Question

If you were the CEO of Toys R Us: - Explain what caused Toys R Us to fail. - What would your strategy and approach be to turn the Company around? Explain. - What would you have done to change the Company’s fate, so that it would be thriving today instead of going out of business?

Answer 1

Toys R Us is a 15% of the US toy market. The reason for their failure is many but to discuss a few as follows:

1. Huge debts and failing to pay their lenders, they filed for bankruptcy in September 2017. They have not been able to restructure their debts.

1. Lack of innovation and following a conventional method conducting business: The started huge toy stores in 1950’s in the countryside where it meant leisurely drive to the countryside and an outing where kids could enjoy some time at the toy store, this system was also enjoyed till 1990’s but now with toys available at all supermarkets and parents being rushed for time, would not venture to drive out for a Barbie easily available online or nearby superstore. The out of town stores were left with zero customers.
2. No Online Presence: They have no presence in the e-commerce market and have not started an online promotion of sales strategy. The products sold in the Toy R Us are easily available online at much better prices.
3. Customer Experience: The company has not reinvented and reworked the store experience to make it entertaining or value add the buying experience. They have a normal stacked store which makes it boring for the children, unlike another block building brand which plays with Childs mind and encourages store visits. The children find no excitement or enjoyment from visiting the store.
4. Expensive store: They have kept prices at a higher level though they have not changed their policies and charge despite discounts and ongoing promotions.

My Strategy as a Ceo would be as follows:

1. Start online store and start social media promotions as follows:

• Introduce special games and puzzles encouraging interactive play and give special gifts to a lucky few.
• Give offers and special discounts for online purchase
• Encourage store visits with coupons and bundled offers

1. Start a PR campaign: Hire a good PR agency to rework on the image of the brand which has taken a beating driving our sales and company spiral downwards.
2. Rework on the in-store visits and promote them online by use of big screens, playing kiddies movies and hold shows for the children.
3. Start an international chain of stores small accessible in the malls to create a bigger market visibility
4. Start stores in many new malls in the city and promote them in the community
5. Participate in environment-friendly and CSR activities, give some offers in the community encouraging store visits
6. Work with preschools and promote events and shows. Encourage their visits as a part of education and learning where store employees make it interactive and fun.
7. Special training for staff and team to make it a fun place to visit and encourage interaction.
8. Create a customized range of products available only exclusivity at the Ty R Us stores.

To sum it up the strengths of Toy R US are many to name a few they are already there in the retail and just have to revamp and retrain their strategy to elevate the brand image, create innovation and improve the customer experience.