p1 final report deck

39
Date: Thursday, February 10th,2016 To: Professor Benedict Professor Lambert Professor L. Marchese Professor Wright From: PM 101 Group 5 Sam Breiter Robert Gorney Duncan Lang Evan Rose Steven Turner Subject: Toy and Manufacturing Industry: Hasbro vs Mattel, JAKKS Pacific, and Overall Industry This research report on the toy industry has been compiled by PM 101 Team 5 as requested by the senior managers of Copeland Associates on January 11 th , 2016. Our team has analyzed the industry, conducted a market analysis, as well as proposed several key success factors for the industry as a whole. Additionally, our team has analyzed the company Hasbro, while also looking at the company’s competitors Mattel and JAKKS Pacific. Similarly, from this research, our team was able to compare each company using the previously noted key success factors that were decided on. Our team concluded our report with recommendations for our analyzed company, Hasbro, that could be used to improve the company or continue improving on their strengths. For the purpose of this report, our team considered the following criteria: Macroeconomic trends currently affecting the industry Current and future consumer trends within the industry The company’s ability to capitalize on the proposed key success factors Finally, our team would like to thank professor Scott Wright in his assistance as a senior mentor in the creation of this project, as well as the rest of the senior managers of Copeland Associates. If any of the senior partners of Copeland Associates have questions regarding the contents of this report, please feel free to contact any member of our team. Thank you for your time and consideration. LETTER OF TRANSMITTAL

Upload: robert-gorney

Post on 15-Apr-2017

169 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: P1 Final Report Deck

Date: Thursday, February 10th,2016

To: Professor BenedictProfessor LambertProfessor L. MarcheseProfessor Wright

From:

PM 101 Group 5

Sam BreiterRobert GorneyDuncan LangEvan RoseSteven Turner

Subject: Toy and Manufacturing Industry: Hasbro vs Mattel, JAKKS Pacific, and Overall Industry

This research report on the toy industry has been compiled by PM 101 Team 5 as requested by the senior managers of Copeland Associates on January 11th, 2016. Our team has analyzed the industry, conducted a market analysis, as well as proposed several key success factors for the industry as a whole. Additionally, our team has analyzed the company Hasbro, while also looking at the company’s competitors Mattel and JAKKS Pacific. Similarly, from this research, our team was able to compare each company using the previously noted key success factors that were decided on. Our team concluded our report with recommendations for our analyzed company, Hasbro, that could be used to improve the company or continue improving on their strengths.

For the purpose of this report, our team considered the following criteria:• Macroeconomic trends currently affecting the industry• Current and future consumer trends within the industry• The company’s ability to capitalize on the proposed key success factors

Finally, our team would like to thank professor Scott Wright in his assistance as a senior mentor in the creation of this project, as well as the rest of the senior managers of Copeland Associates. If any of the senior partners of Copeland Associates have questions regarding the contents of this report, please feel free to contact any member of our team. Thank you for your time and consideration.

LETTER OF TRANSMITTAL

Page 2: P1 Final Report Deck

Prepared By:

Robert Gorney

Sam Breiter

Duncan Lang

Steven Turner

Evan Rose

Prepared For:

Prof. Scott Wright

Prof. Jamie Lambert

Prof. Lori Marchese

Prof. Paul Benedict

Dinosaurs of Consumer Discretionary:An Analysis of the Toy Industry

Page 3: P1 Final Report Deck

The Toy and Manufacturing Industry is a global, seasonal industry, being led by billion dollar companies, who sell to huge retailers, and thrive through licensing and innovation. Companies like Hasbro, Mattel, and JAKKS Pacific make the industry what it is today, selling to retailers like Toys R Us, Walmart, and Target. These companies have many strengths and weaknesses that keep them alive, but opportunities and threats can either help or hurt their company objectives. To promise growth, consistency, and success, the following success factors should be implemented by toy companies.

Key Success Factors should be part of Hasbro’s, Mattel’s, and JAKKS business strategy. 1. Penetration of Emerging Consumer Markets in Asia-Pacific2. Access to Master Licensing for Popular Franchises3. Innovation of Previously Successful Product Lines

It’s understood that in the toy industry emerging markets are valuable for toy companies to do business in, especially because many regions outside the U.S have growing economies, increasing values in there kids happiness, and significant youth population increases. Although it’s too brief to just say emerging markets, which is why we specifically chose Asia- Pacific, which represents 30.6% of the total global market value for the industry, and is the fastest growing region in the industry at 8.4% CAGR. Asia pacific is expected to have a 6% growth by 2019, with an estimated market value of $37.9 billion. China makes up 43.8% of the region's market value, and even though they just suffered their lowest economic expansion in years, they still had a 6.9% growth in GDP. They have 211 million people under 14 years old, and retail sales are expected grow to $13.8 billion by 2019, especially since they have more money to spend on discretionary goods than most other emerging markets. In terms of India, they have over 700 million people under 30, a 0-4 population twice the size of France, and by 2025 are expected to be the world population leader with an estimated 1.5 billion. China and India are expected to represent 35% of the global population by 2030. For Hasbro, the transformers brand does very well in Asia Pacific, making $318 million at the Middle Kingdom box office. Hasbro had a 8.8% increase in revenue from Asia Pacific from 2013-2014.

Licensing has been a way toy companies can work with the companies who produce popular movies and TV shows, and under royalty fees have the freedom to make their toys. There has been a 22% increase in revenue from licensed toys in the United States. In 2014, there was $5.9 billion in licensed toy sales. Even though the profit is lower per toy because of the royalty fee, the volume of toys companies are able to sell because of high demand makes up for it. Globally as well, licensed toys have an impact, with 40% of Asia Pacific toy sales being licensed toys. Hasbro had a 5% increase in product revenue from licensed toys, and has recently seen a 60% increase in sales due to the 2015 films that have came out. Hasbro also recently acquired the Disney Princess licensing deal, allowing them to sell Frozen products. This doubled girl sales in 2014. Transformers, and Star Wars have helped immensely, and with the new movies that have recently came back, 2015 revenue numbers are expected to be impressive.

Toy companies have had a lot of success, just like any business, of taking a toy brand they have, and investing in it to keep it growing, and continually having new products. Many of the top toy products today have been around for over 20 years, but are new advanced versions of the previous models. When looking at 2015’s top toys, Easy Bake Oven, Razor, and Elmo toy brands came out with new products that were on the top of the list. Easy Bake Oven has created 11 different models through their 53 year history, and have been constantly been increasing revenues during new product release year's. Razor, has gone from a simple Scooter, to an electronic HoverBoard. The Elmo brand has helped increase Mattel's yearly EBIT, giving them a 90.8% growth in 2000, and over a 40% growth in 2002. Although there lack of innovation with there new product in 2012, actually resulted in a 2.6% decline. For Hasbro, between there franchised, challenger, gaming mega mini, and partner brands, they have established a baseline of products to constantly be innovating. In 2011 33% of Hasbro’s revenue came from the Transformers, Beyblade, and Nerf brand, which all had over $400 million in revenue, helping revenue reach almost $4.3 billion. Although, after 2011, Hasbro did a lot of R/D. It took until 2014 for them to get revenue back up to where it was in 2011, although it was their highest year in terms of percentage of toys from franchised brands, which was 55%.

Overall, these success factors clearly have a lot of proof backing up the potential impact they could have if toy companies followed them. Based on looking over Hasbro, and their competitors, Hasbro was rated the best company for these factors, receiving a composite score of a 7.53.

EXECUTIVE SUMMARY

Page 4: P1 Final Report Deck

TABLE OF CONTENTS

Introduction Page 5

Market Analysis Page 6

Key Success Factors Page 7

Key Success Factor 1 Page 7

Key Success Factor 2 Page 11

Key Success Factor 3 Page 15

Company Analysis Page 19

Competitor Analysis Page 21

Mattel Analysis Page 21

JAKKS Pacific Analysis Page 22

Recommendations Page 23

Conclusion Page 24

Appendix Page 25

Appendix A Page 25

Appendix B Page 27

Appendix C Page 28

Appendix D Page 29

Appendix E Page 31

Appendix F Page 32

Appendix G Page 35

Appendix H Page 36

Appendix J Page 36

References Page 37

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 5: P1 Final Report Deck

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

INTRODUCTION

Introduction

*See appendix I for more detailed version of weighting table

Key Success Factor Weight% Hasbro Mattel JAKKSPacific

Penetration of Emerging Consumer Markets in Asia-Pacific

45% 3.0 3.15 1.2

Access to Master Licensing ForPopular Franchises

35% 2.8 2.03 2.10

Ability to Innovate Previously Successful Product Lines

20% 1.73 1.41 0.67

Weighted Total 100% 7.53 6.59 3.97

The goal of our project was to analyze and understand the Toy Industry. After analyzing the industry, our team find three factors that formulate success for companies within the industry. Our Key Success Factors are as follows:

1. Penetration of emerging consumer markets in Asia-Pacific

2. Access to master licensing for popular franchises

3. Ability to Innovate Previously Successful Product Lines

We gave emerging consumer markets the largest weighting due to the trend of large companies within the industry moving part of their operations overseas to generate larger amounts of revenue. Additionally, strong demographics in countries such as China and India offer promise for companies who are able to move operations overseas.

