ba 352 ch9 openended toy industry
TRANSCRIPT
Lorelay Corona
Angela Van Strander
Matthew Vital
The Toy Industry Term used to describe
industries that produce small number of goods in any material Hinges, buttons, belts, hooks,
etc. “Playthings”
1st based on small-cottage manufactories(London) Rise of the
middle class, a demand that led to rapid expansion of the industry○ Mid-18th century
Later, a number of very large manufactories were built.
Background (Cont’d) The US toy manufacturing
industry includes: About 700 companies and Has annual revenue of $20
billion
Most manufacturing is conducted in overseas factories Primarily in China.
Highly concentrated industry Top 50 companies generate
about 75%of revenue
Major Players
1. Mattel
2. Hasbro
3. Bandai
4. Lego
5. Tiger Electronics
#1. Mattel World’s largest toy
companyBarbie
○ Generates 80% of revenue sales
Hot WheelsAmerican GirlPolly PocketMatchbox
2007 – Toy Recalls~1 million toys in
China○ +180 times the limit of
lead paint Dora the Explorer,
Sesame Street
Widespread criticism of Mattel○ “Bad product” awards○ Fortune “Dumbest
Moment” in business of the year
#2. Hasbro 2nd largest global toy
maker Long-lasting toy
franchises since the 1920s○ Mr. Potato Head○ G.I. Joe○ Transformers○ My Little Pony
Board Games○ Monopoly○ Candy Land○ Scrabble○ Trivial Pursuit○ Pictionary○ Recently, Cranium Inc.
for $77.5 million
#3. Bandai
3rd largest toy manufacturerBased in Japan
Popular video games forNintendoSegaPlayStationGame BoyWiiXbox
#4. Lego
1934, Danish toymakerOle Kirk Christiansen
○ 1st line of wooden toys, then produced plastic bricks (legos)
Popular culture phenomenaStar WarsHarry Potter
#5. Tiger Electronics
American electronic-toy manufacturer
Subsidiary of HasbroHandheld gamesFurbyGiga Pets
Leading electronic toys for: Star Trek Neopets Barney Jeopardy Who Wants to Be a
Millionare? Winnie the Pooh
Minor Players
Fisher-Price Leap Frog Playskool
Fisher-Price
Headquarters: East Aurora, NY
Infant toysSubsidiary of Mattel,
Inc. (1933) Products
Little People toysPower WheelsOthers: Disney,
Sesame Street, Barney, Dora the Explorer, & See ‘n Say
Leap Frog
Based in Emeryville, CA
Leading designer, developer, & marketer of innovative, technology-based educational products world-wide
Most engaging & effective learning experience for all agesTag, Tag Jr., Zippity,
Scout, Leapster
Playskool
American company; headquarters in Pawtucket, RISubsidiary of Hasbro
Educational toys & games for childrenMr. PotatoPlay-DohTonkaTinker ToysLincoln LogsWeeblesGloworms
Common Trends AmongMajor Players
Budget ToysBasic, nostalgia
○ i.e. remote controlled cars
Movie ToysMovie-licensed toys
○ Iron Man, Superman, Batmam
Organic & Green ToysEco-friendly
raw materials from reused & recycled materials
Interactive and Digital ToysComputerized-
virtual world
The Toy Industry within OM:Supply Chain Structure
Manufacturer
Distributor
Warehouse
Retailer
Consumer
GOODS
$$$
The Toy Industry within OM: Push System
(def) Produce goods in advance of customer demand using a forecast of sales […]Replenish shelves as needed
The Toy Industry within OM:Value Chain Model
Management
Outsourcing
70% + toys are manufactured in China
Reasons for Outsourcing:Experience-specializationFast-track response
quick opportunities emerge
Save money & time○ Market
Intelligence3rd party research on market trends
Ethical Concerns
Labor Standards: Increased focus on
standards Req. by USA brands
Relocation of factories to cheap, remote area
Hiding bad practices
Recall of 45 million toys imported from ChinaConsumer Product
Safety Improvement Act○ Passed: August 2008○ In-Effect: February
2010
Innovations Webkinz
Ganz Company○ Stuffed animal with
unique “Secret Code”○ Webkinz World website
Concept: Giga pets
Green Toys Inc. Line of classic children’s toys
constructed from recycled plastic & other environmentally friendly materials.
Helps reduce fossil fuel use and greenhouse gas emissions Improving the overall
health and happiness of the planet
Differences betweenSmall vs. Large CompaniesSmall Companies:
Competitive Specialize in product
segment Respond faster to
market trends
Large Companies: Wide selection of toys Have scale advantages
in: Purchasing Manufacturing Distributing Selling Marketing
US vs. InternationalCompanies (List)
United States Tiger Electronics,
Massachusetts Fisher Price, New York Leapfrog, California Playskool, Rhode Island
International Hasbro, global Mattel, global Bandai, Japan
Differences between US & International Companies
US Traditional Toy Markets
Differences between US & International Companies International Traditional Toy Markets
References http://www.answers.com/topic/hasbro http://www.articlesbase.com/computer-games-articles/2009-top-
trends-for-toy-industry-879457.html http://www.firstresearch.com/industry-research/Toy-
Manufacture.html http://www.greentoys.com/about.html http://www.hoovers.com/toy-manufacture/--ID__244--/free-ind-fr-
profile-basic.xhtml http://www.hoovers.com/toy-manufacture/--ID__244--/free-ind-fr-
profile-basic.xhtml http://www.stanford.edu/group/scforum/Welcome/White
%20Papers/Demand%20Chain%20Optimization%20-%20Evant%20white%20paper.pdf
http://www.usatoday.com/money/world/2006-12-20-china-toys-usat_x.htm
Any Questions???