Hifsa Shakat
rianne
case_31_pp.pptxCASE ANALYSIS ASSIGNMENT
Introduction
The assignment is case 31.
The organization under review in the assignment is called Build-A-Bear-Workshop.
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Financial Data Analysis- Horizontal analysis
According to According to Accounting Tools 2015, horizontal analysis is the comparison of historical financial information over a series of reporting periods, or of the ratios derived from this financial information. The intent is to see if any numbers are unusually high or low in comparison to the information for bracketing periods, which may then trigger a detailed investigation of the reason for the difference. The analysis is most commonly a simple grouping of information that is sorted by period, but the numbers in each succeeding period can also be expressed as a percentage of the amount in the baseline year, with the baseline
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Income statement
The income statement reveals there is a huge difference between the year of 2008 and the following year 2009. The revenue between 2008 and 2009 shows a big decline in net retail sales, a decline over 15%.
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Balance sheet- statement of financial position
The above statement reveals that the total assets have changed negatively over the last two years, and it was negative percent where it should have been positive if the company was succeeding. The statement points out the negative image that the company’s fixed assets are going down, in this case the company can’t expand and it shows their overall success is very poor at this time.
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Key Success Factors
Build-A-Bear’s success was in the previous years, when they had record breaking profits, and was in top magazines. The income statements show they had some positive income from 2009 through 2010. They had adapted a great overall success when people entered into the stores. They have succeeded product segmentation, and had a different product that entered into the business world. They were able to capture a full on experience from picking out an animal to make, stuff it, name it, and even clothe it. This was the first company to offer an overall experience like this.
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Market Data Analysis
In the beginning, Build-A-Bear workshop marketed their products for ages 3 to 12 years of age. This was their market segmentation, and it was working as profits were high. With very little competitors at the time, this workshop was in high demand, thus giving Build-A-Bear the competitive advantage.
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SWOT-Strengths
-First real company into the market with unique product.
-Build-A-Bear name alone has a competitive advantage over other similar companies.
-Great management and customer appreciation, hands on environment.
-Great causes and charities for special occasions.
-Ranked no. 94 in Fortune ’s “100 Best Companies to Work For” list in 2009 and moved up to no. 80 in the 2010.
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SWOT -Weaknesess
Lack of technology compared to similar stores.
-Kids are seeking more sophisticated entertainment . . . and doing so at younger and younger ages.” Tastes were maturing and becoming more sophisticated at a younger age.
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SWOT-Opportunities
-Add new technology.
-Market to all age brackets of children.
-Add more R&D.
-Expand out of malls
-Make them unique, not like other competitors.
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SWOT-Threats
Competitors entering the market at a lower price
-Competitors adding new technology.
-Changing fads.
Porter’s Five Forces
According to Mind Tools (2015), there are five forces which shape competition in an industry in which an organization operates. The five forces include new entrants into the industry, supplier power, buyer power, competitive rivalry, threat of substitution, and threat of new entry. Build-A-Bear failed to enter into the new technology world, where competitors have found ways to capture consumers. Overall their locations inside malls was starting to lose consumers, people didn’t want to go to the mall just to Build-A-Bear. Their targeting ages they wanted to attract was not working anymore, as kids wanted new technology gadgets.
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References
Accounting Course. (2015). Contributing Margin. Retrieved from
http://www.myaccountingcourse.com/financial-ratios/contribution-margin
Accounting Tools. (2015). Horizontal Analysis. Retrieved from http://www.accountingtools.com/horizontal-analysis
Case 31. (2015). Build-A-Bear Workshop.
Mind Tools. (2015). Porter’s Five Forces. Retrieved from
http://www.mindtools.com/pages/article/newTMC_08.htm
Stuttle, R. & Demand, M. (2014). Define Market Segmentation & Targeting. Retrieved from
http://smallbusiness.chron.com/define-market-segmentation-targeting-3253.html
