...GROUP 7 GROUP 7 TOY INDUSTRY SUBJECT: SMSP TOY INDUSTRY SUBJECT: SMSP DHARAM JOSHI VISHAL NARULA POOJA SAMPAT VINEET HARDA CHIRAG SHAH KUNAL PAREKH DHARAM JOSHI VISHAL NARULA POOJA SAMPAT VINEET HARDA CHIRAG SHAH KUNAL PAREKH GROUP MEMBERS GROUP MEMBERS India’s market potential The Indian toy industry is estimated at about 1.4 billion US dollars and until now has generated only 0.5 per cent of the global market. However, growth of some 15 % promises a rapid rise in this statistic, especially in the context of the growing middle class and increasing demand for quality and luxury goods. In recent years, cities like Ahmedabad, Bangalore, Hyderabad and Pune have become the most important manufacturing sites of the Indian toy industry. Among the local manufacturers in India about 59 % are still focusing on the production of cheap and unbranded toys which appeals to the price-sensitive Indian consumers. In the future it is expected that these companies will shift towards branded toys as well to stay competitive with international companies. Internet retailing is becoming a more and more important distribution channel due to several reasons. Consumers have increasing access to the internet and online retailers often have better merchandise in terms of variety, new launches and the offer of branded toys. The share of internet retailing in sales grew from 1 % in 2007 up to 18 % in 2012. Focus on quality Indian consumers pay more and more attention to high-quality...
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...Beyersdorfer (2013) suggested in 2004, the market size of the toy industry is worth $61% billion in the wholesales revenue, with a steady growth of 4% per year in the retail market for toys. Thousands of toymakers flourish the market to serve global demand while keeping track of the 3 new trends in the industry which are toys demand rise while product life cycles decline, children has less time to play, and lastly increase demand of technology integration in physical toy or online worlds. Changes in conduct of competitors have change as witnessed by manufacturing in Asia, entering diverse retail channels and engaging in heavy marketing efforts. Therefore, we recommends LEGO Group to first, bring back LEGO DUPLO concepts and offer to unexplored market by establish strategic partnerships. Second, increase investment in R&D of new product designs and innovations. Third, adopt internal supply chain monitoring system and LEGO retailers’ system integrator. As external analysis has suggested increase of retail competition sector in the toy industry and this will have effect on LEGO Group because internal analysis shows that firms have high operational costs and as a result the firm is making no profit. By implementing these recommendations LEGO Group will achieve lower operational cost, establish sustained competitive advantages which will led to higher market shares and customer satisfaction. ANALYSIS The nature of the toy industry as analyzed by adopting the Porter (2008) Five Forces...
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...Elle Toys Company Memo To: From: CC: Date: Re: Mat T. Elle, CEO Melissa Weeden, Elementary Division Manager Haus B Row, CFO; Anne Fisher, COO; Eli Price, CIO 12/3/2011 Lead test on elementary whistle. It has come to our attention that during a routine test on the toy collection being prepared for shipment to South Africa, the whistle came back with slightly higher lead levels than the US legally accepted limits. As a major company under the publics’ watchful eye, we have to determine the best route to take and the ethical, legal and financial decisions that the company will encounter. We have three possibilities to consider: 1. Take no action and include the whistles in the toy collection being sent to South Africa, 2. Scrap the whistles made and continue on making new whistles that meet the US standards. 3. Completely scrap the whistles, do not make new ones or include any in the collection. There are many factors to each scenario to consider in the decisions reached. The Choices 1. If Elle Toys Co. decides to take not action and continue to include the whistles in with the toy collections; we need to be ready to back up our decision on a legal, ethical and financial basis. Ethically, the whistles are only slightly higher than the US legally accepted limits for lead in toys for children under the age of 7. We can look further in to South Africa’s legal standards and compare it to the lead levels in these whistles. We can take the ground we are legally following...
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...Industrial Promotion and Technology Branch TECHNOLOGY PAPER SERIES 6/05 Technology Transfer and Trade: The Toy Industry in India UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION I N D U S T R I A L P R O M OT I O N A N D T EC H N O LO GY B R A N C H Technology Transfer and Trade: The Toy Industry in India TECHNOLOGY PAPER SERIES TPS 6/05 December 2005 UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Vienna, 2005 UNIDO Industrial Promotion and Technology Branch Technology Paper Series TPS No. 6/2005 December 2005 Technology Transfer & Trade in Toy Industry of India Copyright © 2004 by United Nations Industrial Development Organization (UNIDO) The designati ons employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The responsibility for options expressed rests solely with the authors, and publication does not constitute an endorsement by UNIDO of the opinions expressed. This document has been produced without formal editing. The views expressed in this report do not necessarily reflect the views of the Secretariat of the United Nations Industrial Development Organization. Any indication of, or reference to, a country, institution...
