2. Table of Contents
Introduction ...............................................................................................................................5
Business Model Design & Value Proposition Statement...........................................................8
Key Partners...........................................................................................................................8
The Arbor Day Foundation.................................................................................................8
Oracle.................................................................................................................................8
Rackspace...........................................................................................................................9
Kaleidoscope......................................................................................................................9
Tesla ...................................................................................................................................9
Hot Wheels.........................................................................................................................9
Key Activities........................................................................................................................10
Oracle...............................................................................................................................10
Play Lab ............................................................................................................................10
Culture of Excellence .......................................................................................................10
Wagon Assembly..............................................................................................................10
The Manufacturing Process .............................................................................................10
Quality Control.................................................................................................................11
Key Resources ......................................................................................................................11
Raw Materials ..................................................................................................................11
Systems (Oracle) ..............................................................................................................11
People ..............................................................................................................................11
Value Proposition.................................................................................................................12
Customer Relationships.......................................................................................................12
Channels...............................................................................................................................13
Online...............................................................................................................................13
Online Retailers................................................................................................................13
International Distributors ................................................................................................14
Cost Structure ......................................................................................................................14
Variable Costs ..................................................................................................................14
Fixed Costs .......................................................................................................................14
Revenue Streams .................................................................................................................15
Sales .................................................................................................................................15
Partnerships.....................................................................................................................15
Licensing / TV & Radio Appearances ...............................................................................15
3. Position Audit / 9 M's Model ...................................................................................................16
1: Morale..............................................................................................................................16
2: Management....................................................................................................................16
3: Money..............................................................................................................................17
4: Makeup ............................................................................................................................17
5: Machinery ........................................................................................................................18
6: Materials ..........................................................................................................................18
7: Methods...........................................................................................................................18
8: Markets............................................................................................................................18
9: Management Information ...............................................................................................19
Key Strategic Decisions ............................................................................................................20
A Timeline of Radio Flyer’s Strategic Decisions:..................................................................20
Summary of Key Strategic Decisions....................................................................................26
The Good..........................................................................................................................26
The Bad ............................................................................................................................26
The Ugly ...........................................................................................................................26
Marketing Strategies................................................................................................................27
The Target Market ...............................................................................................................27
Price .....................................................................................................................................27
Pricing...............................................................................................................................27
Premium Pricing Strategy ................................................................................................27
Optional Pricing................................................................................................................28
Promotion ............................................................................................................................28
Coupons & Promotions....................................................................................................28
Facebook..........................................................................................................................28
Physical Evidence.................................................................................................................28
People ..................................................................................................................................29
Product.................................................................................................................................29
Design & Technology .......................................................................................................29
Quality Control.................................................................................................................30
Warranty..........................................................................................................................30
Process .................................................................................................................................30
Place.....................................................................................................................................30
Place in History ................................................................................................................30
Where to find Radio Flyer’s Marketing Strategies?.........................................................31
4. Possible Future Direction of the Company..............................................................................33
Conclusion................................................................................................................................35
Appendix ..................................................................................................................................36
5. Introduction
Radio Flyer is an American company founded in 1917. “Dedicated to delivering smiles and
warm memories that last a lifetime,” Radio Flyer are “proud to be a timeless symbol of
childhood freedom.”(1) (2)
The Pasin Family, circa 1905 (Antonio far right)
The story began with Antonio Pasin. Born into a family of cabinetmakers near Venice, Italy in
1898, Antonio learned their trade. But rather than work for someone else, he knew that
“since I was 10 years old, I wanted to be in business for myself.” He packed up his dreams -
and little else - and boarded a boat for America at age 16. Antonio headed for Chicago,
Illinois where he managed to acquire used tools and rent a one-room workshop. In that
workshop in 1917 Antonio built his first wooden toy wagon - the ‘Liberty Coaster.’ (3) (4)
“With more nerve than capital” (in Antonio’s own words) (5) he opened a larger factory - a
gamble which paid off when orders were placed for hundreds of wagons. In 1927, to meet
demand (and offer an affordable product), a stamped-steel mass-production process was
pioneered - resulting in the little red wagon to be called the ‘Radio Flyer’. (6) (7)
Thriving even during the Great Depression, Antonio took a flyer on another investment with
no guarantee of success - an expensive exhibit at the 1933 World’s Fair (‘A Century of
Progress’) taking place in Chicago. He risked everything to fund the building of a 45-foot
‘Coaster Boy’ statue. Underneath, a shop manufactured and sold miniature souvenir wagons
for 25 cents apiece. The exhibit was a great success, capturing imaginations and the
attention of visitors from around the world. (8) (9)
6. Radio Flyer souvenirs from the 1933 World’s Fair
Antonio shared his company’s success by helping his workers, initiating programs such as
English language tutoring within the factory. He provided interest-free loans for them to
build houses, contributing to the growth of the largely Italian neighborhood which
surrounded the factory on Chicago's West Side. (10)
From 1942-1945, Radio Flyer converted the factory during the Second World War.
Production turned to the ‘Blitz Can’ - five-gallon steel containers designed to transport fuel
and water to troops. (11) Post-war, it was back to business as usual.
The late 1950s and early 60s saw a foray into manufacturing something other than toys:
garden carts and wheelbarrows. Throughout these decades and into the 70s and 80s,
despite the regular introduction of new toy models, the mainstay remained the original little
red wagon. Radio Flyer bucked 80s trends of faddish toys, a predilection for plastic and a
7. general industry move away from classic, simple playthings. While remaining true to the
company’s roots, this allowed competitors to gain ground in the wagon market. (12)
In 1970, Antonio’s son Mario assumed the role of CEO. Then in 1997, Mario in turn passed
the baton to his sons (13) - Antonio’s grandsons - Paul and Robert. (14) Robert (whose first
job at Radio Flyer was on the packing line) (15) in addition to being President and CEO, is
also CWO: Chief Wagon Officer. (16)
In a February 2000 interview, Robert Pasin remarked upon Radio Flyer’s response to change.
He said: “We've continued to innovate, while staying close to the consumer.” (17)
Now, with its 100th Anniversary around the corner and a renewed commitment by the Pasin
family’s third generation to future growth and development, Radio Flyer continues to make
quality products as they always have... "For Every Boy. For Every Girl."