Similarly, our team decided to weigh licensing at 35% due to the increasing importance of partnerships with top franchises and entertainment companies. Many companies in the industry today have seen licensed toys add stability and growth to their top line, most notably Mattel and Hasbro.

A company’s ability to create relations with top entertainment may be the difference between growth or failure for a company.

Lastly, we weighted the ability to innovate previously successful product lines at 20% because of the familiarity it creates with a company’s customers. Company’s are able to build off the familiarity of a product by continuously reinventing and re-releasing it. Several large toy companies including Mattel and Hasbro have been able to see success in their franchise brands by innovating and re-releasing previously created products.

Page 6: P1 Final Report Deck

Currently the traditional toys and games market is under assault. The market has been experiencing pressure and strain from the rise in popularity of video games, smartphones and tablets. Digital entertainment is also competing for the share of children’s attention (Erwina, 2015). Also, children are maturing at a faster rate, which makes the lifetime of consumers less than it was in the past (Erwina, 2015).

While increase in child population does not always equal increase of toy revenues, but the overall child population in developing countries was 1.6 billion in 2011 and comprising of 90% of the global child population (Daujotas, 2013). This allows for an active market place for traditional toys and games as the Asia Pacific region accounts for 52.5 % of the global children population.

2015 is expected to be a year of slow growth within traditional toys and games as global retail value sales will likely post a 2.1% increase over 2014 in constant terms (Euromonitor, 2015). Emerging markets in Asia Pacific are currently the biggest drivers of growth in the toy industry, with three of the five fastest-growing markets in the Asia Pacific region (Euromonitor, 2015).

MARKET ANALYSIS

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 7: P1 Final Report Deck

0%

5%

10%

$0

$10,000

$20,000

$30,000

$40,000

% G

row

th

$ m

illio

n

Year

Asia-Pacific Toys & Games Market Value Forecast

$ Million % Growth

Key Success Factor: Penetration of Emerging Consumer Markets in Asia-PacificAs the consumer market for toys in the United States begin to thin, companies are beginning to look towards strong growth economies elsewhere. Two countries that come to mind immediately include China and India. The Asia-Pacific is comprised of both these countries. Currently representing 30.6% of the industry’s total global market value, the Asia-Pacific is the industry’s fastest growing geographical region at a compounded annual growth rate of 8.4% (see figure 7) (Ebscohost, 2015).

Growth Economy – China

China just recently experienced their lowest economic expansion in 25 years, citing GDP growth of 6.9% in fiscal year 2015. However, the country boasts strong demographics that could offset the recent decline in GDP as the country switches from their historically industrial, manufacturing economy, to a more consumer-based, market economy.

China’s population under fourteen years of age in 2014 was 211 million people, with approximately 0.6 children-per household. Likewise, retail value sales are expected to grow year over year through 2019 (Golovko, 2015). Moreover, further currency devaluation and interest rate cuts made by China (see figure 8), will result in declining returns on investments and savings, potentially increasing consumer spending (Golovko, 2015). Specifically regarding the lending rate, China has now cut their benchmark lending rate six times since November of 2014, most recently setting it at a record low of 4.35%.

Asia-Pacific Region

The Asia-Pacific region is comprised of countries such as China, India, Australia and Japan and makes up approximately 30.6% of the global market value for the toy industry. Over the past five years, the region has experienced a compounded annual growth rate of 8.4% (see figure 7), and such growth is expected to continue through 2019, albeit at a decelerated rate of roughly 6% (see figure 8). From this, the region is expected to increase it’s market value to $37.9 billion (Ebscohost, 2015).

Within the Asia-Pacific, China makes up 43.8% of the market value for the region, with Japan accounting for an additional 20.2%. However, both countries have differing growth potentials, as analysts predict China to continue growing at a compounded annual growth rate of 6% compared to Japan’s 0.4% (Ebscohost, 2015).

Lastly, activity toys remain favorable within the industry, representing $6.16 billion in sales for the region, or approximately 21.9% of total revenue (Ebscohost, 2015).

0%

2%

4%

6%

8%

10%

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2010 2011 2012 2013 2014

% G

row

th

$ m

illio

n

Year

Asia-Pacific Toys & Games Market Value

$ Million % GrowthFigure 7

(Ebscohost, 2015)

4.14.24.34.44.54.64.74.84.9

Inte

rest

Rat

e

Date

China 1YR Benchmark Rate

Figure 8 (Ebscohost, 2015)

Figure 9 (Bloomberg Terminal)

KEY SUCCESS FACTOR 1: PENETRATION OF EMERGING CONSUMER MARKETS IN ASIA-PACIFIC

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 8: P1 Final Report Deck

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

20102011201220132014

Perc

enta

ge o

f R

even

ue

China Traditional Toy Sales by Demographic

Young Children

Pre-teens

Teenagers

Adults

Growth Economy – China Continued

As previously stated, China currently has nearly 211 million children under the age of 14. This demographics statistic is represented by the country’s increasing percentage of traditional toys and game revenue from the young children (age 0-6) and pre-teens demographic (see figure 10). Additionally, such demographics lead China to be able to spend a significantly more amount on young children than other emerging consumer markets within the industry (Golovko, 2015).

Growth Economy – India Continued

Growth Economy - India

Despite low economic indicators and a higher rate of poverty than some other emerging economies, there is an abundance of untapped potential for the toy industry in India. In 2012 alone, India’s population of people aged 30 and younger was the largest in the world, totaling 704 million people. This demographic was better than countries such as China and the United States. Similarly, the country’s population aged 0-4 totaled 126 million, which equates to approximately twice the size of the population of France.

Furthermore, India’s demographics are continuing to grow at a remarkable rate. The country is expected to overtake China as the world’s largest population by the year 2025, with a total population of nearly 1.5 billion people (see figure 11). Combined, India and China are expected to account for nearly 35% of the total global population by the year 2030 (Euromonitor, 2012). Furthermore, nearly half of India’s population is expected to be aged 30 and under, with the densest population amongst the top 5 emerging market economies at nearly 510 individuals per square kilometer (see figure 13) (Euromonitor, 2012).

Figure 10 (Golovko, 2015)

Figure 11 (Euromonitor, 2012)

Additionally, “with the election of Narenda Modi as prime minister, business confidence – both domestically and abroad – has returned to India” (Boumphrey, 2014). Some key statistics regarding India are nearly remarkable. Nearly 1 in 5 children born in 2015 will be born in India, and at approximately 26.7 million births, this is more than Latin America, North America, Western Europe, and Eastern Europe Combined (see figure 12).

Figure 11 (Boumphrey, 2014)

Figure 13 (Euromonitor, 2012)

KEY SUCCESS FACTOR 1: PENETRATION OF EMERGING CONSUMER MARKETS IN ASIA-PACIFIC

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 9: P1 Final Report Deck

Growth Economy – India Continued

Likewise, India’s GDP growth is expected to be 6.7% in 2015, with nearly 18% of households having a disposable income greater than $10,000 US (see figure 14 and 15) (Boumphrey, 2014). Both of these indicators give future hope for consumer spending growth for the country.

Hasbro – Asia-Pacific Operations

Hasbro has long been active in international markets, specifically China, where some of their franchise brands, such as Transformers, have done well. Recently, Hasbro inked a deal with China’s top film company “DMG” to “launch the world’s first live-action Transformers attraction in China” (Jaafar, 2016). The attraction will likely launch in 2017. The brand is largely popular in China, having made nearly $318 million at the Middle Kingdom box office, with Michael Bay’s Transformers: Age of Extinction being China’s top-grossing film ever (Jaafar, 2016). The Transformers brand is credited to have helped Hasbro spike their emerging markets revenue in 2014 by roughly 20% to $689.8 million (Abrams, 2015).

When looking at Hasbro’s geographical breakdown, there has been a shift away from North American revenue towards more international revenue. Hasbro had a 8.8% jump in revenue from the Asia-Pacific from 2013 to 2014 right after a 3.6% spike from 2012 to 2013 (see figure 16). Similarly, the company’s domestic operating income (EBIT) only saw a 6.3% increase from 2013 to 2014, and actually saw a drop of 1.7% from 2013 to 2014 (see figure 17). Comparatively, International EBIT saw a 12.9% jump 2013 to 2014, and a 8.5% jump from 2012 to 2013.

