BA 352 Ch9 OpenEnded Toy Industry

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BA 352 Ch9 OpenEnded Toy Industry

  1. 1. Lorelay Corona Angela Van Strander Matthew Vital
  2. 2. The Toy Industry <ul><li>Term used to describe industries that produce small number of goods in any material </li></ul><ul><ul><li>Hinges, buttons, belts, hooks, etc. </li></ul></ul><ul><li>“ Playthings” </li></ul><ul><li>1 st based on small-cottage manufactories </li></ul><ul><ul><li>(London) Rise of the middle class, a demand that led to rapid expansion of the industry </li></ul></ul><ul><ul><ul><li>Mid-18th century </li></ul></ul></ul><ul><ul><li>Later, a number of very large manufactories were built. </li></ul></ul>
  3. 3. Background (Cont’d) <ul><li>The US toy manufacturing industry includes: </li></ul><ul><ul><li>About 700 companies and </li></ul></ul><ul><ul><li>Has annual revenue of $20 billion </li></ul></ul><ul><li>Most manufacturing is conducted in overseas factories </li></ul><ul><ul><li>Primarily in China. </li></ul></ul><ul><li>Highly concentrated industry </li></ul><ul><ul><li>Top 50 companies generate about 75%of revenue </li></ul></ul>
  4. 4. Major Players <ul><li>Mattel </li></ul><ul><li>Hasbro </li></ul><ul><li>Bandai </li></ul><ul><li>Lego </li></ul><ul><li>Tiger Electronics </li></ul>
  5. 5. #1. Mattel <ul><li>World’s largest toy company </li></ul><ul><ul><li>Barbie </li></ul></ul><ul><ul><ul><li>Generates 80% of revenue sales </li></ul></ul></ul><ul><ul><li>Hot Wheels </li></ul></ul><ul><ul><li>American Girl </li></ul></ul><ul><ul><li>Polly Pocket </li></ul></ul><ul><ul><li>Matchbox </li></ul></ul><ul><li>2007 – Toy Recalls </li></ul><ul><ul><li>~1 million toys in China </li></ul></ul><ul><ul><ul><li>+180 times the limit of lead paint </li></ul></ul></ul><ul><ul><ul><ul><li>Dora the Explorer, Sesame Street </li></ul></ul></ul></ul><ul><ul><li>Widespread criticism of Mattel </li></ul></ul><ul><ul><ul><li>“ Bad product” awards </li></ul></ul></ul><ul><ul><ul><li>Fortune “Dumbest Moment” in business of the year </li></ul></ul></ul>
  6. 6. #2. Hasbro <ul><li>2 nd largest global toy maker </li></ul><ul><ul><li>Long-lasting toy franchises since the 1920s </li></ul></ul><ul><ul><ul><li>Mr. Potato Head </li></ul></ul></ul><ul><ul><ul><li>G.I. Joe </li></ul></ul></ul><ul><ul><ul><li>Transformers </li></ul></ul></ul><ul><ul><ul><li>My Little Pony </li></ul></ul></ul><ul><ul><li>Board Games </li></ul></ul><ul><ul><ul><li>Monopoly </li></ul></ul></ul><ul><ul><ul><li>Candy Land </li></ul></ul></ul><ul><ul><ul><li>Scrabble </li></ul></ul></ul><ul><ul><ul><li>Trivial Pursuit </li></ul></ul></ul><ul><ul><ul><li>Pictionary </li></ul></ul></ul><ul><ul><ul><li>Recently, Cranium Inc. for $77.5 million </li></ul></ul></ul>
  7. 7. #3. Bandai <ul><li>3 rd largest toy manufacturer </li></ul><ul><ul><li>Based in Japan </li></ul></ul><ul><li>Popular video games for </li></ul><ul><ul><li>Nintendo </li></ul></ul><ul><ul><li>Sega </li></ul></ul><ul><ul><li>PlayStation </li></ul></ul><ul><ul><li>Game Boy </li></ul></ul><ul><ul><li>Wii </li></ul></ul><ul><ul><li>Xbox </li></ul></ul>
