TOYS "R" US: ANALYSIS OF THE ORGANIZATION
Toys "R" Us was founded in 1948. The company operated successfully for 18 years, before being acquired by Interstate Stores in 1966. In 1974, Interstate Stores declared bankruptcy, and, in a reorganization plan implemented in 1978, Interstate Stores changed its name to Toys "R" Us (Kotik 1717). Since 1978, the reorganized company has flourished.
Toys "R" Us is the world's largest children's specialty retail chain (Kotik 1717). The firm operates both Toys "R" Us stores, which, as the name implies, specializes in the retailing of toys, and Kids "R" Us stores, which retail children's clothing (Kotik 1717). Technically, Toys "R" Us participates in the retail industry, and in the special lines segment of that industry (Markey 1665). The firm's activities, however, are also closely associated with the toy industry, the industry that manufactures the toys sold by Toys "R" Us (Sullivan 1550).
Hasbro and Mattel are the largest toy producers, with Hasbro by far the largest (Sullivan 1550). In 1991, Hasbro acquired Tonka, a competitor, which increased its size by approximately 40 percent (Sullivan 1550).
In terms of sheer size, there are no competitors for Toys "R" Us in the retailing of toys in the United States. All of the other retail toy store chains together do not have as many retail outlets as does Toys "R" Us. The other toy store chains, as a group, however, do provide the principal competition for Toys "R" Us toy stores. The principal retail chains other than Toys "R" Us are Child World and Lionel (Kotik 1717). Specialty toy stores emphasizing unique and premium priced toys, such as F.A.O. Schwartz, are not major competitors for Toys "R" Us, because such stores target a different segment of the market.
Toys "R" Us has approximately 41 thousand employees (Kotik 1717). Base salaries plus commissions provide a combination of security and incentive for sales employees. ...