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...preferences of end users and cause sudden shift in demand of Jots products. According to what mentioned in TIE “The success of the toy sector is dependent on satisfying customer needs. As children’s wishes for toys change rapidly, the industry needs to constantly introduce new products to meet these changing desires. The toy industry invests heavily in market analysis, R&D and the protection of intellectual property. The toy industry is one of the most dynamic business sectors in Europe: approximately 60% of toys on the market each year are newly developed products. In 2011, more than 90% of toy companies operating in Europe put new products on the market. This compares to less than 40% in other industry sectors”. The current trend in toy sales is towards electronic toys and computer assisted learning, electronic toys and merchandise from popular films and TV programmes have seen reasonable growth. As level of sales depend on how customers will perceive the products the company`s level of sales will be negatively affected if it unsuccessfully anticipated those preferences. As result Jot will end up with underproduction of highly demanded toys and the overproduction of toys that do not complement with consumer play preferences. However, fashion trends are difficult to predict and toy retailers can be left with large volumes of unsold inventories if the toys are unpopular or less in demand than originally anticipated. Short term profit depends on the licensing arrangement of merchandise...
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...Elizabeth Harris MGMT 430 Week 8 Assignment 2 Mattel designs, manufactures, and markets a broad variety of toy products worldwide through sales to its customers and directly to consumers. Mattel’s business is dependant in great part on its ability each year to redesign restyle, and extend existing core products and product lines, to design and develop innovative new products and product lines, and successfully market those products and product lines. Mattel plans to continue to focus on its portfolio of traditional brands that have historically had worldwide appeal, to create new brands utilizing its knowledge of children’s play patterns and to target customers and consumer preferences around the world. The objective of Mattel is to continue to create long-term stockholder values by generating strong cash flow and deploying it in a disciplined and opportunistic manner which is outlined in Mattel’s capital a investment framework. To achieve this objective, management has established these three overarching goals. The first goal is to grow core brands by continuing to develop popular toys that are innovative and responsive to current play patterns and other trends. Additionally, Mattel plans to pursue additional licensing arrangements and strategic partnerships to extend its portfolio of brands into areas outside of traditional toys. The second goal is to improve execution in areas including manufacturing, distribution, and selling. Mattel continues to focus on improving...
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...Crocodile Dentist Game,” a fun toy for kids ages 4 and up. The toy is in a shape of a crocodile with a big head, and a wide opened mouth with only one row of teeth on the bottom jaw, which doubles as buttons. The concept of this game is simple. There is one trigger button randomly hidden under one of crocodile’s teeth, which make the upper jaw closes down upon pressing. Players take turn press down on one tooth at a time until one player presses the trigger button to make the upper jaw shut down, and then he or she loses the game. Although this toy is made out of plastic, and will most likely not be around when kids who play with it grow up, it still teaches many essential lessons about risk, action and consequences which those kids can use later in their lives. Modern day toys are mostly made out of plastic to shift the focus to availability rather then longevity of the toy. Wooden toys are elegant and durable, which give it a long life span, but many of those wooden toys are specific to the region of its creator. Shaping wood into desire form to fit in with its other components to provide some articulation and life to the toy demands concentration, and many particular tools, or process can be grueling. Because of the challenging process of crafting one single toy, the number of toys available for sell can be scarce; therefore the toy will be more expensive. Plastic toys, however, can cheaply, and simply create from mold of the original crafted toy. The manufactured parts will...
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...Question 1: From the case, the characteristics of the toy industry: 1. Seasonal Demand Demand for toys is usually correlated with festive celebrations in a country. One close example is Christmas day which falls in December annually. Coincide with this celebration, significant portion of the toy’s annual sales usually happen towards the end of the year especially in those countries that are dominated by those that celebrate Christmas. The impacts of the seasonal pattern towards the industry are critical as most manufacturers have to consider several factors that lead to sales. The huge demand at certain period of time requires thoughtful planning and smooth execution as minor mistakes can lead to loss of millions of sales value. Just imagine within short period of time toy manufacturers have to produce millions of toys. This requires good management of supplies and synchronization between supplies and production as to minimize costs and ensuring efficiency. Not to forget issues of quality management and lastly the impacts or magnitude of logistic management to the toy manufacturers. 2. Stiff Competition Basically the toy industry consists of many players. As stated in the case, there are 880 companies operated in the industry in 2002. This is 10% lesser than 1997. There are few Key players in the industry such as Mattel, Hasbro, RC2, JAAKS Pacific, Marvel and Lego. In term of sales only two companies managed to register USD1 billion marks, the company are,...
