Competitive Advantage Case Study

Toys "R" Us: A "Category Killer" Killed?

OR

Abstract:
US based Toys ‘R’ Us (TRU) was not only one of the first toy supermarkets in the world but also the No.1 toy retailer in US. The company was known as a category killer and had ruled the market for years. In the late 1990s though, when discount giants Wal-Mart and Target entered the market, TRU started facing problems. The company tried to compete with discounters but its strategies did not work favourably and it faced financial problems. The situation was so severe that the company was considering completely selling off its toys business. The case details the circumstances that led TRU into problems and forced the company to take some major decisions. Finally, the case discusses the actions taken by the company and its plans for the future.

Pedagogical Objectives:

• To discuss the way TRU revolutionised the toy retail industry by selling a wide range of toys in one place and becoming a category killer, thereby literally wiping of small toy stores and department stores
• To discuss the concept of specialty retailing, get an overview of the US toy market and competition in the market
• To discuss the factors that led to a downfall in the company’s fortunes

Keywords :  Toys R Us; Specialty toy retail; Core Competency & Competitive Advantage Case Study; Toy industry; toysrus.com; Online toy sellers; Category killer; Big box stores