Figure 14 (Boumphrey, 2014)

Figure 15 (Boumphrey, 2014)

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

2010 2011 2012 2013 2014

Tota

l Op

erat

ing

Inco

me

($ U

SM)

Hasbro Asia-Pacific Revenue

Asia-Pacific Revenu % GrowthFigure 16 (Hasbro,

2015)

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

2010 2011 2012 2013 2014

% G

row

th

Hasbro EBIT North America v. International

Int'l % Growth NA % Growth

Figure 17 (Hasbro, 2015)

KEY SUCCESS FACTOR 1: PENETRATION OF EMERGING CONSUMER MARKETS IN ASIA-PACIFIC

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 10: P1 Final Report Deck

Hasbro’s Ability Continued

International markets, especially markets within China, have added an increased amount of stability to Hasbro. “Last year, oversea sales of $2.02 billion made up nearly half of Hasbro’s total revenue and increased 8% from 2013” (Abrams, 2015). The company was able to see net international revenues increase to approximately $2.24 billion in 2014, a 5.1% increase from 2013 levels.

In recent years, Hasbro has begun to increase their international operations. So much so, that in 2014, 15% of net revenue for the company came from emerging markets.

Mattel – Asia-Pacific Operations

Mattel has done exceptionally well in integrating their products into consumer markets in recent years, especially in India. In India specifically, Mattel is the only company that holds over a 5% share in value terms, at roughly 9%. Much of the success for Mattel in emerging consumer markets has been related to their ability to localize their products. For example, in India, the company has seen success in the sale of one of it’s main franchise brands, Barbie, due to the company’s ability to model the dolls after Bollywood film stars (Porter, 2014). Such facts aided to the company’s top line, where it was able to grow revenue for the brand approximately 3% in 2013 from 2012, and Asia-Pacific revenue grew roughly 1.2% from 2013 to 2014.

However, in China, Mattel has had reasonable difficulty enjoying the same success. Specifically speaking, in 2011, the company closed operations for its House of Barbie store in Shanghai after failing to integrate the brand. Unlike the US where the brand signifies a cultural symbol in a way, in China, it is considered just another doll (Wang, 2013).

0%

5%

10%

15%

$0

$100,000

$200,000

$300,000

$400,000

$500,000

% G

row

th

Rev

enu

e ($

US

M)

Mattel Revenue for the Asia-Pacific

Asia-Pacific Revenue % Growth

Figure 15 (Mattel, 2015)

JAKKS Pacific – Asia-Pacific Operations

JAKKS Pacific, the smallest of the three main toy manufacturers, appears to have been bullied out of international markets in recent years. Given their smaller market cap, the company has not been able to compete against larger competitors within the industry such as Hasbro and Mattel in international markets, let alone emerging markets. Statistically speaking, over 80% of the company’s net revenue in 2014 came from the United States, as compared to Hasbro and Mattel, whose domestic revenue totaled approximately 47% and 50% respectively (JAKKS Pacific, 2015) (see figure 16).

Similarly, the company’s product line is not as diverse as its competitors. Despite JAKKS Pacific’s recent deal with the WWE, Mattel still holds the master license. The deal is expected to hit stores in 2016, with termination in 2019 (Middleton, 2015).

0%

10%

20%

30%

40%

50%

60%

2010 2011 2012 2013 2014

% N

et S

ales

International Revenue

JAKKS HAS MATFigure 16

KEY SUCCESS FACTOR 1: PENETRATION OF EMERGING CONSUMER MARKETS IN ASIA-PACIFIC

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 11: P1 Final Report Deck

Licensing is increasingly becoming a major component of the toy industry. In 2014 alone, the top three toy licensing sales were 5.9, 1.7, and 1.5 billion dollars for the United States, Japan, and United Kingdom markets, and global sales accounted for 30% of all toy sales in the world in 2014 (Passport, 2015). Licensing is important for toy companies because it allows for the capitalization on huge entertainment trends into toy products for not only children but also adults as well. Licensing generally takes place in developed markets and that is why countries like the United States, China, and the United Kingdom are all among the top markets for licensing (see figure 5). With that information, companies need to recognize the potential for licensing deals in more underdeveloped countries. In countries like South Korea, nearly 50% of all toy purchases are licensed purchases compared to only 27% in the United States (Passport, 2015).

Although South Korea makes a mere $274 million total for licensed toys, they do a sell a higher percentage of licensed toys. In contrast, China and India’s toy licensing markets were among the lowest with only a mere 6-15% in 2014 even though they are some of the largest toy markets in the world (Passport, 2015).

The biggest indicator that toy licensing can lead to more profit for the toy industry can be seen by the unforeseen amount of success with the movie Frozen. The movie single handedly nearly doubled the overall sales for Disney Princess based toys (see figure 6). The movie proved that the toy licensed market is still far from saturation, and this means the toy industry will stand to profit even more in the upcoming years (Tansel, 2015).

Key Success Factor: Access to Master Licensing for Popular Franchises

Developing Markets

KEY SUCCESS FACTOR 2: ACCESS TO MASTER LICENSING FOR POPULAR FRANCHISES

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 12: P1 Final Report Deck

Key Success Factor: Access to Master Licensing for Popular Franchises

In the US, licensed toys only generated around 4.8 billion dollars in 2008 as opposed to 5.9 in 2014. This is an increase of 22% in just 6 years (Tansel, 2015). The increase in sales is supposed to steadily rise over the next 5 years with sequels to all of the highest grossing movies like Star Wars, Frozen, The Avengers, and The Lego Movie (Tansel, 2015).

Although sales for licensed toys has been a major factor for toy companies in recent years, they generally produce a lower profit margin for toy companies because of royalties fees which gives the licensor 10-15% of all profits from sales. If royalties become too high, toy companies may back away from licensing deals in the future. This also an important reason why toy companies must have a healthy balance of licensed and unlicensed toys so they are not heavily relying on licensed toys as their main source of sales (Passport, 2015).

Macroeconomic Trend – Social Media

The last trend that has been boosting licensed toy sales is the usage of social media. According to Passport’s global briefing for licensed toys, it is a “good way of creating brand loyalty which lets commercial enterprises uniquely connect with its fans” (Passport, 2015). In the case of Frozen, a Facebook page was created and generated 24.5 million “likes" in just 18 months. This, along with multiple other media platforms, is thought to be the reason behind the “Frozen-mania” explosion of sales. Companies who can use social media can boost their products value, generate buzz about their products, and ultimately profit more than companies who don’t (Passport, 2015).

KEY SUCCESS FACTOR 2: ACCESS TO MASTER LICENSING FOR POPULAR FRANCHISES

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 13: P1 Final Report Deck

Hasbro Analysis Important Acquisition

Hasbro is a unique position right now in the licensing game because of some of its major licensing contracts that they have right now. The company saw an increase in revenues for licensed toys of 5% with some of its most popular brands like Transformers and My Little Pony (Abrams, 2015). Hasbro recently saw a 60% increase in sales of toys that were connected to upcoming films in 2014 (Abrams, 2015). Along with this dramatic increase in sales, Hasbro has also just acquired one of the most successful licensing deals around today. The Disney Princess line of toys, due to the success of the popular kids movie Frozen, nearly doubled in sales in 2014, and Hasbro gained the rights over Mattel to start making products in 2016 (Passport, 2015).

Along with this huge gain, Hasbro also has the master licenses to some of the biggest movie franchises of all time including Star Wars, Transformers, and Jurassic World. These Movies, which dominated at the box office over 2014-15, are all scheduled for sequels over the next 5 years. Toy sales are expected to surge over each of the movies leading up to and following the releases. (Gensler, 2015).

Hasbro has also taken further steps to increase its presence in the media with two new entertainment initiatives. The first, along with its partner Discovery Communications, is an update to Hasbro’s television channel The Hub that was renamed Discovery Family Channel in 2014. This new channel, along with the newly created film label Allspark Pictures, were created to produce television shows based upon Hasbro’s brands. With content to start being released in 2015 on programs like Cartoon Network, Hasbro will seek to further expand its licensed merchandise depending on the popularity of these television shows (Passport, 2015).

.

