1a. Analyze the macro-environmental and competitive environment (including strategic groups if appropriate) of Toys R Us in the brick and Mortar and on line segments.
The toy and hobby store industry is highly concentrated. It includes about 12,000 stores and combined their revenues are at almost $20 billion. Young children (under the age of 12) are the drivers of the toy store industry and this specific population is growing at exponential rates. In order to produce profit, you must be able to generate store traffic and effective merchandising. The general mass-market merchandise retailers are huge competitors and they continue to grow. As these mass-market merchandise retailers continue to grow, their toy departments are growing as well. This market also has the smaller toy stores, such as KB Toys, that are working really well in the ever-growing mall industry. Another competitor of the individual toy stores is the electronic store. Because the popularity of electronic toys and video games continues to increase, the electronic stores pose a threat to the individual toy store. As far as the online segment goes, everyone is online now, but ToysRUs.com has the competitive advantage – it has its parent company’s name to back it. Also, the competitors that are present do not offer as wide a variety that ToysRUs.com offers. Although the online segment is doing well, the actual brick and mortar stores are still a threat. Wal-Mart will always be a competitor in the brick and mortar segment as well as the online segment.
1b. How has Wal-Mart changed competitive conditions?
Wal-Mart came into this market and is selling toys at extremely low prices. They are able to do this because they ...