SWOT Analysis : Toys R Us | Assignment

SWOT Analysis

SWOT Analysis 1
Introduction
The main purpose of this report is to understand the concept of “SWOT Analysis”. In this
paper, the SWOT Analysis will be done to examine the business strength and weakness of the
business. Toys R Us has been taken into consideration to implement the SWOT Analysis. Toys
R Us is toy manufacturing company which is well known to have fun (Toys R Us, 2019).
SWOT Analysis
SWOT Analysis is a strategic planning technique that can be used to help the company to
analyze the strength, weaknesses, opportunities and threat. This analysis helps the company to
beat the competitors. It is the decision making process that can be used to evaluate the strategic
position of the company in the industry (Gürel, & Tat, 2017). This strategic management tool
helps to analyze the external and internal factors that are favorable and unfavorable to attain the
objective. This strategic tool assists to gain the competitive advantage in the market. SWOT
Analysis has been classified in two categories such as external and internal factors. External
factor includes the strength and weaknesses and internal factor includes the opportunity and
threat (Mind Tools, 2019).
Strength: Strength defines the characteristics of business which is beneficial for the company to
operate the business (Ansoff, et. al, 2018). There are many factors that help the company to gain
the competitive advantage in the market and these are:
Champion: It has been analyzed that the company provides the several of toys due to which it
has high brand image in the market. Game toys and education toys are the core products of the
company that helps it to grasp the market share (Toys R Us, 2019).

SWOT Analysis 2
Stores: Toys R Us provides the goods to the consumers directly without taking time as it has
offered the goods through their stores. It was one of the iconic stores in the nation as the kids
grow with those toys. Iconic stores are the main strength of the company that helps it to drive the
business.
Satisfaction of consumers: It is observed that the company provides the direct selling services to
consumers. Direct selling services helps the company to satisfy the consumers by addressing
their queries face to face.
Weaknesses: Weaknesses defines the characteristics of the business that affects the business in
the negative terms. There are many reasons due to which Toys R Us closed the business. It is
essential for the company to focus on these areas so that it can improve the business and operate
effectively. The weakness factors of Toys R Us are as given below:
Financial position: It has been analyzed that the financial position of Toys R Us is not good as it
has less opportunity to raise the capital. The company does not have the ability to operate the
business just because of less finance to pay the expenditure. It is found that the company gets
closed due to bankruptcy and closure. The company has huge debt $5 billion which is not able to
cover and get bankruptcy (Lieber, 2018).
Lack of online retailing: It has been noticed that the company does not operate the business
through online. The company does not provide the goods to consumers through online due to
which the sales have been decreases and it is also a reason of closing the company. Lack of
online presence is also a weakness for the company.
Opportunity: Opportunity is the external factors that help the organization to achieve the
success. It has been seen that Toys R Us have less number of opportunities to operate the

SWOT Analysis 3
business successful as the company have enough money to pay expenditures and invest in further
activities (Lasserre, 2017). Although, there are some opportunities for the company to establish
the business again and these are given below:
Raising Capital: It has been determined that the company is not able to generate the income due
to high amount of debt. As the company has high brand image and also satisfied with the
consumers due to which it has the opportunity to raise the capital by issuing the shares. Equity is
the best strategy to raise the capital to operate the business (Toys R Us, 2019).
Online retailing: It is observed that online retailing is the best opportunity for the company. It is
noticed that the company trade the business through retailing channels due to which it has to
close the business. It is suggested that the company has to operate the business through online
market.
Threat: Threat states the factors from which the company can face the challenges in the coming
future (Rothaermel, 2016). There are some factors that can be affects the business to operate and
these threat factors are:
High Competition: It is observed that the company has high threat of competition as there are
many companies in the market that operate the business in the similar industry. Carters, BOTI,
Walmart, Fisher Price and many others are the main competitors of the company due to which
the competition for the company is high (Colville, 2018).
Online Marketing: The online retailing companies such as Amazon enter the market due to
which the companies have high threat to operate the business for long time (Bomey, 2018).
Nowadays, people prefer to buy the things online due to which the companies have high threat to
close their companies.

SWOT Analysis 4
Conclusion
At the end, it is concluded that Toys R Us has closed the business but it is observed that
the company has the opportunity to expand the business. Apart from it, it has been found that the
company has some weaknesses due to which it can face the challenges in the coming future
that’s why; it need to focus on it to improve the business. It is concluded that SWOT Analysis
the strategic tool that can helps the company to establish the business again.

SWOT Analysis 5
References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Bomey, N. (2018). Toys R Us blames Amazon, Target, Walmart for death blow. Retrieved From:
https://www.usatoday.com/story/money/2018/03/15/toys-r-us-liquidation-amazon-target-
walmart/427209002/
Colville, W. (2018). Amazon’s competitors are catching up, says former Toys R Us CEO.
Retrieved From: https://www.cnbc.com/2018/10/26/amazons-competitors-are-catching-
up-says-former-toys-r-us-ceo.html
Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Lieber, C. (2018). Why bankrupt Toys R Us might not be dead after all. Retrieved From:
https://www.vox.com/the-goods/2018/10/3/17932344/toys-r-us-liquidation-coming-back
Mind Tools. (2019). SWOT Analysis. Retrieved From:
https://www.mindtools.com/pages/article/newTMC_05.htm
Rothaermel, F. T. (2016). Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Toys R Us. (2019). About us. Retrieved From: https://www.toysrus.com/about-toysrus/about-
us.html