Investments

KEY SUCCESS FACTOR 2: ACCESS TO MASTER LICENSING FOR POPULAR FRANCHISES

One of the most important foreign licenses that Hasbro currently acquired was the Yo-Kai Watch. In the span of just one year, Yo-Kai Watch became the largest selling brand for traditional toys and games in Japan (Passport, 2015). Originally a game launched for the Nintendo 3DS, Yo-Kai Watch’s popularity spawned a manga and anime, which led to the creation of toy products based on the Yo-Kai Watch universe. Hasbro now has the rights to bring Yo-Kai Watch into Western Markets, and the potential for huge sales could be huge for Hasbro.

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 14: P1 Final Report Deck

Mattel Analysis JAKKS Pacific Analysis

From 2013 to 2014 JAKKS Pacific saw a total net increase in sales of 27.4% for Traditional Toys and Electronics and a 28.6% increase for their Role Play, Novelties and Seasonal Products. The reason for both increases, according to MarketLine Company Profile, was “…primarily due to an increase in toddler dolls based on Disney Frozen, Star Wars figurines, and Marvel characters figurines” (Business Source Complete, 2015). Along with these sales, JAKKS also saw a 14% increase for their dress up and role-play category due to the success of Frozen. JAKKS Pacific has 70% of all its toy sales coming from licenses, a higher percentage than any other toy company (Taylor, 2015). With its powerful partners including Nickelodeon, DC Comics, and Power Rangers, JAKKS has done well with licenses in recent years.

Although licensing has paid off well for JAKKS Pacific in recent years the company must be careful. Licenses can expire or be transferred so it is important to not rely too heavily on them (Taylor, 2015). This, along with not knowing when a movie will be a dud and therefore have reduced toy sales, are important reasons to have outside revenue sources other than licenses (Taylor, 2015).

Although Mattel had massive success with the Disney Princess and Disney Frozen licenses, valued around 300 million in sales for 2014, the company may be in trouble in terms of licensing for the upcoming years (Suddath, 2015). The loss of theses important licenses, which accounted for 7.3% of total company sales, is a huge blow (Passport, 2015). The loss is significant due to the fact that 50% of all sales for licensed toys come through the Action Figure category, and Mattel has traditionally been associated with dolls. Hasbro is the leader in the action figure category because of its master licenses with the blockbuster movies Jurassic World, Transformers, and Star Wars (Gensler, 2015). After losing the largest non-action figure license (Disney Princess and Frozen) to Hasbro, Mattel must find a new way to compete in the licensed toy game.

Along with losing some its key licenses, Mattel’s largest brands Fisher-Price and Barbie saw a loss of sales of 9.9% and 16%, respectively. If Mattel wants to be a serious competitor for licensing toys in the next few years, it needs to focus on creating more value for some of their most popular products. To do this, Mattel should start looking into crossing over their more popular products, like Barbie and Hot Wheels, into major motion pictures or other media platforms (Passport, 2015).

KEY SUCCESS FACTOR: 2 ACCESS TO MASTER LICENSING FOR POPULAR FRANCHISES

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 15: P1 Final Report Deck

Key Success Factor: Innovation of Previously Successful Product Lines

Having the next best thing, in terms of products in the market, has always been of value for consumers. Many toy companies find success from the innovation of products. These new innovations drive consumers to purchase new products from the same product line. Additionally, parents, and grandparents want their children to have the toys they had as a child. Parents and grandparents will buy the innovated new version because they like the new features and wish they had them as a child. There is a connection between company revenues and the percent of the revenue that comes from products that have been around for years. When viewing 2015’s top toys, many of the products are new innovated forms of successful products. Examples of these include: the Girl Scout Cookie Deluxe, the Razor Hoover Board, and The Play All Day Elmo (Brostick.com). The history of these toy brands have been heavily analyzed. Additionally, when you look into individual companies annual reports, innovation of successful products resulting in success are found when the product has demand in the market.

“2015’s Must Buy Toys”, and History Behind Them

Easy Bake Oven:The Easy Bake Oven was founded in 1963 by Kenner, and then bought out by Hasbro (PartSelect). They sold $500,000 in the first year, and there have been 11 different models of Easy Bake Ovens. By 1997, $16 million easy bake ovens were sold. Starting in 2002, Hasbro targeted boys by making the Queasy Bake Cookerator. This created more of a neutral market and resulted in more sales in the future. In 2007, there was a recall on the ovens because of 249 reported incidents. In 2008, a year after the recall, Hasbro had almost a $93 million increase in growth, which was a 13% increase from the prior year. Hasbro reported it as “growth driven by strong performances from STAR WARS, LITTLEST PET SHOP, PLAYSKOOL, EASY BAKE OVEN, NERF, INDIANA JONES, and board games, including MONOPOLY and TRIVIAL PURSUIT,” (2014 Hasbro Annual Report). The recall cost Hasbro over $10 million in 2007. In 2011, The Easy Bake Ultimate Oven was released selling $23 million in a single year, priced at just over $40. In 2015, Hasbro launched the Girl Scout Cookie Deluxe which is being sold for over $50 per unit, and is a must buy toy.

Razor:In 2000, the company Razor began its brand with the goal of creating high tech scooters, bikes, and skateboards (Razor.com). Their first product was a Razor Scooter, which sold $5 million in 6 months and was priced under $100. In 2003, Razor innovated to the electronic scooter, and by 2010 they had sold over $35 million scooters.

Elmo:Tyco International LTD toy company launched Tickle Me Elmo in 1996 with 400,000 units distributed in the U.S. (The Toy Box). Tickle Me Elmo became one of the hottest toys for that upcoming holiday season and sold out of stores rapidly. In the span of a few weeks, Tickle Me Elmo sold over a million dolls from Black Friday through December (Steinhauer, 1996).

KEY SUCCESS FACTOR 3: INNOVATIONS OF PREVIOUSLY SUCCESSFUL PRODUCT LINES

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 16: P1 Final Report Deck

Elmo Continued

KEY SUCCESS FACTOR 3: INNOVATIONS OF PREVIOUSLY SUCCESSFUL PRODUCT LINES

During that 27 day period, 37,037 units were sold daily, 1,543 units were sold hourly, and 26 Tickle Me Elmo units were sold every minute. Due to the launch of Tickle Me Elmo in 1996, Tyco saw growth within their company of 31.3% in their EBIT from 1996-1997 (Tyco International LTD (old)). Mattel, saw the potential for Tickle Me Elmo to continually innovate and bought out Tyco in 1997. The merger went final on March 27, 1997 (Mattel Inc., Mergent Online).

Mattel’s next move was to relaunch Tickle Me Elmo in 2001, calling it the Tickle Me Elmo Surprise. Mattel saw growth of 90.8% in their EBIT as a result of this new launch of the Tickle Me Elmo Surprise from 2000 to 2001. Additionally, Mattel followed up with 44.5% growth in their EBIT from 2002-2003 (Mattel Inc., MergentOnline). With the launch of the Tickle Me Extreme Elmo (TMX Elmo) in 2006, Mattel only saw growth of 4.9% in their EBIT. This is in large part due to “the acquisition of Radica, the maker of electronic entertainment toys” for $230 million (Mattel Inc., Mergent Online). The following year, in 2007, Mattel’s EBIT grew by only 2.9%. This was a result of a recall that Mattel had on products due to lead paint (Fisher-Price Toys). Mattel then tried to relaunch the original Tickle Me Elmo in 2012. Mattel experienced a -2.6% drop as a result. Many consumers felt that the original version was a large leap down from the TMX Elmo (The Toy Box). This strategy to relaunch an original version backfired because consumers became used to the continual innovations that were made in the previous Elmos, although the Play All Day Elmo, which just came out in 2015 is ranked as a “2015 Must Buy Toy”.

This was just three examples of products, and how they have changed over time, and how they are still relevant today. It is much easier to dive into the individual companies and make conclusions. Yet, from the industry perspective, it is clear that if you innovate a product enough and people recognize the brand, people will buy. Easy Bake Oven, Razor, and Elmo were not really relevant prior to Christmas, since before 2012. They stepped up and innovated there technology to the point where they became a must buy toy!

Conclusion on the Industry

Hasbro’s Innovation

Hasbro is a company that year after year constantly innovates successful brands they have in the market. We have already given the example of the Easy Bake Oven, but there are so many more products that they have used this same strategy for, especially in recent years.