Radio Flyer vintage advertising
8. Business Model Design & Value Proposition Statement
Key Partners
The Arbor Day Foundation
Radio Flyer have a key partnership with non-profit organisation ‘The Arbor Day Foundation’
which inspires people to plant, nurture, and celebrate trees. (1)
This provides substance to Radio Flyer’s values and culture, while adding interest and
visibility to the brand. Through the ‘Build-A-Forest’ Program, Radio Flyer raises customer
involvement with their brand by making a donation to the Arbor Day Foundation for each
Radio Flyer product purchased. (2)
Oracle
Oracle supply business management software systems, software and hardware.
Radio Flyer determined that its legacy ERP (Enterprise Resource Planning) system wasn’t up
to the task of global expansion. It lacked flexibility and didn’t have the capacity to provide
competitive insights into its financial operations and global value chain.
Radio Flyer’s Senior Director of IT, Tom Cesario said, “We realized staying loyal to our old
ERP system could limit our business as we scaled up globally and introduced new offerings.”
9. To achieve their expanding ERP goals, Radio Flyer launched a new, modern platform from
Oracle which they believed would support their company for the long haul. Cesario explains:
“We felt assured we could be up and running quickly, through Oracle’s expert partners that
are certified in rapid implementations for midsize companies.”
Radio Flyer decided to go with:
Oracle’s JD Edwards ‘EnterpriseOne’ for their financials and customer information.
Oracle’s ‘Demantra Demand Management’ for their sales forecasting and planning.
Oracle’s partner Terillium in the Oracle Accelerate program, to assist Radio Flyer in
implementing Oracle on-time and on-budget. (3)
Rackspace
Radio Flyer moved its web infrastructure to Rackspace (www.rackspace.com) in 2009 for
web hosting, cloud management, to reduce downtime and provide online support.
Kaleidoscope
Radio Flyer partnered with branding company Kaleidoscope in 1998. In addition to branding,
Kaleidoscope helped the company to develop and promote new product lines; tricycles,
scooters, children’s bicycles, foot powered roadsters and pedal powered race cars.
Tesla
Tesla and Radio Flyer introduced the Tesla ‘Model S For Kids’ for children 3-8 years of age.
The toy car ‘recreates the ultimate Tesla experience’ complete with working headlights, a
fully-functional sound system, and a ‘frunk’ (front trunk) space for storing the
essentials...like snacks and more toys. The Model S For Kids ranges from $500-$800. (4) (5)
In Radio Flyer’s own words on their website: "Every Tesla Model S for Kids is a battery
powered ride on that comes equipped with high-end features. You choose the paint color,
performance, accessories and personalization." (6) A promotional campaign for the mini
Tesla embraces the concept of ‘Electric At Any Age’, highlighting the environmentally-
friendly batteries which are charged just like a full-sized EV (Electric Vehicle) would be.
This partnership with a modern, relevant, high-profile technology company (with sterling
green credentials) generates great mutual publicity and also furthers the joint aim to “usher
in the next generation of electric vehicle owners.” (7)
Hot Wheels
Radio Flyer have had mini 1/64 scale ‘drag racing’ versions of their wagon produced by
classic American toy manufacturer ‘Hot Wheels’ from 1996 to the present day. This taps into
the hot trend for collectibles - the first editions are quite popular among collectors on eBay
and other sites. (8) (9)
10. Key Activities
Oracle
To standardize their operations from Chicago to China, Radio Flyer needed a technology
transformation. By trading in spreadsheets for integrated capacity planning, production
scheduling, material resource planning and advanced forecasting with Oracle, Radio Flyer
has vastly improved their reporting accuracy and reduced inventory levels while delivering
the highest standard of customer service. (10)
Play Lab
In 2011, at the company's headquarters in Chicago Radio Flyer installed the Play Lab - a test
track for their wagons. They would watch and record how the end user would play with
their products. They would also test to see how their products would suit parents - how do
they fit into car boots, are they clumsy or awkward to lift and move? By spending time
observing the ergonomics of their products and children’s play patterns, Radio Flyer are
better able to identify issues users may experience with the product. Once these are
identified, Radio Flyer can then assess their product and adapt to cater to user needs. (11)
Culture of Excellence
Until 2004, Radio Flyer had no HR department. By studying the best places to work, Radio
Flyer developed what they call ‘a culture of excellence’. For their onboarding process, they
train new employees to assimilate Radio Flyer’s culture. New employees are encouraged to
reach out to seasoned employees and create internal relationships. Radio Flyer also have
internal classes - ‘Wagon U’ - in which an employee can choose to grow their skill set. (12)
Wagon Assembly
High Volume:
Little Red Wagon
Inchworm (a wheeled ride-on propelled by the bouncing motion of the rider)
Radio Flyer Tricycle
Radio Flyer Ziggle (a ride-on which moves by twisting the front
and wiggling the back)
Low Volume/Customisable:
Radio Flyer toys have been customised for films and a few special editions were created for
popular cultural events. The company also offer customisable products on their website.
This includes a range of offerings that can be designed by the customer - Build-A-Wagon,
Build-A-Trike, Build-A-Balance Bike, Build-A-Scooter, Build-A-Gift Wagon. (13)
The Manufacturing Process
The parts of a toy wagon are made using a variety of methods such as metalworking, plastic
molding, and die-casting. The pieces can then be assembled by the manufacturer or
packaged and sold for home assembly. The exact manufacturing method depends on the
material of the final wagon. (14)
11. Quality Control
Radio Flyer toys are subjected to governmental regulations related to toy safety. According
to their website, “All of our products meet the industry standards and regulatory standards.
Our products are also tested against our own internal Radio Flyer standard that goes above
and beyond those set forth by the industry to ensure that we create safe products.” (15)
Quality control starts with inspecting the raw materials and any finished parts that are used
to produce the wagon. This includes such things as the steel, plastic resin, and paints. During
various phases of production, visual inspections of parts, welds, and painting are performed
by trained quality control technicians. If a fault is discovered, the part is removed from the
production line and the steel or plastic is recycled. (16)
Key Resources
Raw Materials
A variety of raw materials are used by Radio Flyer. The main body and other parts of the
wagon can be constructed from steel or plastic. The steel that is now used is a soft, draw
quality material which is lightweight and sturdy. Plastic wagons made of high-density
polyethylene (HDPE) are a relatively recent development and are a result of improvements
in polymer technology. Durable, non-toxic acrylic-based paints are used to decorate the
main body and other wagon parts. To change the properties of the plastic and make it easier
to work with, fillers are often added. Additionally, colorants are added to the plastic for
decorative purposes. Finally, rubber is used for making the tires. (17)
Systems (Oracle)
By adopting advanced ERP systems that are tailored to specific business functions, Radio
Flyer can support business operations while developing enterprise systems that enhance
opportunities for future growth. (18)
People
Employees at Radio Flyer are encouraged to set goals that align with the company's mission.
