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case presentation - Sydney Knight Allison Lee Kevin Leger...

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Sydney Knight Allison Lee Kevin Leger Xiaotuan Liu
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Company Background Founded in late 1940s by Charles Lazarus First toy supermarket Acquired by Interstate Inc. (department store chain operator) in 1966 Interstate Inc. bankrupt in 1974 Overextended through buying discount chains Court-ordered reorganization allowed continued building of Toys R Us stores Reorganization finished in 1977
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Company Background Rapid growth through aggressive expansion campaign Undercut existing retailers Kids R Us in 1982 International Store in 1984 Went public in 1978 Sales have risen every year Nominal gains in earnings between 1989 and 1991
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Company Background Increased competition from Wal-Mart in 2000’s Sales and profits stagnated in US 700 US stores 2003 sales= $11.6 billion 1993 company operated 1032 stores (581 Toys R Us and 217 Kids R Us domestically) 234 Toys R Us stores managed through international subsidiaries in 18 countries 1993 sales= 7.9 billion Toys R Us 50th largest retailer in world
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Company Strategy- Domestic “category killer” strategy Strong advertising to promote name recognition Discounts on most popular items to create image that everything is discounted Low-cost, low-service, warehouse-style discount store concept In US computerized inventory system used to track demand on regional and store-by-store basis Helped maintain low standing inventories Capitalize quickly on trends
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Company Strategy- Domestic Own fleet of trucks to save on shipping Bargaining power with suppliers Competitive prices but not deep discounts Coupon promotions before Christmas to increase market share Long-term strategy to expand in international market
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Company Strategy- International International operations followed home country strategy, but prices higher due to lack of large- volume discount type stores in international market Inventory=half from US inventory, other half based on local culture demands 1993 franchising deals to enter foreign markets with local partners 6 deals made in oil rich developing countries in the Middle East Of 115 stores opened in 1993, 70 were in foreign countries
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This note was uploaded on 02/14/2012 for the course MKT 4443 taught by Professor Robertmcclaren during the Fall '10 term at LSU.

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case presentation - Sydney Knight Allison Lee Kevin Leger...

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