Hasbro thrives on its franchised brands, which include Magic, Transformers, My Little Pony, Monopoly, Littlest Pet Shop, Play-Doh,, and Nerf. These brands have been around for many years, some even going back to when Hasbro was first formed in the 1940’s( Crs.Hasbro.com). Challenger Brands like Furby, Playskool, and KRE-O has also seen recent success, as well as all of their partnership brands; Sesame Street, Marvel, Beyblade, and Star Wars. It has proven for Hasbro that their franchise brands have really helped them thrive in recent years. The impact of brands that have been around forever has enabled Hasbro to stay as a threat in the market as they focus

The following three brands got over $400 million each in revenue for Hasbro in 2011 (Transformers ($483), Beyblade ($477), and Nerf ($410) (2011 Hasbro Annual Report). Transformers was helped by the movie license, but what was also big for Transformers was their breaking their brand up into new categories. The challenger brands, KRE-O and PLAYSKOOL HEROES, helped the Transformers Franchise grow. KRE-O created a new construction line of Transformers products, while PLAYSKOOL HEROES was created for the younger market, with the adoption of Rescue Bots. For Beyblade, their success has come from innovating over to digital engagement through their online website. Nerf has been growing for five straight years, due to constant re-making of new products, and the demand still being there.

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 17: P1 Final Report Deck

KEY SUCCESS FACTOR 3: INNOVATIONS OF PREVIOUSLY SUCCESSFUL PRODUCT LINES

Hasbro Continued

In 2012, even though Hasbro suffered a loss in overall revenue, revenue was grown specifically in the girl category. Girls brought in $792k in revenue, which was a 7% growth (2012 Hasbro Annual Report). Boys went down 13%. Furby and My Little Pony products had huge growth, as well as Marvel Products which included the Avengers and the Amazing Spider Man.

2013In 2013, the girl category grew again to up 26%, having over $1 billion in revenue (2013 Hasbro Annual Report). The franchised brands, My Little Pony, Transformers, Nerf, and Play-Doh all saw innovation making 44% of all of Hasbro’s revenue, which is a 15% increase from the prior year. In addition, the Sesame Street partner, Furby challenger, and game Mega Brands impacted a large percent of revenue.

My Little Pony highlighted many of Hasbro’s revenue sales, with the MY LITTLE PONY EQUESTRIA GIRLS, which was Hasbro’s #1 selling toy during the week of Christmas. Nerf expanded to girls as well, creating the NERF REBELLE, which was the #1 brand in Outdoor Sports games for 2013. The preschool category grew from new product development in PLAY-DOH and TRANSFORMERS RESCUE BOTS as well as growth in SESAME STREET, highlighted by BIG HUGS ELMO.

Furby created non-English speakingmodels, which resulted in 70% of sales coming from outside the U.S. FURBY was the #1 toy in the top five European markets according to NPD. As for PLAY-DOH, 2013 was the largest year in revenue in its 60 year history, and all game products grew, except Monopoly, and Magic, but that was mostly due to global investments in digital technology.

2014In 2014, 31% of franchised brands grew, representing 55% of total revenues (2014 Hasbro Annual Report). Six of these seven franchised brands grew in 2014, which was driven by story led brands including MY LITTLE PONY and TRANSFORMERS, but also for more global access to products for NERF and PLAY-DOH products. .MY LITTLE PONY, NERF REBELLE and PLAYDOH DOHVINCI made over $1 billion in revenue and helped continue growth for girl toys. In terms of storytelling products, Hasbro has invested in entertainment digitally through TV, phones ,and tablets. From 2012 to 2014, entertainment-based toy revenues in the U.S. grew at a 7% compound annual growth rate, but non-entertainment toys have not seen noticeable changes. Magic products continued to grow for the sixth straight year, especially because of the great opportunities with emerging markets with their digital advancements. Beyblade and Furby declined in 2014 because of lack of innovation and consumer demand, but Magic helped Hasbro grow in Revenue regardless.

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 18: P1 Final Report Deck

KEY SUCCESS FACTOR 3: INNOVATIONS OF PREVIOUSLY SUCCESSFUL PRODUCT LINES

Mattel’s Innovation

Mattel has been driven by their Doll brands, Boys and Girl Brands, Fisher Price Brands, and American Girl Dolls (2014 Mattel Annual Report). Other successful product lines they continue to innovate include, Barbie, Thomas and Friends, and Hot Wheels. With new partners like Disney, Mattel has created new product lines.

BarbieMattel's Barbie is a brand that has been innovating during its 50+ year history and is constantly looking for new ways to change and innovate. There have been hundreds of different models (Barbiemedia.com).Barbie at one point was Mattel’s everything, with Barbie providing over 50% of their annual revenue in the 90’s, but now it is not even it’s own category on the map anymore. Girls wanted to live like Barbie, and would buy dolls every year. Barbie went down globally by 16% in 2014, and Brands like American Girl have taken over the girl market in toys!

American GirlMattel’s American Girl Brand of toys have been growing through innovation over the years. They value engagement with kids, and there is often an emotional relationship a kid builds with there select doll. Recently, American Girl has made dolls that represented periods of history, including war, poverty, and child labor.(Putilina, Elena) Additionally, they have made dolls that connect with kids who are less fortunate, for example ones with hearing aids, and wheelchairs. From 2010-2014, American Girl has went from $480 Million in Revenue, to $620 Million, even though Mattel hasn’t grown.(2014 Mattel Annual Report)

Fisher- PriceFisher Price is a toy brand for the preschool market of toys. They provide many educational yet fun toys that young kids can use to learn, including Elmo. Over the last five years they have been falling off the map. They have had a $400 million decrease from 2010, to 2014 in revenues. A former Mattel employee (Schnepp, Jesyca) predicts that in a couple of years the educational toys will not even exist, with tablet and app technology taking over the educational market., especially since you can get many of these services for free.

Mattel’s Innovation

Jakks Pacific is a newer company compared to most competitors in the toy industry, founded in 1995. It has been hard for Jakks to establish consistent brands to innovate since they have been founded. Jakks main line of products include electronic products that are the “Plug it in and Play Toys”, with their licensed brand, which include SpongeBob, Disney, Pacman, and more (2014 Jakks Annual Report). Jakks has product lines in the wheel, action figure, dolls, and other products. In the last two years, Jakks has suffered over $70 million in losses. They have a growth strategy, which entails expanding products, product categories, licenses, and international expansion. Most of these growth plans both Hasbro and Mattel already have established, which is why both companies have decent success in recreating already successful products.. Woo said, “Competitors like Mattel and Hasbro have managed to do much better than Jakks. They have better toys; there is no other way to say it, whether it is Barbie for Mattel or Transformers for Hasbro.”(White, Ronald) Yet, for Jakks, it is clear that a lot of their successful products are a thing of the past and they need to change direction which is why they are losing money. They have been investing a lot of money into growth, and development but have not been receiving much return on their investment. In fact, for every $100 they invested in both 2013 and 2014, they have gotten negative returns.

JAKKS Pacific Innovation

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 19: P1 Final Report Deck

Company Overview

Founded in Rhode Island in 1926 by brothers Henry and Helal Hassenfeld, Hasbro is a global toy company that designs, manufactures, and markets toys, games, interactive software, puzzles and infant products in the United States and Internationally. The company grows its overs 1,500 brands through innovative product offerings, as well as entertainment and licensing deals. The company currently employs approximately 5,200 employees (Hasbro, 2014). Additionally, Hasbro has continued a recent trend of inorganic growth and strategic alliances that could possibly continue into the future. Similarly, Hasbro identifies its product segments through it’s “brand architecture”, which includes its franchise brands, challenger brands, gaming mega brands, key partner brands, and new brands.

Challenger brands are brands that the company believes have the possibility to become franchise brands eventually over time. Examples of challenger brands include Furby, Baby Alive, Furreal Friends, and Kre-O. Similarly, gaming mega brands include the company’s games, typically board games or interactive games.

Examples of the company’s gaming mega brands include Jenga, Connect 4, Scrabble, and Twister. Lastly, the company has licensing deals with several large franchises that make up a portion of their key partner brands. Some of Hasbro’s significant key partners include Marvel and Star Wars.

Additionally, the company expects the recent 2015 release of Star Wars: The Force Awakens to produce very similar revenues as in 2005, when the franchise produced 16% of net consolidated revenues for the company, or approximately $494 million (Bryan, 2016).

Hasbro focuses its business through its brand architecture. The company markets and distributed new product offerings based off of their brand architecture. Included in the company’s brand architecture are the company’s franchise brands, challenger brands, gaming mega brands and key partner brands.

Franchise brands are typically company-owned brands which have exhibited success over a long time horizon, and are expected to do so into the future. Examples of franchise brands for Hasbro include: My Little Pony, Transformers, Nerf, Monopoly, and Play-Doh. These brands provide a significant portion of the company’s revenue and are key drivers for growth.

Company BrandsProduct Categories

The company produces products from its four main categories including: boys, games, girls, and preschool toys. Boys franchises include such products as Nerf, Transformers, G.I. Joe, and Star Wars action figures. Whereas girls products include popular brands such as Littlest Pet Shop, My Little Pony, and Easy Bake Oven.