To achieve Radio Flyer’s current ‘culture of excellence’ they had to change their entire
mindset. As CEO Robert Pasin explains, “I had a couple of guys say, ‘OK, now that we’re
going to have these goals, how much more am I going to get paid?’ I said nothing. These
goals are not above and beyond. They are not extra. This is the most important stuff you’re
supposed to be doing in your job. Those people aren’t in the company anymore.” (19)
This all comes down to Radio Flyer’s vision, mission and values. (20) According to Amy
Bastuga, VP of Human Resources, “One key thing that was pivotal in this evolution to the full
integration of the values was our focus on building a whole company of recruiters. Everyone
at Radio Flyer is fully trained on our selection process. We started with the leaders, then the
managers and we’ve trained all Flyers on how to interview and screen candidates. We
wanted them to be aware of how to screen and interview people. We’ve done a good job of
articulating what we expect of people and stick to a belief that having an open position is
better than having a bad match.” (21)
12. Value Proposition
“Radio Flyer provides quality, safe, simple products that inspire outdoor play.” The company
uses their humble family business heritage spanning three generations to evoke trust and a
sense of nostalgia from their customers. From day one, Radio Flyer has focused on “creating
warm feelings in consumers and employees.” When consumers use Radio Flyer products,
they develop a positive emotional attachment with the brand, as Radio Flyer are all about
children having fun and making memories. (22)
Radio Flyer’s vision is ‘to be the world’s most loved children’s brand’. Their mission is ‘to
bring smiles to kids of all ages and to create warm memories that last a lifetime’
This will be achieved by:
Relentless commitment to build a great team.
Awesome kids’ products that inspire active play.
Deliver breakthrough results.
Improve our world by acting sustainably.
Outstanding LRR (Little Red Rule) customer service.
Values lead them to follow the ‘Little Red Rule:’ “Every time we touch people’s lives, they
will feel great about Radio Flyer because of our passionate commitment to the FLYER code”:
FUN omenal Customer Experiences
Live with Integrity
Yes I Can
Excellence in Everything
Responsible for Success (23)
Customer Relationships
In the past, Radio Flyer weren’t talking to their consumers as much as they should.
Fundamental missteps were made - for one thing, the growth of customer demand for
plastic wagons caught the company off guard, allowing competitors to gain an advantage.
Now, however, they are engaging with their customers to find out what they want/need in a
Radio Flyer product, as demonstrated by the creation of the Play Lab.
“Radio Flyer is dedicated to giving their consumers what they want” says Robert Pasin.
“When consumers wanted big air tires on their wagons, we gave it to them. When they
wanted plastic wagons with cup holders, we produced that. We've continued to innovate,
while staying close to the consumer.” (24)
From an IT perspective, Tom Cesario says: “By integrating our customer-facing website with
our financial and value chain operations, we could speed order processing and minimize
manual errors for personalized, one-of-a-kind orders. Our Build-A-Wagon and Build-A-Trike
features on radioflyer.com provide our customers a high touch and high tech way to interact
with our brand.” (25)
13. On their website, Radio Flyer provide a range of services for consumers, which include:
Warranty Replacement Parts
Helpful Hints for Product Assembly
FAQ’s
Customer Satisfaction Survey
Troubleshooting Guide for their electric products
A place for consumers to share stories
Birthday Club
Option to create a personalized license for their Little Flyer
Customisable Options, e.g. Build-A-Wagon and Build-A-Trike
Order Tracking
A Loyalty Program where customers earn points by:
· Purchasing products on RadioFlyer.com
· Registering your Radio Flyer product
· Writing a review on RadioFlyer.com
· Celebrating a child’s birthday
· Referring a friend
· Liking Radio Flyer on Facebook
Every time a customer reaches 250 program points, they can redeem them for $10
off their order on radioflyer.com. (26) (27)
Channels
Online
Radio Flyer have customisable options (Build-A-Wagon, Build-A-Trike etc.) on
radioflyer.com. This allows the customer to have full control over the individual components
of the wagon of their choosing while simultaneously giving them control over the price of
their product. (28) Customers may also send Radio Flyer their ideas for extra features
and/or designs for new wagons. (29)
Online Retailers
Toys R Us, Target, Walmart, Amazon, Kmart, Sears, Hayneedle, Meijer, Kohl's, Buy Buy Baby,
True Value. Ace Hardware, Farm & Fleet, Mill's Farm & Fleet, Fred Meyer, Wayfair, Orscheln
Farm & Home, Diapers.com, Yoyo.com, redwagons.com, Growing Tree Toys, Monkey Tree
Toys, Do It Best Corp, Toys R US Canada, Mastermind Toys.
INTERNATIONAL: www.toyguru.com.au (Australia), radioflyer.pl (Poland), good sped s. r. O.
(Czech Republic), Uzone Trading Company (South Korea), PhoeniX GmbH (Germany, Austria,
Switzerland, Benelux, Italy, France).
14. International Distributors
Room 2 Play (Denmark, Norway, Sweden), Child’s Play Ltd. (New Zealand), Maritime Trading
Co (Japan), Radioflyer.pl (Poland, Croatia, Lithuania), RODATOYS Distribuciones (Spain,
Andorra, Portugal), SNB Kidden World Co. Ltd. (Vietnam), PhoeniX GmbH (Germany, Austria,
Switzerland, Benelux, Italy, France), Asobi (United Kingdom and Republic of Ireland), Go
Youth Co. Ltd. (Taiwan), Nitid Co. Ltd. (Thailand), Uzone Trading Company Ltd. (South
Korea), Shanghai Uzone Int'l Trading Co., Ltd. (China). (30)
Cost Structure
Variable Costs
Utilities: Electricity, Heating/Cooling, Water, Telecoms
Materials: Steel, Paint, Rubber, Plastic, Cardboard & Packaging
Machinery Repairs and Supplies (e.g. Machine Oil)
Building Repairs
Staff: Billable Wages/Commissions
Credit Card Company Fees (Based on Sales)
Goods Transport (Freight Out)
Fixed Costs
IT Support/Web Hosting/Cloud Management (Rackspace)
Website Maintenance
ERP System Running Costs (Oracle)
Advertising and PR
Mortgage/Lease Costs
Property Taxes
Scheduled Building Maintenance
Production Machinery
Planned Machinery Maintenance
Office Equipment
Office Supplies
Staff: Fixed Salaries/Benefits Package
Credit Card Company Fees (Monthly/Annual)
Legal/Accounting
Taxes/Interest Expenses
Amortisation/Depreciation
Landscaping
Cleaning
Rubbish Removal/Recycling
Security
Insurance
15. Revenue Streams
Sales
Radio Flyer products are available at many retail outlets nationwide in the USA. They may
also be ordered online from RadioFlyer.com and from authorized Radio Flyer affiliates (both
in America and internationally) listed in the ‘Online Retailers’ section (see ‘Channels’).