  8. 8. #4. Lego <ul><li>1934, Danish toymaker </li></ul><ul><ul><li>Ole Kirk Christiansen </li></ul></ul><ul><ul><ul><li>1 st line of wooden toys, then produced plastic bricks (legos) </li></ul></ul></ul><ul><li>Popular culture phenomena </li></ul><ul><ul><li>Star Wars </li></ul></ul><ul><ul><li>Harry Potter </li></ul></ul>
  9. 9. #5. Tiger Electronics <ul><li>American electronic-toy manufacturer </li></ul><ul><li>Subsidiary of Hasbro </li></ul><ul><ul><li>Handheld games </li></ul></ul><ul><ul><li>Furby </li></ul></ul><ul><ul><li>Giga Pets </li></ul></ul><ul><li>Leading electronic toys for: </li></ul><ul><ul><li>Star Trek </li></ul></ul><ul><ul><li>Neopets </li></ul></ul><ul><ul><li>Barney </li></ul></ul><ul><ul><li>Jeopardy </li></ul></ul><ul><ul><li>Who Wants to Be a Millionare? </li></ul></ul><ul><ul><li>Winnie the Pooh </li></ul></ul>
  10. 10. Minor Players <ul><li>Fisher-Price </li></ul><ul><li>Leap Frog </li></ul><ul><li>Playskool </li></ul>
  11. 11. Fisher-Price <ul><li>Headquarters: East Aurora, NY </li></ul><ul><li>Infant toys </li></ul><ul><ul><li>Subsidiary of Mattel, Inc. (1933) </li></ul></ul><ul><li>Products </li></ul><ul><ul><li>Little People toys </li></ul></ul><ul><ul><li>Power Wheels </li></ul></ul><ul><ul><li>Others: Disney, Sesame Street, Barney, Dora the Explorer, & See ‘n Say </li></ul></ul>
  12. 12. Leap Frog <ul><li>Based in Emeryville, CA </li></ul><ul><li>Leading designer, developer, & marketer of innovative, technology-based educational products world-wide </li></ul><ul><li>Most engaging & effective learning experience for all ages </li></ul><ul><ul><li>Tag, Tag Jr., Zippity, Scout, Leapster </li></ul></ul>
  13. 13. Playskool <ul><li>American company; headquarters in Pawtucket, RI </li></ul><ul><ul><li>Subsidiary of Hasbro </li></ul></ul><ul><li>Educational toys & games for children </li></ul><ul><ul><li>Mr. Potato </li></ul></ul><ul><ul><li>Play-Doh </li></ul></ul><ul><ul><li>Tonka </li></ul></ul><ul><ul><li>Tinker Toys </li></ul></ul><ul><ul><li>Lincoln Logs </li></ul></ul><ul><ul><li>Weebles </li></ul></ul><ul><ul><li>Gloworms </li></ul></ul>
  14. 14. Common Trends Among Major Players <ul><li>Budget Toys </li></ul><ul><ul><li>Basic, nostalgia </li></ul></ul><ul><ul><ul><li>i.e. remote controlled cars </li></ul></ul></ul><ul><li>Movie Toys </li></ul><ul><ul><li>Movie-licensed toys </li></ul></ul><ul><ul><ul><li>Iron Man, Superman, Batmam </li></ul></ul></ul><ul><li>Organic & Green Toys </li></ul><ul><ul><li>Eco-friendly raw materials from reused & recycled materials </li></ul></ul><ul><li>Interactive and Digital Toys </li></ul><ul><ul><li>Computerized-virtual world </li></ul></ul>
  15. 15. The Toy Industry within OM: Supply Chain Structure GOODS $$$ Manufacturer Distributor Warehouse Retailer Consumer
  16. 16. The Toy Industry within OM: Push System <ul><li>(def) Produce goods in advance of customer demand using a forecast of sales […] </li></ul><ul><ul><li>Replenish shelves as needed </li></ul></ul>
  17. 17. The Toy Industry within OM: Value Chain Model Management
  18. 18. Outsourcing <ul><li>70% + toys are manufactured in China </li></ul><ul><li>Reasons for Outsourcing: </li></ul><ul><ul><li>Experience-specialization </li></ul></ul><ul><ul><li>Fast-track response  quick opportunities emerge </li></ul></ul><ul><ul><li>Save money & time </li></ul></ul><ul><ul><ul><li>Market Intelligence  3 rd party research on market trends </li></ul></ul></ul>