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...Mattel Case Study analysis II Problem Statement As per the case study, Mattel’s main issue is that they are not living up to their core mission. The case clearly states that Mattel’s philosophy is to satisfy the customer’s needs and wants. Delivering what the customer needs and wants can be segregated into two broad categories: First, product development: According to the case, Mattel’s product development ensures that its portfolio never stagnates. Unfortunately, Mattel has failed to adapt to the evolving demands of children, as they are becoming increasingly technologically savvy and are therefore interested in electronic and interactive rather than traditional toys such as Barbie or Hot Wheels at a younger age. This is evident, for example, from the demise of the ‘ELLO’ building toys for young girls1.The product development disparity between customers’ needs and Mattel’s production is further demonstrated by their lack of attention to their global market, which, according to the text, account for 46% of gross sales. This is evident in the Malaysian Consumers Association having attempted to ban the Barbie brand, one of Mattel’s core products, because of her non-Asian appearance and the lack of intellectual stimulation that Barbie provides; and many other countries are following suit. According to the text, Asian sales account for a mere 11% of Mattel’s gross revenues. Second, Corporate and Social Responsibility: A strong product is no longer enough; customers increasingly...
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...one to play with the toy. C came over and wanted it too. C tried to take the toy from OB and they started to fight over it. Both of them were pulling the toy. OB pushed C, scramming, “mine, mine” | Part 2 – Decision(Clearly identify the guidance strategy and state why the chosen strategy is appropriate for this child / situation.)Based on the above case, the guidance strategy that I chose in this solution was giving choices. This strategy is developmentally appropriate. Children like to say words like “Mine” and “no” (Ages and Stages: A brief overview.) Making choices is a choice which the children need to be taught. According to books “For children, being able to practice making choices and decision as a child helps them develop an important life skill.” (Marion, 2011.pp132). This strategy would give C a chance to make his own choice and also help her to play with other children and develop their friendship. | Part 3 – Action(Clearly discuss your actions, the child’s response and the results of the guidance strategy.)I took the toy away and bent down to meet their eye level. I used positive words like “please be gentle to your friend.” Instead of “don’t do it!” I gave the toy back to OB. The observer said to C “OB had the toy first and you got to wait your turn until he is finished” I explained to C “I can give your another doll. OB has this toy first or you want wait for your turn.” After few minutes, C agreed and played with new toy. He took another toy from shelf. I said...
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...It is late June, and Sandra, head of operations at Mintendo, and Bill, head of sales of We ‘R’ Toys, are about to get together to discuss production and marketing plans for the next six months. Mintendo is the manufacturer of the popular Game Girl handheld electronic game that is sold exclusively through We ‘R’ Toys retail stores. The second half of the year is critical to Game Girl’s success because a majority of their sales occur during the holiday shopping period. Sandra is worried about the impact that the upcoming holiday surge in demand will have on her production line. Costs to subcontract assembly of the Game Girls are expected to increase and she has been trying to keep costs down given that her bonus depends on the level of production costs. Bill is worried about competing toy stores gaining share during the Christmas buying season. He has seen many companies lose their share by failing to keep prices in line with the performance of their products. He would like to maximize the Game Girl market share. Both Sandra and Bill’s teams produce a joint forecast of demand over the next six months, as shown in Table below: We ‘R’ Toys sells Game Girls for Rs. 50 a piece. At the end of June, the company has an inventory of 50,000 Game Girls. Capacity of the production facility is set purely by the number of workers assembling the Game Girls. At the end of June, the company has a work force of 300 employees each of whom work eight hours of non-overtime at...