In addition, Radio Flyer has established a network of International Distributors (also listed in
‘Channels’). (31)
Partnerships
Radio Flyer have established partnerships with some other All-American companies and
brands. They have partnered with ‘Hot Wheels’ toys since 1996 and ‘Tesla’ motor company
more recently.
Licensing / TV & Radio Appearances
Radio Flyer have a long history of leasing their products (and image rights) to various
companies. The most notable of which would be the appearance of their famous wagon in
the hugely popular American Christmas movie ‘A Christmas Story’ in 1983 and in the 1992
film, ‘Radio Flyer’.
16. Position Audit / 9 M's Model
1: Morale
(human assets of the firm such as skills, etc.)
Radio Flyer was ranked first on the 2015 Fortune ‘50 Best Small and Medium Companies To
Work For.’ “Workers at the toy maker say they’re like a family, who help build playgrounds
and share ideas at an annual company retreat. “I truly come in each day excited to see what
is in store and how we are going to improve ourselves,” says one employee.” There are
many job perks and supports, with a reported 62% female staff. (1)
This is only one of many recent ‘Best Workplace’ awards. (2) Radio Flyer was also in the Top
Ten on Crain’s Chicago Business ‘Best Places to Work 2015’ list. “The company is committed
to providing family-oriented perks: flex time year-round, summer and holiday parties for
employees and their families, kids visiting the West Side headquarters regularly to test
products and a ‘Take Your Kids to Work Day’ program. Other incentives include a wellness
reimbursement program, bike mileage reimbursement, an exercise room, a vegetable
garden and a walking path on the premises.” In the words of Tom Schlegel, Senior VP of
Product Development, “Providing meaningful work is one of the most important ways you
can keep people engaged. At the end of the day, when you’re designing a product that
makes people happy, it tends to make things easier.” (3)
The emphasis on making the workplace a nurturing ‘family’ atmosphere can be traced back
to Radio Flyer’s founder. Antonio Pasin looked after his employees, providing supports to
help them improve themselves and their lives. The modern job perks are a natural extension
of the English language lessons he provided and interest-free loans he arranged for his
workers to build houses. This established a culture which became embedded in the
company and the community, making Radio Flyer a place people wanted to work. (4)
2: Management
The company is family run, with three generations of the Pasin family having worked in
management (currently Robert, grandson of founder Antonio, is at the helm). (5)
Antonio Pasin established the company in 1917. Mario Pasin, Antonio’s son, took over
leadership of Radio Flyer in 1970 - but unfortunately he allowed the company to stagnate
during his watch, bringing it to the brink of failure. When Mario’s son Robert took charge in
1997, he had a lot of work to do in revitalising a flagging business. Robert rose to the
challenge, making big decisions to move away from a total reliance on in-house
manufacturing and into more vigorous product development, refreshing the product line
accordingly. (6) (7)
Robert Pasin made another long overdue decision regarding a lack of direction where HR
was concerned. He introduced a rigorous hiring process (8), instituted a culture that would
attract the best people and began a process to achieve the changes he wanted to make. (9)
17. “We went through a process that included everyone in the company,” Pasin says. “The best
way to achieve change is to involve everyone in the change as much as possible. In our case,
we were changing the culture, and we asked everyone a lot of questions over the course of
a year.” (10)
With the culture defined, it was time to set clear goals. “Everybody in the company has five
goals,” Pasin says. “Those five goals line up with the team goals and the team goals line up
with the company goals. So there’s tremendous line of sight and alignment throughout the
company for what we’re working on. ‘Here’s what I’m working on and here’s how it’s
impacting the success of the business.’” (11)
To get everyone on board, Radio Flyer had to accept that some employees were no longer a
good fit for the company - the transformation included early retirements and layoffs to
facilitate change. (12)
3: Money
2015:
3-Year Growth of 44% | 2014 Revenue: $110Million (USD)
(figures according to http://www.inc.com/profile/radio-flyer)
4: Makeup
(structure and culture of the business)
The business is centred around manufacturing and production so a large part is product
assembly activity (principal manufacturing operations are now no longer taking place in-
house). After the shift away from in-house manufacturing, there is now also a renewed
emphasis on product design and development.
The company is selling in a very competitive toy market, so products need to be uniquely
marketed and sold. Radio Flyer’s culture is a big part of this.
Radio Flyer has received many culture awards and is considered a very desirable workplace,
winning a succession of ‘Best Places To Work’ accolades. Radio Flyer also has a positive
company image and engaging story. (13)
Vision: ‘to be the world’s most loved children’s brand’
Mission: ‘to bring smiles to kids of all ages and to create warm memories that last a lifetime’
through…
Relentless commitment to build a great team.
Awesome kids’ products that inspire active play.
Deliver breakthrough results.
Improve our world by acting sustainably.
Outstanding LRR (Little Red Rule) customer service.
18. Ultimately, everything a ‘Flyer’ (employee) at Radio Flyer does is governed by the ‘Little Red
Rule:’ “Every time we touch people’s lives, they will feel great about Radio Flyer because of
our passionate commitment to the FLYER code”:
FUN omenal Customer Experiences
Live with Integrity
Yes I Can
Excellence in Everything
Responsible for Success (14)
5: Machinery
(physical assets, their flexibility, cost and quality they produce)
Over the years the products have been made in wood, metal and plastic, with each requiring
many different manufacturing techniques.
A shift to using plastic has moved manufacturing out of the original HQ in Chicago, with
products being made elsewhere in the US and also increasingly in China.
