • TRU in the 90’s and reasons for failure What should TRU do to recover its leading position and succeed in the e-business?
Case outline - TRU company information
Founded in 1948 by Charles Lazarus as a furniture store; First Toys supermarket in 1957; Lazarus goals for TRU were: Eliminate industry’s seasonality effect and sell toys throughout the year; Aggressive pricing policy with low prices; Diversified products portfolio; Choose the best store locations.
Expansion policy increased market share and led to dominant market presence in US as well as in several other countries: 1998: 700 stores in US and 456 stores abroad.
New business alternatives by introducing catalogue sales, broadening its scope (Kids "R" Us, Babies "R" Us, Books "R" Us, Parties "R" Us).
I. II. III. ...