Niche segmentation - Britain’s Last Teddy Bear Maker

Here’s a cuddly story stuffed full with topical business studies teaching material. Of all the 30 or so teddy factories that once existed in Britain, only one still remains. Nestled in the Shropshire countryside, Merrythought Ltd has been making teddy bears since 1930. This short video takes us behind the scenes to watch the production process at Merrythought. It is almost like taking our students on a visit to a factory museum! Inside, a dozen or so ladies hand-stitch each teddy in much the same way as was done 100 years ago. The only real sign of the use of technology in the production process is a mechanised stuffing machine!

Oliver Holmes, the managing director of Merrythought, acknowledges in the video that his bears are far more expensive than others on the market. The average price of a soft toy in the UK is £7.81 and the smallest Merrythought bear retails at well over £50. Merrythought’s unit costs are over 50 times higher than their competitors in the Far East. So a key question for students is - how does Merrythough compete? And can they survive?

Here is the video. You can learn a little more about the Merrythought business in this BBC article and here on their website.