6: Materials
(relationships with suppliers)
A large part of Radio Flyer’s success is its ability to customise its products with accessories.
Custom design with suppliers is a regular practice.
A variety of raw materials are used by Radio Flyer including steel, plastic, paint and rubber.
7: Methods
(processes adopted by the business, e.g. outsourcing work)
The company has increasingly licensed its brand for use.
Radio Flyer shut down their in-house factory and decided to focus on design and
development. Along with these decisions came a change to the company mission and
employee culture. There was a staff overhaul to implement the right mentality. The
company created a culture of excellence and encouraged employee development with the
‘Wagon U’ program. In 2004 they also moved production to China (approximately 80% of
the world's toys are produced in China), while the HQ and distribution remained in Chicago.
Almost half of their 90 employees were laid off.
8: Markets
(products and markets served, examine the quality and position of
the firm's output and the extent it is exposed to threats)
It is estimated that the company held 70% of the toy wagon market in the year 2000. (15)
There are many competitors in the tricycle market. The company does sell limited edition
and iconic editions of toys. It does incorporate other brands also into its toy lines, such as
Tesla and Hot Wheels.
19. As quoted previously in this report, Robert Pasin remarked in a February 15, 2000 interview
in the Chicago Tribune on Radio Flyer’s response to changing tastes. He said: 'When
consumers wanted big air tires on their wagons, we gave it to them. When they wanted
plastic wagons with cup holders, we produced that. We've continued to innovate, while
staying close to the consumer.'
9: Management Information
(timeliness and quality of information and its suitability for decisions)
Radio Flyer launched a new, modern ERP platform from Oracle which to enable and manage
growth and support their company long term.
To standardize their operations from Chicago to China, Radio Flyer needed a technology
transformation. By trading in spreadsheets for integrated capacity planning, production
scheduling, material resource planning and advanced forecasting with Oracle, Radio Flyer
has vastly improved their reporting accuracy and reduced inventory levels while delivering
the highest levels of customer service.
20. Key Strategic Decisions
A Timeline of Radio Flyer’s Strategic Decisions:
1917
Antonio Pasin changed from
manufacturing phonograph cabinets to
wooden toy wagons after numerous
requests (he used to carry his tools in a
wooden wagon he had made himself).
1923
Antonio changed name of company to
‘Liberty Coaster Company’. A few years
later they started implementing mass
manufacturing techniques from the auto
industry to create stamped steel wagons
instead of wooden ones. Antonio earned
the nickname ‘Little Ford.’ “Like any
entrepreneur, he went with what sold
well.” said his grandson Robert (now CEO of
Radio Flyer).
1930
Changed name of company to ‘Radio Steel &
Manufacturing’, he also changed the name of the
wagon to ‘Radio Flyer’ after his heroes Marconi (Radio)
and Lindbergh (aviation).
21. 1933
‘World’s Fair’ takes place in Chicago. Antonio
took on a massive debt ($30,000 in
1933/approx $549,230 in today’s economy) to
fund construction of 45ft tall ‘Coaster Boy’
statue and kiosk. He and his wife assembled
and sold 100,000 miniature wagons from the
kiosk at 25 cents each (approx. $4.56 in
today’s economy). From those trinket sales
alone they made $25,000 ($456,000 in today’s
economy) plus the exposure they would have
received from this brilliant branding idea.
1942-45
During WWII Antonio diversified and changed
production to supply five-gallon gas cans for the US
Army.
1944
The G.I. Bill came into effect which subsidized
mortgages for soldiers. This resulted in many
families moving to the suburbs and the post war
‘Baby Boom’. Sales remained high during this
period.
1947
Even in post-war America, families continued
to buy and use the ever-popular Radio Flyer
Wagons. This picture is from 1947.
22. 1950s
There was an overall fear of Communism throughout this
decade. Radio Steel & Manufacturing advertised their little
red wagon as the embodiment of America and the true
American toy. Their 1953 advert in the Logansport Pharos-
Tribune read; “Sooner or later you’ll have to buy the kids a big
red coaster wagon (this probably is a factor in their growing
up to be 100% pure red-blooded American).
1955
Radio Steel & Manufacturing started selling specialty
wagons based on popular TV shows and movies of
the time, such as the “Radio Rancher” pictured.
1957
Radio Steel & Manufacturing started manufacturing wheelbarrows and garden carts to meet
changing demands of the new suburban based families.
1970
Mario takes over as CEO.
1973
Another clever advertising
campaign famously claimed that
Radio Flyer was “the only wagon
that outsells Ford station wagons.”
23. 1983
Radio Flyer wagons appear in a store display in the hugely popular
Christmas movie “A Christmas Story”. Excellent repeat advertising for
the company every Christmas.
1987
‘Radio Steel & Manufacturing’ changes its name to ‘Radio Flyer’.
1990
Antonio Pasin dies.
1990s
Competition from other companies (Little Tikes and Step2)
producing cheaper plastic Wagons compared to Radio Flyers
stamped steel wagons.
1992
A character flies to safety in a converted wagon in the film
“Radio Flyer”. Again, great advertising for the company.
1994
Radio Flyer start producing plastic wagons in Wisconsin.
1996
Radio Flyer have had mini 1/64 scale ‘drag racing’
versions of their wagon produced by classic
American toy manufacturer ‘Hot Wheels’ from 1996 to the present day.
24. 1997
Robert (Antonio’s grandson) took over as CEO from
Mario. At this stage business was at a standstill.
There was no hiring process or HR function in place.
He realized the company needed to do more market
research to understand how its core customers (kids)
used the product.
1997
On the 80th Anniversary of the company’s inception
Radio Flyer created “The World’s Largest Wagon” that
actually works. It is 27ft long and 13ft wide. It visited
cities across the United States to market the long-
lasting brand.
1998
Partnered with Branding company Kaleidoscope.
Also started to develop new product lines;
tricycles, scooters, children’s bicycles, foot
powered roadsters and pedal powered race cars.
1999
Radio Flyer Wagon is inducted into the ‘National Toy Hall of Fame’.
2004
Shut down in-house factory and decided to focus on design & development. Changed
company mission and employee culture. There was a staff overhaul to implement the right
mentality. They created a culture of excellence and encouraged communication with the
‘Wagon U’ program. In 2004 they also moved production to China (approximately 80% of
the world's toys are produced in China). Headquarters and distribution remained in Chicago.
