ACC3612 Risk Management and Internal Control

Week 4

SWOT Analysis General Example

Strengths.

Toys R Us Example

Toys "R" Us has in excess of 1500 s pers!ores in !he Uni!e" S!a!es an" Worl"#i"e$ %! also o#ns !he &a&y &ran"' (a&ies R Us #hich a""s ano!her )00 * s!ores$ Toys "R" Us also mar+e!s s ccessf lly on !he We& ,in colla&ora!ion #i!h Ama-on$com.$ %! has a h /e "is!ri& !ion ne!#or+ !ha! &enefi!s from a"0ance" lo/is!ical sys!ems$ 1a0in/ so m ch shelf space means !ha! !he company has a s!ron/ &ar/ainin/ posi!ion #hen i! comes !o & yin/ prices from man fac! rers$ %! ! rne" o0er more !han 211 &illion in )005$ The company sells many "ifferen! pro" c! ran/es$ There are &enefi!s an" "isa"0an!a/es !o !his$ 1o#e0er' a +ey s!ren/!h is !ha! !he company has a "i0ersifie" por!folio of pro" c!s' #hich means !ha! #hile some ran/es are n"erperformin/' o!hers are o ! performin/$ As lon/ as !echnolo/y allo#s !hem !o spo! s ccesses an" !hen !o foc s pon !hem' !hey ha0e a compe!i!i0e s!ren/!h$

Weaknesses.

ACC3612 Risk Management and Internal Control

Week 4

These "ays' Toys "R" Us has no sin/le an" s s!aina&le compe!i!i0e a"0an!a/e' o!her !han &ran"$ %n !he US' i!s !ra"i!ional s!ron/hol"' !he company has los! i!s n m&er one posi!ions as !oy re!ailer !o Wal34ar!$ (ein/ lar/e may no! &e eno /h' #hen c s!omers can /o !o ano!her lar/e re!ailer an" & y !he same an" similar /oo"s' some!imes /e!!in/ a &e!!er "eal$ As #i!h all re!ailers in Wes!ern socie!y' Toys "R" Us is hea0ily "epen"en! pon s ccessf l sales " rin/ !he final 5 ar!er of !he year$ They nee" !o ma+e profi! from 6hris!mas$ Re!ail is no!orio sly seasonal an" Toys "R" Us is no "ifferen! !o o!her re!ailers$ %n fac! i! co l" &e ar/ e" !ha! !oys are a +ey 6hris!mas presen! pro" c!' so are e0en more li+ely !o &e "epen"en! pon seasonal sales$

Opportunities.

There are oppor! ni!ies for 7oin! 0en! res an" s!ra!e/ic alliances$ Toys "R" Us #or+s closely #i!h Ama-on$com an" i!s &a&y pro" c!s ca!e/ory$ This no! only plays !o !he s!ren/!hs of &o!h companies' & ! also pro0i"es oppor! ni!ies$ Ama-on is s!ron/ a! !he online par! of !he & siness' crea!in/ !he #e& si!e' #areho sin/ pro" c!s an" "eli0erin/ !hem !o c s!omers$ Toys "R" Us #ill se i!s & yin/ po#er' & ! l!ima!ely carries !he in0en!ory ris+ ,i$e$ if i! "oesn8! sell' i!s money is !ie" p in physical s!oc+.$ Toys "R" Us is a /oo" nei/h&o r$ 9or example' in )005 i! #en! o ! of i!s #ay !o help !he :o isiana 0ic!ims of h rricane ;a!rina$ Toys "R" Us "ona!e" six !r c+s f ll of !oys an" &a&y s pplies incl "in/ "iapers' #ipes' an" form la' as #ell as &a!!eries an" #a!er !o m l!iple loca!ions !ha! #ere ho sin/ e0ac ees$ (a&ies "R" Us has also "ona!e" o0er 1< palle!s of &a&y an" chil"ren8s clo!hin/ !o !he na!ional chari!y ;i"s %n =is!resse" Si! a!ions ,;%=S.$ S ch associa!ions #ill help !o s s!ain i!s &ran" #i!h +ey cons mers$ As #i!h many of !he &ran"s consi"ere" &y 4are+!in/Teacher$com8s 9REE SWOT analyses' !he %n!erna!ional mar+e! is 0ery impor!an! !o Toys "R" Us$ The ci!i-ens of emer/in/ na!ions s ch as 6hina an" %n"ia are /e!!in/ #eal!hier an" &e!!er e" ca!e"$ 6ons mers ha0e more "isposa&le income an" leis re !ime' an" &o!h of !hese co l" increase o0er comin/ years$ The !ypes of /oo"s an" ser0ices re!aile" &y !he company co l" &e mar+e!e" more a//ressi0ely o0erseas$ Toys "R" Us co l" loo+ o ! for s!ra!e/ic par!ners' or in"ee" /o i! alone$

Threats.

There is s!ron/ compe!i!i0e ri0alry in !he !oy mar+e!' no! only form Wal34ar!' & ! also from ;( Toys an" Tar/e!$ The !oy &ran" is of!en no! associa!e" #i!h !he re!ailer$ So if a par!ic lar +i"8s !oy has /ra&&e" !he ima/ina!ion an" !he spen"in/ po#er of i!s !ar/e! cons mer' any re!ail o !le! is as /oo" as ano!her$ =ifferen!ia!ion is "iffic l!' an" !oy re!ailers of!en ha0e !o compe!e on price' ran/e or a0aila&ili!y$ :e!8s face i! !o"ay 6hina an" similar lo# cos! man fac! rin/ para"ises are #here !oys are ma"e$ :o# man fac! rin/ cos!s are impor!an! if mar/ins are !o &e re!aine"$ The pro&lem' an" po!en!ial #ea+ness' is !ha! co n!ries an" !ra"in/ comm ni!ies !en" !o impose 5 o!as an" !ariffs in or"er !o pro!ec! local man fac! rin/$ All co n!ries "o i!$ 1o#e0er' Toy R Us co l" po!en!ially &e lef! #i!ho ! !he !oys people #an! !o & y if em&ar/oes are implemen!e" on co n!ries s ch as 6hina$