Revenue Streams

Hasbro receives revenue from their sale of products to several large retail consumers including Walmart, Toys R Us, and Target, which represent 16%, 9%, and 8% respectively (see figure 17). Sales of products to Walmart made up nearly $684.35M in 2014 alone for Hasbro.

Figure 17HASBRO COMPANY ANALYSIS

Figure 17 (Bloomberg Terminal)

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 20: P1 Final Report Deck

Revenue Streams Continued

Similarly, as previously stated, the company markets and distributes products through it’s four categories: boys’ toys, games and puzzles, girls’ toys, and preschool toys. Boys’ toys represented nearly 35% of total revenue for Hasbro in 2014, with girls’ toys following behind at 29.5% (See figure 18) (Hasbro, 2015).

Cost Structure

Figure 17

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2010 2011 2012 2013 2014R

even

ue

(in

$U

S M

)

Hasbro Product Segment Revenue

Boys' Toys Games & Puzzles

Girls' Toys Preschool Toys

Figure 18 (Hasbro,

2015)

$0

$500

$1,000

$1,500

$2,000

2010 2011 2012 2013 2014

Co

st (

$U

S M

)

Hasbro Main Expenses

Cost of Revenue Selling & Marketing

General & Admin R&D

Other Operating Expenses

Hasbro’s largest costs include cost of revenue, general and administrative expense, and selling and marketing expense, respectively. Surprisingly however, the company spends the least amount on research and development (see figure 19). Additionally, it is noticeable that the company keeps their expense levels relatively constant. When viewing the chart to the right (figure 19), one can see there is not much volatility in the company’s expenses over the past five years.

Figure 19 (Hasbro, 2015)

Figure 18 (Hasbro, 2015)

Mergers & Acquisitions

Hasbro has seen a reasonable amount of mergers and acquisitions recently. On August 8th, 2013, the company acquired a 70% stake in Backflip Studios Inc. for USD $112M in an all-cash transaction. Backflip Studios Inc. is a mobile gaming studio with the intent to market innovative games to players of diverse gaming backgrounds. Hasbro claimed to have acquired to company to leverage their innovative intellectual properties as well as give themselves a more technological edge in the marketplace (Hasbro, 2015).

Shortly after, Hasbro sold its 10% stake in the joint venture HUB Television Networks LLC for USD $64.40M. HUB Television Networks is a provider of television broadcasting services including comedies, games, animated adventures, movies, and live-action shows in the United States.

Similarly, Hasbro sold their manufacturing locations in Ireland and Massachusetts on August 31st, 2015 to Cartamundi Turnhout NV for an undisclosed amount of cash.

Mergers & Acquisitions Continued

Finally, the company has recently been in talks with Mattel over a possible merger. However, these rumors appear to have been shot down in recent days. The merger would have allowed Hasbro and Mattel to control a large portion of the toy industry given the companies strong market capitalization respectively.

HASBRO COMPANY ANALYSIS

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 21: P1 Final Report Deck

COMPETITOR ANALYSIS: MATTEL

Mattel is the largest manufacturer of toys in the world and its products range across every different category of toys. With some of the most recognizable brands in the world including Fisher-Price, Barbie, and Hot Wheels, Mattel has been leading toy sales for years. In 2014, Mattel’s s value share for traditional toys and game was 11.7% and it net revenue for the year ending in 2014 was US $6.7 billion as opposed to its main competitor Hasbro who had a share of 8.0% and revenues of US $4.3 billion (Passport, 2015).

Although Mattel still has the largest revenue and sales in the toy industry, the company saw a significant loss in total revenue from 2013 to 2014. This loss in revenue is due to significant decreases in its sales for top brands like Barbie and Fisher-Price (Passport). While Mattel’s top brands have been losing sales, the company’s other popular doll American Girl brand grew by US $140 million from 2010-2014 (Passport, 2015).Another main source of revenues for Mattel

has been through licensed toy products. With the popularity of the movie Frozen, Mattel saw 7.3% of total revenues for 2014 coming from Disney Princess and Disney Frozen products. Unfortunately, with the loss of these important licenses to Frozen, Mattel will have to look for other ways to generate revenues (Passport, 2015). Innovation and investment into key products like Barbie and American Girl must be a priority for Mattel especially with Hasbro becoming a more dominant player in the girls toys category.

One of Mattel’s most important acquisitions of 2014 was that of Mega Brands Inc, the maker of Mega Bloks. Mega Bloks, which accounted for 6.6% of the global construction toys market, is the main competitor to LEGO which dominates the market with a 65% share. This is important as construction toys emerged as the second largest category for traditional toys and games with 10.9% and is predicted to become the largest category by 2019 with 13.2% of all sales (Passport, 2015).Another area of focus for Mattel needs to be in emerging markets. With China alone expected to increase 47% in sales of toys by 2019, and Mattel only having 1.3% of the traditional toys and games market, investment into foreign markets will be crucial in the upcoming years. With North America and Western Europe having a combined total of 72% of all of Mattel’s sales, and with recent dropping revenues in these countries, penetration of emerging markets could be the solution foo Mattel (Passport, 2015).

Mattel and Hasbro are by far the two most heavily competing companies in the toy industry. While Hasbro has been steadily increasing its market share in the past several years, Mattel saw a decrease in its total revenues. Because of weak performances by top brands and loss of key licenses in the last year, Mattel needs a different approach. Strategic entry into emerging markets, acquiring new licenses, further investment into Mega Bloks, and innovating its once dominant brands will make Mattel relevant in the future.

Competitor Analysis: Mattel

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 22: P1 Final Report Deck

COMPETITOR ANALYSIS: JAKKS PACIFIC

Competitor Analysis: JAKKS Pacific

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Jakks Pacific in the company’s own words is, “a leading multi-line, multi-brand toy company that designs, produces, markets and distributes toys and related products, pet toys, consumables and related products, electronics and related products, kids indoor and outdoor furniture, and other consumer products” (JakksPacific, 2015). Jakks Pacific was founded in 1995 and in the grand scheme of toy manufacturers, is relatively new to the market (Hasbro being founded in 1968 and Mattel being founded in 1923)(Erwina, 2015). Jakks is a toy company that designs, produces, markets and distributes toys and related products (Jakks Pacific, 2015).

Jakks is currently focusing its business on acquiring or licensing well-recognized trademarks and brand names including evergreen brands, which are properties that are less affected by fads or trends in the toy market (Jakks Pacific, 2015). Jakks Pacific holds the licenses for properties such as Nintendo, Nickelodeon, Warner Brothers, Power Rangers, Disney, Cabbage Patch Kids, Ultimate Fighting Championship, and Black & Decker (Erwina, 2015). The company also develops their own products which they market under their own trademarks and brands.

A very apparent weakness of Jakks Pacific is their reliance from the domestic, U.S. toy market. As a sum of all of Jakks’ revenue from 2012 to 2014, the United States accounts for 81% of the total net revenue for the three years (Jakks Pacific, 2015, 2014). That means for the rest of the global market, Jakks makes only 19% of Jakks’ revenue. This means that Jakks has nearly no access to emerging markets and can not benefit from growing consumer markets. It also means that JakksPacific’s revenue is at risk from fluctuations in the U.S. market.

Page 23: P1 Final Report Deck

Recommendations

RECOMMENDATIONS

1. Continued relationships with leading franchises to develop licensing deals and continued product lines

Hasbro has licensing deals with brands and partners including, Transformers, Disney, Marvel, Star Wars and many more.

Hasbro had a 5% growth in licensed sales in 2014 In 2014 55% of revenue came from franchised brands, many of which are licensed 22% increase since 2008 in licensed sales Sustaining there relationships is important, for example the damage Mattel received from the Disney

Princess License Hasbro needs to keep increasing volumes of licensed goods, because of lower profit margins due to

royalties. Hasbro should also acquire new licenses of top movie and TV shows for kids Last off, they need to keep re-creating products that have success, into new innovated models, that will

excite consumers

2. Cultural adaptability in overseas markets, specifically growth economies

48% of Hasbro’s sales come from outside the U.S and Canada segment, including Europe, Latin America, and Asia Pacific from 2012-2014.

