The Vermont Teddy Bear Co., Inc.: The Challenges Facing a New CEOINTRODUCTION The Vermont Teddy Bear Company was founded in 1981 by John Sorinto selling hand-sewn teddy bears from a pushcart on the streets of Burlington, Vermont. Since then, the company's goal has been to directly design, manufacture and market the finest American-made teddy bears using quality American materials and labor. Until 1994, Vermont Teddy Bear experienced much success and profitability. Problems Arose in 1995 Since 1995, the company has had two CEOs. It changed its name to The Great American Teddy Bear Company and then changed it again to The Vermont Teddy Bear Company when customers became confused. The Vermont Teddy Bear Company was known for its Bear-Gram delivery service. In 1996, the company decided to shift its focus from Bear-Grams to other distribution channels. In 1998, the company decided to renew its emphasis on Bear-Grams. Vermont Teddy has always taken pride in the fact that its teddy bears were made in America with American materials and craftsmanship. In 1998, the company changed this philosophy by exploring offshore sourcing of materials, equipment and manufacturing in an effort to reduce costs. In October 1997, Elisabeth Robert assumed the title of President and CEO and began cutting costs and positioning the company for future growth.