Almost half of their 90 employees were laid off.
25. 2009
Radio Flyer moved its web infrastructure to
Rackspace (www.rackspace.com) for web
hosting, cloud management, to reduce
downtime and provide online support.
2010
Started offering an online experience that lets customers customise and build their own
wagon.
2011
Huge emphasis is placed on market research
and communicating with their customers. A
“Play Lab” with a test track sidewalk was
installed at the company headquarters in
Chicago.
2012
Radio Flyer aired its first TV advertisement in 20 years to promote their two-wheel scooter.
2013
Radio flyer partnered with business
management software suppliers Oracle.
2016
Created a line of ‘Mini Teslas’ in conjunction with
Elon Musk’s Tesla company. These are the kind of
moves which help the company stay relevant in
people's minds.
The company now has 100 award-winning
products available in 25 countries worldwide.
26. Summary of Key Strategic Decisions
The Good
Antonio Pasin’s early strategic decision to change from manufacturing phonograph cabinets
to the wagons he used to carry his tools around in was nothing short of inspired.
He quickly adapted Henry Ford’s manufacturing techniques to create a large manufacturing
facility to keep up with demand for the stamped steel wagons.
The 1933 World’s Fair in Chicago was a perfect example of “being in the right place at the
right time”. However, Antonio also gambled a huge amount of money building a huge
wagon sculpture to attract attention. It paid off and the decision to sell miniature wagons
was a master stroke that almost paid for the sculpture.
Decisions to diversify and manufacture cans (during the WWII) and garden carts (during the
Baby Boom 1950’s) cemented the company's ‘All American’ brand.
Various TV and Radio appearances over the years, most notably in the 1983 movie ‘A
Christmas Story’ have been excellent ways of remaining in the public consciousness.
Radio Flyer eventually start manufacturing plastic wagons in 1994.
In 1997 to celebrate Radio Flyers 80th Anniversary build a huge working wagon and tour it
around the country as a marketing strategy.
Partners with Branding company Kaleidoscope (1998) to reinforce their brand.
Their famous wagon is inducted into the Toy Hall of fame in 1999.
The decision to shut down their in-house factory to focus on R&D and move production to
China was crucial to remain competitive.
Partners with Web Development and Hosting company Rackspace (2009) to improve their
online presence and provide and online experience for customers.
‘Play Lab’ was introduced in 2011 for market research and to engage customers.
Radio Flyers first TV advert in 20 Years airs in 2012.
Introduced a business management software system via Oracle.
Partners with the Tesla company in 2016 to produce ‘Mini Teslas’.
The Bad
Numerous name changes over the years would not be an ideal strategic decision. It wasn’t
until 1987 that the company decided to stick with the name ‘Radio Flyer’.
Lack of consistent TV and Radio advertising and marketing affected sales, preferring to rely
on word-of-mouth and nostalgia.
The Ugly
Refusal to expand their product range and a decision to stick to the same manufacturing
techniques in place since the early 1920’s wasn’t very wise. Competitors began to capture
some of the market and cheaper manufacturing techniques and materials from China really
impacted Radio Flyer’s sales until the 1990’s when Robert Pasin took over as CEO.
27. Marketing Strategies
The Target Market
Radio Flyer produces items that speak to customers who are beginning new families. As per
MRI information, Radio Flyer's objective business sector is represented by a mother
between the ages of 18-49. They have access to an annual income of $75,000 (all figures in
this section in USD) every year. This demographic has finished school and has a full time job.
Price
Radio Flyer’s pricing structure for their products is quite competitive when looked at side-
by-side with their competitors, thanks largely to the fact that they have moved production
away from the steel-stamped process which was in place in Chicago for most of the
company’s existence.
They have suppliers in China which allow them to drastically reduce their cost price.
Pricing
Their products range from $45 for their ‘Build-a-Gift Wagon’ to $190 for their top of the
range ‘Ultimate EZ Fold Wagon’, ‘Ultimate Comfort Wagon’ and ‘Triple Play Deluxe Wagon’.
Premium Pricing Strategy
Radio Flyers products are slightly more expensive as compared to one of their main
competitors ‘Little Tikes’. Little Tikes ‘wagon’ range is from $30 - $130 (USD). However,
Radio Flyer is a well-established American brand and can realistically price themselves a
little higher due to this and their ‘All American’ Nostalgia factor.
28. Optional Pricing
Radio Flyer have customisable options (Build-A-Wagon, Build-A-Trike etc.) on
radioflyer.com. This allows the customer to have full control over the individual components
of the wagon of their choosing while simultaneously giving them control over the price of
their product.
Promotion
Coupons & Promotions
Radio Flyer often offer sales, promotions and coupons to their customers. Visitors to the
website have the option of signing up for the company’s newsletter which will notify
subscribers of upcoming promotions.
Facebook
On Facebook, during the recent holiday season, Radio Flyer used the social media site to
engage with its customers. A Little Red Workshop feature let consumers upload photos of
themselves or their children to create holiday cards they could send to friends and relatives.
Consumers could also create a wish list on the site.
An ongoing offering allows parents to create a personalized Radio Flyer license for their
child, by uploading his/her photo to the site and choosing the Radio Flyer vehicle he or she
will be driving. Radio Flyer then produces a photo ID that includes photos of the child and
their ride.
Physical Evidence
As the company got into the details of making plastic wagons, CEO Robert Pasin gradually
began to realise that a big change was going to have to be made: Radio Flyer was no longer
going to be a manufacturer.
It happened over a period of years, but it was clear if the company was going to make plastic
wagons and branch out into tricycles and scooters too, something had to go.
Pasin wanted to build relationships with design firms and have product development teams
that would have their fingers on the pulse of consumers. In order to do that the right way,
manufacturing would have to be cut.
Twenty years after the company faced its demise, Radio Flyer is flying high. Sales that were
only $20 million in 1992 now top $100 million and the 70-employee company’s debt is
minimal.
29. People
When Mario Pasin passed the business down to Robert in 1997 development was at a halt
and the organisation was barely surviving.
Robert's greatest test has been reevaluating the organisation, growing innovation in design
and development and moving manufacturing abroad. "But on the other hand it's been the
greatest achievement," he said.
Radio Flyer produces items that speak to customers who are beginning new families. Radio
Flyer's buyers are generally youthful, married women who want a quality toy that sparks
creative energy and encourages dynamic play. These potential customers are devotees and
can be brand evangelists. When choosing products, this customer commonly picks well
known items and built up brands, and is faithful to the brands she trusts. This customer will
consider spending a bit more for a quality product made by a brand she trusts.