Hasbro needs to gain further understanding of the tastes of different regions They need to avoid struggles that Mattel had with Barbie in China, bur use the success in India as an

example to follow They shouldn’t rush into the emerging markets too much, but a slow year by year growth is necessary Hasbro should re-create brands to suit the interests of other markets

3. Stronger penetration into markets in Asia-Pacific, specifically in India, where the company has thought about exiting altogether

Asia Pacific represents over 30% of the market value Expected population, and youth population is expected Hasbro needs to increase there media presence in Asia Pacific to increase brand awareness Hasbro should also create toys that go with there society’s taste. Using Bollywood in India, and

Education towards China are examples of successful taste. Hasbro should increase Transformers lines in Asia Pacific as a whole, mostly because of the Asia- Pacific

interests in robot movies. This has been measured by the $318 million Middle Kingdom box office revenues for the newest transformers movie. Additionally, the success of Pacific Rim, which is a robot movie and didn’t do well in the U.S, but very well there. Perhaps even making a new robot brand geared towards the taste of India, China, and the rest of Asia- Pacific specifically by country

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 24: P1 Final Report Deck

CONCLUSION

Conclusion

Through our analysis of the toy industry we have concluded that in order to be successful a company must have the ability to access emerging markets, especially in the Asia-Pacific region, have the access to master licensing for popular franchises, and the ability to innovate previously successful product lines.

The Asia-Pacific region, specifically focusing on China and India, is the fastest growing region at CAGR of 8% and a forecasted growth of CAGR 6%. The region, which is 30.6% of the total global industry, is the most important factor for the toy industry because successful penetration of this area will yield the highest amount of profit for toy companies. Hasbro saw an increase of 8.8% revenues in the Asia-Pacific region from 2013-2014, and with continued investment into this emerging market, Hasbro can become a more dominant force on the global scale

Licensed toys have steadily been generating more and more revenue over the last decade. Having the master license to blockbuster franchises like Frozen, Star Wars, and Transformers have made toy companies sales skyrocket in recent years. Hasbro stands to benefit a lot off of these franchises as they are set to have upcoming films in the future and with the master licenses they will be the leader in licensed toy sales.

Innovation of previously successful product lines is important because once popular brands at one time carry value and this can be carried over from generation to generation. Like the Easy Bake Oven or Tickle Me Elmo, re-launches of these same products have given toy companies numerous waves of successful sales and revenues. Continuing to innovate on old toys helps create value for these toys while also keeping them culturally relevant.

Lastly, we recommend that Hasbro continues to develop and maintain relationships with licensors, adapt in growing overseas economies, and to gain more market penetration in the Asia Pacific region. If Hasbro successfully does all these things, they will continue to see growth within the industry.

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 25: P1 Final Report Deck

Industry Overview

Toys and games are a $92.2 billion global industry fueled by strong demographics and economic activity. Particularly, over the last half decade, the industry has experienced strong growth equivalent to a compounded annual growth rate (CAGR) of 4.4% (see figure 1). This strong growth is expected to continue into the future, increasing 25.8% from end-of-year 2014 levels, equivalent to a CAGR of 4.7%. This would bring the global market value to $115.9 billion. The industry maintains a strong geographical presence, as Europe and the Asia Pacific represent 31.3 % and 30.6%, respectively, of the industry’s global market value (Ebscohost, 2015).

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2010 2011 2012 2013 2014

$-

$20,000.00

$40,000.00

$60,000.00

$80,000.00

$100,000.00

% G

row

th

$ m

illio

n

Global Toys & Games Market Value

$ million % Growth

Industry Trend – Licensing & Sustainability

The global shift towards environmental sustainability has affected toy manufacturers greatly, and the Toy Industry Association is working with companies to help reduce waste, recycle, and create cleaner energy sources. Contrastingly, such rules and regulations that govern toy companies can negatively affect profit by increasing a corporation’s operating costs and potential legal fees due to lawsuits regarding environmental hazards (Toy Industry Association, 2013).

Several trends within the industry give insight towards possibilities for the future. Several large manufacturers have begun capitalizing on major entertainment such as “Star Wars” and “The Avengers” movies. Such films have created licensing opportunities for companies within the toy industry (Lipson, 2015). Licensing deals with powerhouses like Lucasfilm and Disney for specialized toys are likely to continue given their profitability potential, especially for companies such as Mattel and Hasbro (see figure 3). Many manufacturers create dolls resembling characters in these previously noted films. Such products have added to the recent rise in toy doll sales, which now represent 13.2% (see figure 2) of the total global market value for the industry (Ebscohost, 2015).

$0

$2,000

$4,000

$6,000

$8,000

Mattel Hasbro Jakks PacificRev

enu

e ($

U.S

. Mill

ion

)

Worldwide Revenue of Major Toy Companies -2014

17.1%

10.5%

16.0%

7.5%13.2%

12.3%

23.5%

Toy Industry Global Revenue by Product Segment

Activity Toys

Games and Puzzles

Infant/Pre-schooltoys

Plush

Dolls

Outdoor andSports Toys

Other

Industry Trend – Parental Figures

It is important to remember that companies within the toy industry must market to parents as well, seeing as though they are the ones buying the product (Phillips, 2015). From this, companies have begun marketing to parents through social media, as well as company websites. Parents in the United States in 2001 were the leading toy buyer in the world, spending over $300 on toys per year per kid. Although in 2011, the U.S ranks as the ninth highest spender, with Switzerland, Japan, and the U.K all leading with over $400 per kid. It isn’t that the U.S has been spending less, it is that other countries have been spending more. Part of this also is because 50-60% of toys in the U.S are bought during the holiday season, therefore parents are only comfortable spending a certain amount on Christmas yearly, and won’t really change that habit unless they have a severe change in income (Passport).

Figure 1 (Euromonitor, 2015)

Figure 2 (Euromonitor, 2015)

Figure 3

APPENDIX A

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 26: P1 Final Report Deck

-1

0

1

2

3

4

5

6

2000 2003 2006 2009 2012 2015 2018 2021

% C

han

ge

World Production of OilMacroeconomic Trend - Oil

The industry is heavily affected by several economic factors. Oil prices are largely relevant to the industry currently due to the recently volatility seen in the price for the commodity. Once trading near $109 per barrel towards the end of 2013, crude oil has lost nearly three quarters of its value since then, trading as low as $27.56 on January 20th, 2016. From this recent volatility, the cost of plastic is expected to drop 9.2% (IBIS, 2015).

Regarding the future outlook for the commodity, analysts believe that the world production for oil will continue rising through the year 2021 (IBIS, 2015). However, as many company’s have been negatively impacted by the oversupply and cheap prices for oil, some domestic US companies could halt their production, which could lead to only moderate rises in global production (see figure 4).

Macroeconomic Trend – CCI

Furthermore, the Consumer Confidence Index (CCI), a measure of consumer optimism towards the future of the US economy, has seen relatively volatile swings in recent years. Especially during the early 2000s with the tech bubble and between 2007-2009 during the financial crisis (IBISWorld Business Environment Report, 2016).

Recently however, the index has shown strong growth, consistently sitting in the range of 75-80, as opposed to 2008 where it saw over a 45% drop from the previous year and fell to 57.85 (IBISWorld Business Environment Report, 2016). Moreover, analysts are predicting this index to continue its strong growth into the future as the economy continues recovering. As more jobs are added to the labor force, it is likely to see the index increase (see figure 5).

Macroeconomic Trend – Disposable Income

Per capita disposable income, a measure of an individual’s ability to purchase goods or services, has also seen a reasonable amount of volatility in recent years. Similar to the CCI, disposable income in the US saw large swings during the financial meltdown (see figure 6), however reached a low point towards the end of 2013 after experiencing a -2.1% change off of weak unemployment numbers (IBIS, 2016). However, analysts remain optimistic regarding future performance for the index, citing an increased labor force combined with improved stock and housing value as reasons for continued strength (IBIS, 2016).

-50

-40

-30

-20

-10

0

10

20

% C

han

ge

Consumer Confidence Index – United States

Figure 4 (IBIS, 2016)

Figure 5 (IBIS, 2016)

-3

-2

-1

0

1

2

3

4

% C

han

ge

Per Capita Disposable Income – United States

Figure 6 (IBIS, 2016)

APPENDIX A

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 27: P1 Final Report Deck

PESTLE

Political: What is going on politically affects the growth of the toy industry. The Civil War, WWII, and 9/11 all resulted in shortage of labor and the depression of society. Toy products are increasing their political awareness as the world becomes more connected. American Girl launched a new doll to address the issue of poverty. It encloses a written message discussing the issue of poverty (Tansel).Toys marketed towards young boys were typically blue and red in color, as products such as trucks were predominately featured, and toys marketed towards girl were pink in color, predominantly kitchen sets and dolls.

Economic: The state of the economy,, and the prices of crude oil affects the toy industry. For example, during the economic recession in 2008, the industry growth declined. Crude oil has lost nearly three quarters of its value since then, trading as low as $27.56 on January 20th, 2016. From this recent volatility, the cost of plastic is expected to drop 9.2% (IBISWorld Business Environment Report, 2015). Therefore it will cost companies less to manufacture toys, and their profit margin will increase per toy.

