Worms Inc

Background

It is often hard to distinguish between the hard knocks in life and those of opportunity. ~Frederick Phillips

It is hard to imagine the stock market crash of 1929 as anything other than a “hard knock.” For the vast majority of American’s, that knock opened up the door to the Great Depression. However, for Edward Arthur Worms, that knock was a knock of opportunity. Surrounded by people who were out of work, struggling to feed their families, E. Arth recognized and welcomed an opportunity-He began a roadside stand selling worms to those struggling families. The Worms family worked together milling their own farm to get inventory, and taking turns operating the makeshift worm stand; resulting in pure profit. But that wasn’t all; E. Arth soon discovered that if you split a worm in half, you could double your inventory. Shortly after he started his brilliant business, other worm stands began to pop up. This threat of new entrants did not deter E.Arth; rather helped to develop a marketing strategy that worked incredibly well. As the stock market crash deepened into the Great Depression, E.Arth’s business flourished, resulting in the development of Worms Inc. Over the next three decades, Worms. Inc. franchised worm farming and sales businesses nationwide.

In the 1970s several threatening factors began to surface, forcing change on Worms Inc. Representative to their “old school” family oriented ideals, the company moved to the next generation, Doug Worms (E.Arth’s son). Doug was immediately faced with two serious competitors that had begun operations; Bait Barn and Land o’ Lures. Through the 1990s, demand went up and down, and the market analysis in 2005 showed that Worms, Inc. only had 19% of the market share. Bait Barn was next with 20%, followed by Land o’ Lures with 26% and “independents” had the largest market share with 35%.

The central issue in this case is as follows: Worms, Inc. is losing markets share to its competitors and therefore needs to find a way to gain a competitive edge. While Worms Inc. is an industry pioneer who has un-doubt ably been in business longer than any industry competitor; and they hold a shining reputation with the public-being known to sell the best quality worms- Worms, Inc. needs a serious upgrade. Worms Inc. needs to take advantage of economic opportunities and modernize their company. If the business cannot achieve this, they will continue to lose market share and be driven out of business.

SWOT Analysis

Location of Factors Favorable Unfavorable

Internal Strengths

• Well known Name

• Loyal Relationships and followers

• Return Policy Weaknesses