Radio Flyer items are acquired by grandparents for their grandkids or by past proud owners
of their very own ‘Little Red Wagon’.
Radio Flyer has a uniquely rich heritage and history. Robert Pasin decided that the
company’s employees needed more knowledge of this history - he hired Dorie Blesoff, an
independent consultant at the time who is now the chief people officer at Chicago-based
software firm kCura.
Amy Bastuga joined Radio Flyer in 2007 as Vice President of Human Resources. She brought
her HR expertise to a growing organisation whose vision was to create an innovative
environment where every employee could say “I love my job.” She has helped lead Radio
Flyer to achieve repeated recognition as a best place to work. She led the development of
strategic engagement programs and top notch talent acquisition practices. She is a strategic
member of their leadership team who has built a talented group of Flyers focused on
achieving Radio Flyer’s vision of becoming the world’s most loved children’s brand.
The combination of Blesoff’s culture work with Bastuga’s vision for Radio Flyer’s onboarding
experience culminated in 2007 with the beginning of the formal revamp of the company’s
orientation and assimilation process. They decided learning would be central to the
experience, and began integrating training into the onboarding program with new hires in
2007 and 2008. Training grew so important that in 2009, Radio Flyer developed ‘Wagon U’,
its corporate university.
Product
Design & Technology
The parts of a toy wagon are made using a variety of methods such as metalworking, plastic
molding, and die-casting. The pieces can then be assembled by the manufacturer or
packaged and sold for home assembly. The exact manufacturing method depends on the
material of the final wagon.
30. Quality Control
Radio Flyer toys are subjected to governmental regulations related to toy safety. Their
products are also tested against their own internal Radio Flyer standard.
Quality control involves inspecting the raw materials and any finished parts that are used to
produce the wagon. This includes such things as the steel, plastic resin, and paints.
Warranty
Radio Flyer warrants that its products will be free from defects in material and workmanship
occurring under normal use for a period limited to one year from the date of the original
purchase (if the product is not registered with Radio Flyer) and two years from the date of
original purchase if the product is registered with Radio Flyer.
Process
“We’ve been seeing how online has been continuing to grow and where consumers are
looking to understand more about products,” says Radio Flyer marketing manager Melissa
Enos. “Consumers are researching online and engaging with friends online. We saw it as an
opportunity to create a destination where consumers can learn more about Radio Flyer
products.”
To that end, the site includes product videos, and lets visitors ask questions about products
that customer service agents reply to online. The company follows those questions and
updates product content if it sees from customers’ questions that something is not clear,
Enos says. Nostalgia is vital to the appeal of the wagons. Consumers give their children what
they affectionately recall from their youth.
Place
Place in History
Radio Flyer Wagons are an American classic - chances are good that every American adult
had one as a child, or knew someone who did. And while history smiles fondly on Radio
Flyers, today’s modern kid might not. Action figures, video games and tech toys dominate
the landscape for today’s youth. It is Radio Flyer’s main aim to convince parents and kids
that Radio Flyers are fun and engaging, and a great alternative to toys that keep kids inside
and on the couch.
From the Radio Flyer website: “Radio Flyers let kids use their imagination and their muscles
to have a blast. Radio Flyers can be used for almost anything a kid can dream up – rocket
ship, car, traveling circus, or to haul 1000 miniature toy cars. And it’s impossible to use while
sitting on the couch. Plus, it’s sturdy and dependable and will last an entire childhood. You
can also now customise your wagon for your child online at Radioflyer.com.”
31. Where to find Radio Flyer’s Marketing Strategies?
Online - Radioflyer.com
Like the Red Wagon that lent the company its name, Radio Flyer has become an American
Classic. From humble beginnings, Radio Flyer has been rediscovered with each new
generation — creating a legacy of toys that continue to spark the imagination. For over 90
years, millions of children have played with Radio Flyer wagons launching countless voyages
of imagination.
Recently, Radio Flyer embarked on a new voyage, launching a new, e-commerce-enabled
corporate Web site that allows consumers to purchase Radio Flyer merchandise and
replacement parts.
RadioFlyer.com includes a number of innovative features that allows the company to
promote merchandise online and communicate directly with its customers. Shoppers can
purchase wagons, trikes, scooters, ride-ons, accessories and product replacement parts
online, or use the store locator to find the nearest brick-and-mortar retailer that sells their
desired product. Integrated product video demonstrations also give visitors the capability to
learn about specific toys and ask product-related questions.
Radio Flyer has given consumers a more interactive, personalized shopping experience,
allowing them to view an online catalog of products, parts and accessories, as well as
compare and add items to their online wish list. The company recognized the importance of
expanding its online capabilities to better communicate with customers, enabling them to
find and purchase Radio Flyer products that are right for them.
YouTube
https://www.youtube.com/user/Radioflyer/
2,767 subscribers
2,937,921 views
Facebook
https://www.facebook.com/radioflyer/
739,903 likes
Instagram
https://www.instagram.com/radioflyerinc/
For over 99 years, we've encouraged kids and families to get out and play. We love to create
smiles & memories! radioflyer.com
369 posts
9,902 followers
214 following
32. Pinterest
https://www.pinterest.com/radioflyerbrand/
For 99 years, we've encouraged kids and families to get out and play. We love to create
smiles and memories that last a lifetime!
26 Boards
823 Pins
3 Likes
1.4k Followers
123 Following
Twitter
https://twitter.com/radioflyer/
Tweets 3,013
Following 686
Followers 4,416
Likes 764
Lists 1
Vimeo
https://vimeo.com/69202372
(a webinar on driving sales at Radio Flyer)
33. Possible Future Direction of the Company
Enduring childhood icons aren’t made overnight, and the Radio Flyer ‘little red wagon’ is no
exception – the brand’s reputation as an American classic is nearly a century in the making.
But heritage isn’t enough to succeed in the modern fiercely competitive toy market. The Toy
Industry Association estimates the U.S. market size for the total toy industry to be in the $25
billion range in 2015 (approximately a quarter of the overall global market) – and continued
innovation is an essential part of Radio Flyer’s strategy going forward.
