Case 27

The Vermont Teddy Bear Co., Inc.: Challenges Facing a New CEO

I. CASE ABSTRACT
John Sortino founded the Vermont Teddy Bear Company (VTBC) in 1981 by selling handsewn teddy bears out of a pushcart in the streets of Burlington, Vermont (Wheelen & Hunger, 2004). Mr. Sortino's motivation for making the teddy bears in the United States cultivated while playing with his son, Graham, and after noticing his son had many stuffed animals that were made in other countries (Wheelen & Hunger, 2004). Since its inception, the company's focus has been to design, manufacture, and direct market the best teddy bears made in America; using quality American materials and labor (Wheelen & Hunger, 2004).
Throughout the late 1980's and into
• Return to maximizing returns in the radio Bear-Gram business

3. Strategies
• A Strategy of aggression growth based on Robert's lead
• Movement from an entrepreneurial to company into its future success as being a professionally managed organization
• Offshore sourcing of materials and manufacturing in an effort to lower the company's cost of goods sold and to broaden its available sources of supply
• Marketing its bears as an attractive gift or collectible for both children and adults.
• Market personalized teddy bears delivered directly to recipients as gifts for holidays and special occasions.
• Use offshore manufacturing alternatives to move to broader price points
• Expand from a regional brand to a national brand to expand into larger markets
• Reposition the company
• Move offshore to provide this company with an opportunity to become more profitable

4. Policies
• Committed to understanding its potential offshore partners
• Ensuring that its partners provided decent, lawful working conditions
• Required that all offshore vendors sign a written statement prior to any business dealings
• Essential to its business are quality, variety, and creativity of the company's products
• Commitment to customer service
• Use of the best available materials
• Guaranteed for life
• Repair or replace any damaged or defective bear at any time

II. CORPORATE GOVERNANCE
A.