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...been in the toys industry for more than 80 years and they one of the largest toys manufactures in the world. This gives Lego visibility and positioning in the industry. • Play system: They have an open play system that is not limited to the toy that the customer buys. Their system has endless possibilities and depends on the imagination of the children. • Brand awareness: Lego has built a reputable brand that leverages their marketing and commercial efforts. The brand LEGO, although is associated with the toys industry, can be recognized beyond that industry and can be associated to other leisure and entertainment products. • Loyal customers: Lego has been able to build a loyal base of customers that keep loyal to the brand when their aging. • Strong corporate culture and core values that have been invariable for decades. 2) What has led the Lego Group to the edge of bankruptcy? Several reasons and factors led the Lego group to the edge of bankruptcy. They majority of them were during the “The growth period that wasn’t” and others during the “Fixing period that wasn’t”: • Birth rates in their markets declined. Lego products were primarily targeted to children and the demographic explosion in the previous decades had fueled the pipeline of sales of the organization. • Kids spent more and more time in extra curricula activities and allocated less time to play with toys. Moreover, the economic environment in their markets turned out in less money spent in toys bought per...
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...Alisa Olson MGT405 Section 7 Sunduramurthy 29 November 2012 Case Write Up: LEGO Group LEGO Group has been a successful company in the toy industry since they started in 1949. As of 2010, LEGO remained a privately held company by the Kirk Kristiansen family. Annual sales reached an all-time high equaling over $3.7 billion. The company’s strongest lines were LEGO Star Wars, LEGO City, and LEGO DUPLO. Even though the company has maintained a competitive advantage, they face some seriously threatening issues. Some of the current issues they face are maintaining patents, company acquisitions, court battles, and new competition. In 1984, TYCO introduced Super Blocks, which were almost identical to the plastic brick design that LEGO has. TYCO had advertisements that stated “if you can’t tell the difference, why pay the difference”. LEGO launched a four year lawsuit against them, but by 1988 the patent for LEGO’s building block design expired, so they lost the lawsuit. All the effort against TYCO was wasted. LEGO should have renewed their patent to prevent incidents such as this one from happening. Once this patent expired, the barriers of competition were lowered significantly in the building toy market. In 2009, Disney acquired the comic book company Marvel Entertainment for $4 billion. This provided Disney with control over Marvel’s vast catalogue of over 5,000 comic book characters to be used in future publishing, movie production, and licensing operations. This was...
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...LEGO Paper: When we were looking for a company to present at the marketing pitch, LEGO was the first thing that came to our minds. Although being a toy company for mostly little children, people are fascinated with this company, especially with their brilliant marketing. The LEGO movie, which most of our group saw was the latest coup in LEGOS brilliant marketing strategy that perfectly connected both children and adults. In 2003 the company almost got bankrupt due to loosing sight of their core product. In 2004 the former Mc Kinsey consultant Jorgen Knudstorp took over as CEO and managed to turn around the company in a text book approach. From the time Knudstorp entered the company to 2010 LEGOS revenue had grown 165% in a stagnant toy market. By cutting costs, focusing on their core products and especially the developing new marketing strategies, the company managed to become the biggest toy maker in world in 2014, overtaking one of the biggest competitors Mattel. We constantly came up with new ideas, how to innovate LEGOS strategies, but soon found out that literally all of our suggestions have already been implemented. Our admiration for this company only grew along the way, although it was rather frustrating to get excited about a new idea, just to find out that LEGO has already done it. Everything from watches to furniture to clothing has been done before. Along the way of researching we stumbled upon LEGO education, a branch that was introduced in order to promote...
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...The LEGO Group Introduction Founded in 1932, the LEGO Group is a privately held company headquartered in Billund, Denmark. The vision of Lego Group is to “inspire children to explore and challenge their own creative potential”[1] Lego now ranks 4th in the world as a toy manufacturer. The Lego Group employs nearly 9,000 workers and its own product, Lego Brick can be found in over 130 countries. The financial performance of Lego declined drastically through the 1990’s and early 2000’s. In 2004, the company accumulated losses of DKK1.9 billion.[2] Therefore, Lego tried to implement some changes in order to cut the production cost and reverse the poor situation. In the last step of the process of restructuring Lego’s supply chain, the Group tried to close some of its’ own factories in Korea and Switzerland, upgrade the procurement process and outsource 80 percent of the production. Prior to outsourcing to Flextronics, production plants were located in high-cost countries including Denmark and Switzerland. Apart from the famous Brick, the company entered into other industries including computer games, clothing, licensed products and television. The product diversification was very large since they lost confidence in their core product. This catalyzed inefficiencies and confusion for customers. The result was a disastrous net loss and forced the company to find solutions to cut the cost and recapture the market share. In 2009, the Lego Group ended the outsourcing contract with Flextronics...
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