The good news is that key industry trends in 2016 dovetail nicely with Radio Flyer’s
aesthetic. At the 113th North American International Toy Fair in February 2016, the Toy
Industry Association’s Trends Team noted a desire for nostalgia and traditional toys, playing
to Radio Flyer’s strengths. There is also growing interest in both ‘creator’ and ‘brain booster’
toys: in both cases, the opportunity for a child to help assemble a Radio Flyer product
(alongside an adult) can be a satisfying learning experience.
Beyond assembly, this points toward future opportunities for toys which kids can build by
themselves - possibly miniature versions of Radio Flyer’s current line of full-sized toys, with
lots of customisable features just like the ‘real’ thing. Going back to nostalgia, one of the
miniatures could be a reproduction of the ‘1933 World’s Fair Souvenir Coaster Wagon’ and
this could possibly introduce a whole line of retro mini models.
These buildable minis could tie into yet another 2016 trend for collectibles, giving builders
the ability to create a whole fleet of Lilliputian Radio Flyers, and trade them with their
friends. Minis would also have great potential for generating buzz on social media.
As an alternative/complement) to physical building of miniatures/models, 3D printing kits
could allow users to start with a basic Radio Flyer designed template which is customisable
via an online app, then take their creation as far into the realms of fantasy as they wish.
These ‘Flyers of Fantasy’ creations could be part of competitions. This might be facilitated
through partnership/collaboration with an established entity like MakerBot Thingiverse.
‘Flyers of Fantasy’ could be pitched not only at individual level, but as school activities for
teams in divisions ranging from elementary schools to university engineering programs. The
best designs could then be built full-sized by Radio Flyer and presented to the winner and/or
displayed in a ‘Hall of Fame’ at Radio Flyer HQ. Apart from being a lot of fun for those
involved, and encouraging design and engineering skills, these competitions could reveal
consumer trends (and generate a lot of very visual publicity).
Another valuable educational partnership could be forged via the FIRST foundation.
Founded in 1989, FIRST (For Inspiration and Recognition of Science and Technology) was
created by Dean Kamen ‘to inspire young people's interest and participation in science and
technology.’ Radio Flyer could use this platform to create a program for kids to build robots
(inspired by Radio Flyer designs), and possibly even engineer robotic elements to be brought
to market and included in future Radio Flyer products. This offers another way to engage
children and encourage them to pursue careers in STEM (science, technology, engineering,
mathematics)-related fields.
34. New product lines and educational partnerships aside, there is still the tried-and-tested
model of designing new and improved wagons; here there is also innovation on the horizon.
“Companies such as Radio Flyer continue to receive patents on their new wagon designs.
For example, a recent patent describes a toy wagon which has additional storage capacity
built in. Another patent describes a wagon with a steering handle that is easier to pull.”
As CEO Robert Pasin says, this is an ongoing process integral to Radio Flyer’s future. Recent
renovation of the old factory and investment in a “world-class” model shop (complete with
3D printers and computer numerical control machines) are keeping product designers
motivated. “When we interview someone and show them the model shop, they start
salivating,” Pasin says. “We have a simple product—it’s stuff with wheels—but we’re very
innovative in our space and have won a lot of awards for that.”
But Radio Flyer know that the future isn’t just about products - it’s about people. With
numerous ‘Best Places to Work’ awards (including the top spot in the Small Companies
category on the ‘Best Places to Work in Illinois’ list two years running), Radio Flyer is
attracting a talented, enthusiastic workforce.
The company is inspiring loyalty, keeping morale high and retaining these employees by
offering “100 percent employer paid medical and dental coverage, profit-sharing, tuition
reimbursement, paid volunteer time off, an on-site health assessment program and chair
massage and wellness reimbursement, encouraged employees - known known as ‘Flyers’ -
to ‘become kids again, with pride in the big red wagon’. The family-friendly Radio Flyer
workplace provides paid maternity and paternity leave, celebrations for significant events in
Flyers' work lives and personal lives, spontaneous awards and a true work-life balance.”
Radio Flyer have also established ‘Wagon U’ to further the education and enhance the skill
set of employees. Wagon U’s mission is ‘to provide learning experiences and tools that help
us achieve our Vision, Mission and Values and that build capability for all team members to
advance their personal and professional journeys from Good to Great.”
This demonstrates a continued dedication to the family firm’s ethics established by Antonio
Pasin when he first helped his immigrant employees to learn English and build their own
homes in the community. And this commitment will benefit Radio Flyer for years - even
generations - to come, as talent gravitates toward this uniquely successful small company in
Chicago, creating endless opportunities for innovation.
Finally, Radio Flyer is considering the state of the planet. In choosing a Key Partner in the
Arbor Day Foundation, the Build-A-Forest program donates money ‘to plant a tree in the
United States for every toy purchased on radioflyer.com’. This is in addition to Radio Flyer’s
commitment to taking their own steps at the headquarters in Chicago to be a sustainable
and environmentally responsible company - from encouraging recycling to providing bike
storage and a locker room (for those who bike to work) to preferred parking for high-
efficiency, low-emission cars to their environmentally-focused building. This last
achievement was rewarded with a LEED Platinum certification in 2014. “Our mission is to
create awesome kids’ products that inspire outdoor active play, so it just makes sense that
we work to do our part to improve the environment,” said Robert Pasin in a statement. “We
are so proud to have achieved the distinction of LEED Platinum.”
35. Conclusion
Radio Flyer stands apart from its competitors by being a small, family-run company with a
big reputation. Its rich history goes back three generations, but the current CEO - grandson
of the founder - has managed to modernise, streamline and revitalise the nearly century-old
company whilst retaining its original values.
After a lull in innovation and a failure to keep up with trends nearly sank the company, the
Radio Flyer renaissance is in full swing under its current leadership. Products have become
more diverse, but the commitment to quality (and a good customer experience) has only
grown over time with a new emphasis on embracing new technologies.
Systems which were outdated and no longer fit for purpose have been upgraded, and ideas
about how - and where - to make the products have been overhauled to reflect today’s
global manufacturing landscape, changing tastes and emerging markets.
The company’s interest in recruiting and keeping quality staff is apparent: once in the door,
the talent that Radio Flyer attracts is then nurtured and developed. This family company -
making products beloved by families - has bred a culture of family-friendliness, looking after
both the staff’s well-being and job satisfaction with a nod to their personal lives.
This mix of old and new, traditional and cutting-edge points the way forward for a company
which had once lost its handle on growth and progress. Today, Radio Flyer is on a roll.
