This 5 page Vermont Teddy Bear analysis is based on Michael E. Porter's theory of competitive forces, including threat of new entrants, rivalry, threat of substitutes, bargainin power of buyers and suppliers, and power of stakeholders. Bibliography lists 4 sources. jvTeddy2.rtf
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foothold, and how it will maintain it. Solomon (2000) reports that in 1992, Vermont Teddy Bear was one of the upstart .com businesses
making its product available over the internet, and by the end of the year, it was number 80 on the list of Fortune 500 companies (Solomon, 2000, 36). Although the
then-CEO made disastrous strategic decisions in 1993, the company fully recovered and has risen to the top of the industry. As such, Vermont Teddy Bear is now subject to competitive
forces and a slow down in sales for the first time in a decade, indicating the need for new strategies. Threat of
New Entrants According to Michael E. Porters theories on competitive forces, whenever a company shows increased profits, there will be new entrants to
the industry. Although Care Bears and Pooh Bears predate Vermont Teddy Bears, the former did not go for sale on the internet as early as Vermont Teddy Bear, which was
also a home-made product with which they could not compete directly. Therefore, they are new entrants offering a threat to Vermont Teddy Bear.
Vermont Teddy Bears largest competitor, according to Hoovers is 1-800-FLOWERS, an internet seller of gifts that compete directly with Vermont Teddy Bear for holiday sales, e.g., Mothers Day, Valentines
Day, Anniversaries, and Christmas. Other competitors include eBay, Amazon.com, which offer various teddy bears brands via internet sales. In order
to compete, according to Porter (1979), Vermont Teddy Bear will begin decreasing prices and adopting other strategies, including diversification. Although it made poor product diversification choices in 1992, according to