Organizations that fail to innovate find themselves in a situation where they have to restructure themselves to stay afloat. Use the provided articles to support your understanding of the company’s situation.
Toys R Us
Discuss how reorganization of its business structure would or would not have helped them meet new market challenges. In your response, address the following:
- Specify at least 2 reasons why you think reorganizing was or was not necessary, and provide an explanation for each reason.
- Suggest 2 strategies you think could have improved the companyâ€™s efforts to meet current market challenges and remain sustainable.
PLEASE RESPOND TO CLASSMATE DISCUSSION WHETHER YOU AGREE OR NOT & A DETAILED WHY: The first reason Toys R US had to reorganize was because of Walmart. Toys R Us was once king of the toy castle. In the 1990’s, it was the biggest toy seller in the U.S. expanding rapidly as it pushed out smaller chains. (2) Another reason was because Toys R Us was in debt, and they failed to find a buyer for the business. Yes, a couple hundred stores were set to close to help the rest get healthy. The company’s debts were too much to bear. Toys R Us saddled with debt when Bain Capital and other firms took the company private in 2005. By the time the company was approaching bankruptcy in 2017, it still had about $5 billion in liabilities. Those debt payments turned out to be a metaphorical anchor around mascot Geoffery the Giraffe’s long neck. Toys R S was starting at an inherent disadvantage because of the debt load. Terrible timing, Toys R Us filed for bankruptcy in September instead of shortly after the holiday shopping season turned out to disastrous. It was extremely bad luck. During a period in which the company needed to focus primarily on executing a strong holiday season, the bankruptcy case was an epic distraction. Two strategies that could have improved the companyâ€™s efforts to meet current market challenges and remain sustainable are (1) Focusing on repairing relationships with suppliers that demanded cash to slash the debts. (2) Improve the web experience (3) Invest in delivery (4) Build on baby products.