  19. 19. Ethical Concerns <ul><li>Labor Standards: </li></ul><ul><ul><li>Increased focus on standards </li></ul></ul><ul><ul><ul><li>Req. by USA brands </li></ul></ul></ul><ul><ul><li>Relocation of factories to cheap, remote area </li></ul></ul><ul><ul><li>Hiding bad practices </li></ul></ul><ul><li>Recall of 45 million toys imported from China </li></ul><ul><ul><li>Consumer Product Safety Improvement Act </li></ul></ul><ul><ul><ul><li>Passed: August 2008 </li></ul></ul></ul><ul><ul><ul><li>In-Effect: February 2010 </li></ul></ul></ul>
  20. 20. Innovations <ul><li>Webkinz </li></ul><ul><ul><li>Ganz Company </li></ul></ul><ul><ul><ul><li>Stuffed animal with unique “Secret Code” </li></ul></ul></ul><ul><ul><ul><li>Webkinz World website </li></ul></ul></ul><ul><ul><ul><ul><li>Concept: Giga pets </li></ul></ul></ul></ul><ul><li>Green Toys Inc. </li></ul><ul><ul><li>Line of classic children’s toys constructed from recycled plastic & other environmentally friendly materials. </li></ul></ul><ul><ul><li>Helps reduce fossil fuel use and greenhouse gas emissions </li></ul></ul><ul><ul><ul><li>Improving the overall health and happiness of the planet </li></ul></ul></ul>
  21. 21. Differences between Small vs. Large Companies <ul><li>Small Companies: </li></ul><ul><ul><li>Competitive </li></ul></ul><ul><ul><li>Specialize in product segment </li></ul></ul><ul><ul><li>Respond faster to market trends </li></ul></ul><ul><li>Large Companies: </li></ul><ul><ul><li>Wide selection of toys </li></ul></ul><ul><ul><li>Have scale advantages in: </li></ul></ul><ul><ul><ul><li>Purchasing </li></ul></ul></ul><ul><ul><ul><li>Manufacturing </li></ul></ul></ul><ul><ul><ul><li>Distributing </li></ul></ul></ul><ul><ul><ul><li>Selling </li></ul></ul></ul><ul><ul><ul><li>Marketing </li></ul></ul></ul>
  22. 22. US vs. International Companies (List) <ul><li>United States </li></ul><ul><li>Tiger Electronics, Massachusetts </li></ul><ul><li>Fisher Price, New York </li></ul><ul><li>Leapfrog, California </li></ul><ul><li>Playskool, Rhode Island </li></ul><ul><li>International </li></ul><ul><li>Hasbro, global </li></ul><ul><li>Mattel, global </li></ul><ul><li>Bandai, Japan </li></ul>
  23. 23. Differences between US & International Companies <ul><li>US Traditional Toy Markets </li></ul>
  24. 24. Differences between US & International Companies International Traditional Toy Markets
  25. 25. References <ul><li>http://www.answers.com/topic/hasbro </li></ul><ul><li>http://www.articlesbase.com/computer-games-articles/2009-top-trends-for-toy-industry-879457.html </li></ul><ul><li>http://www.firstresearch.com/industry-research/Toy-Manufacture.html </li></ul><ul><li>http://www.greentoys.com/about.html </li></ul><ul><li>http://www.hoovers.com/toy-manufacture/--ID__244--/free-ind-fr-profile-basic.xhtml </li></ul><ul><li>http://www.hoovers.com/toy-manufacture/--ID__244--/free-ind-fr-profile-basic.xhtml </li></ul><ul><li>http://www.stanford.edu/group/scforum/Welcome/White%20Papers/Demand%20Chain%20Optimization%20-%20Evant%20white%20paper.pdf </li></ul><ul><li>http://www.usatoday.com/money/world/2006-12-20-china-toys-usat_x.htm </li></ul>
  26. 26. Any Questions???

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