Social: Social values can determine where people decide to value in toys. Outdoor toys are the largest product segment for the global toy market, representing 17.1% of the market’s total value (Global Toys & Games). As concerns regarding global obesity continue to rise, with 18% of children worldwide now considered to be obese, parents are engaging their children in more physical activity (Outdoor Toys & Games). Trends drive the industry, with product lifecycles being short. Licensing has taken over the industry, as popular movies like Frozen, and Star Wars have taken over the industry. they recognize.

Technology: A key factor for toy companies is to constantly innovate products, to keep demand for a product line high. Most successful toy products are either newly licensed products, innovations or licensed products, or new high tech products. With competitors like video games, computers, and tablets, toy companies have been trying to come up with new high tech products to interest consumers. Voice recognition, sensors, and robotics are all recent innovations for the traditional toys market. Similarly, companies are beginning to produce children’s versions of popular adult technology such as dvd players and cameras. Also, there is a trend within the industry within recent years towards computer automated design.

Legal: Federal legislation such as the Consumer Product Safety Improvement Act (CPSIA), the Toxic Substances andControl Act (TSCA), and the Children’s Online Privacy Protection Act (COPPA) (Toy Industry Association, Inc), are calling for more regulation and restrictions amongst companies and manufacturers. The CPSIA and the TSCA are both laws that were designed to protect consumers, especially children, from dangerous and harmful products. In 2014 there were 19 recalls of toys in the U.S. (Kids in Danger). For toy manufactures, understanding laws and safety regulations will save money in the long run and help support a healthy consumer opinion of the company

Environmental: Currently, the industry is moving towards several changes to create more environmentally products and business practices. Some changes companies within the toy industry are currently making include eliminating polyvinyl chloride, reducing greenhouse gas emissions, curbing water consumption, and ending deforestation. Green Toys, has made a recycling truck to try and inspire recycling among kids. The toy itself is made of recycled materials and is aimed to teach kids about recycling (Tansel).

APPENDIX B

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 28: P1 Final Report Deck

Porters 5 Forces

APPENDIX C

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 29: P1 Final Report Deck

Hasbro Business Model

Key Partners Sesame Street, Marvel, Star Wars,

Transformers, Disney Third Party Manufacturers in China Suppliers: Camei Industrial, Early Light

Industrial and Lucky Bell Plastic Factory Licensee Factories

Licenses given to companies outside the toy industry to produce Hasbro goods

Value Propositions Licensed toys

Products that Hasbro makes that have licensed material

Franchised toys Products that contain material

around franchised brands such as: My Little Pony or Easy Bake Oven

Customer Relations Hasbro focuses on wholesale retailers

such as Walmart, Toys “R” Us, and Target For the consumers that buy their

products from these retailers, Hasbro has recall, toy and game safety, toy and game instructions, and recall information on their website

Channels Walmart, Toys “R” Us, and Target

In 2014 in the U.S. and Canada, 59% of the net revenue came from these three retailers

In 2014 globally, these three customers make up 16%, 9%, and 8% (33%) of the consolidated net revenues

Television ads Online Retailers

Key Activities Licensing

Made up of lifestyle licensing, digital gaming, television and movie entertainment operations

Innovations of Existing Products Holiday Sales

65% of all revenues in 2014 came within the second half of the fiscal year, mainly due to retailers stocking up for the holidays

Manufacturing Nearly all products in 2014 were

produced in third party facilities in primarily china, as well as two facilities in Massachusetts and Ireland

Key Resources Plastic and Paper/cardboard

These materials are available, but the prices may change rapidly

Usually, Hasbro enters into yearlong agreements at the beginning of the fiscal year. These negotiations may be revisited throughout the year if significant price fluctuations occur

Working Capital Financed through operations and short

term borrowing when needed Paint

Customer Segments U.S., Canada

Focus on promoting brands through innovation and reinvention

This segment increased by 1% from 2013 to 2014

Slowest growing customer segment International

Focus on sales to wholesale retailers to most of Europe, Latin and South America, and Asia Pacific

There was an 8% increase in this segment from 2013-2014

Licensing and Entertainment Promoting lifestyle brands through

licensing of intellectual properties to companies that do not compete directly with Hasbro in the toy industry

This segment increased 15% from 2013 to 2014 and is the fastest growing customer segment

APPENDIX D

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 30: P1 Final Report Deck

Hasbro Business Model (Cont.)

Cost Structure Cost of sales was the highest cost incurred in

2014 This made up 39.7% of the 2014 net

revenue Selling, distribution, and administration was

the second highest cost incurred in 2014 This made up 20.9% of the 2014 net

revenue Advertising was the third highest cost in

2014 This made up 9.8% of the 2014 net

revenue These costs are the most important to

Hasbro’s bottom line All costs listed below have remained stable

in the past three years and are expected to remain relatively stable in the future

Revenue Streams

U.S. and Canada The net revenue for this segment in 2014

increased by 1% The operating profit for this segment in

2014 increased by 7% This segment is the slowest growing of

the three main that Hasbro identifies in their 10k

International The net revenue for this segment

increased by 8% as a whole in 2014 with Europe, Latin America, and Asia Pacific as the main markets

Europe at 6% growth increase is by far the largest international market

Latin America at 14% growth increase is the second largest international market

Asia Pacific at 10% follows behind Latin America with potential for rapid expansion

Entertainment and Licensing Entertainment and licensing is the

smallest revenue stream but is growing the fastest at 15%

Lifestyle licensing, digital gaming, and a full years payment from Backflip were major contributors

Net Revenues and Operating Profit From 2012-2014 by Revenue Segment

Hasbro’s Operating Expenses as Percentages of their Net revenue

APPENDIX D

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 31: P1 Final Report Deck

Mattel/JAKKS Business Model

APPENDIX E

Key Partners Mattel

Third party manufacturers in Canada, China, Indonesia, Malaysia, Mexico, and Thailand

Disney Enterprises, Inc. Viacom International, Inc.

(Nickelodeon) WWE Wrestling

JAKKS Third party manufacturers

overseas Mcdonalds, Disney Frozen,

and Power Rangers

Channels Mattel/JAKKSWalmart, Toys “R” Us,

and Target are the three biggest customers and made up 35% of global net sales for Mattel and 47.4% of global net sales in 2014 Advertising is used at

various levels and peak during the holiday season

Customer Segments Mattel

North American segment International segment American Girl segment

JAKKS North American segment International segment

Revenue Streams Mattel

Gross sales for were down 6% across the company in 2014

Many of the top selling brands such as Fisher Price that dropped 17% in gross sales, had a tough year due to

JAKKS Operating income was up almost 100%

after being in the negatives in the past two years

Key Activities Mattel/JAKKS Holiday Sales

Licensing Manufacturing Advertising

Key Resources Mattel/JAKKS

Paint Electronic parts Printed fabrics Plush Plastic

Value Propositions Mattel

Licenses for WWE, Disney and Nickelodeon

Franchises such as Barbie and American Girl Doll

JAKKS Licenses such as Power Rangers,

Disney Frozen, and Dora the Explorer

Customer Relations Mattel/Jakks

Focus sales on major retail customers like Walmart, Toys “R” Us, and Target

Product safety information and other product information is available on each company website

Cost Structure Mattel/JAKKS

Most of each companies costs are from production, distribution, and the royalty fees for the franchised products

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 32: P1 Final Report Deck

APPENDIX F

Hasbro Financial Information

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 33: P1 Final Report Deck

Mattel Financial Information

APPENDIX F

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 34: P1 Final Report Deck

APPENDIX F

JAKKS Pacific Financial Information

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Page 35: P1 Final Report Deck

APPENDIX G

Financial Ratios/Analysis

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

When viewing the companies financial statements, it is easy to see that Hasbro has relatively stronger financials than their competitors. Particularly, when looking at the ROE, Hasbro has the strongest ROE as of the latest filing. When using the DuPont Approach, Hasbro’s relatively stronger ROE could be attributed to the company’s stronger profit margin and equity multiplier relative to Mattel and JAKKS Pacific.

Our team expects Hasbro to remain stable financially and perhaps even improve over the coming years. This is due in large part to the company’s increased efficiency in countries such as China as well as licensing deals for entertainment such as Disney Princesses.

Lastly, Hasbro and Mattel do not experience much volatility in their financials, however JAKKS Pacific, the smallest and youngest of the three companies, experiences large swings. Specifically regarding JAKKS’s ROE and margins, the company was in the negatives until this most recent fiscal year. This could possibly be attributed to the youth of the company and their lack of exposure to overseas markets as well as licensed products. Their company was almost most directly affected by domestic economic concerns due to their large exposure to US markets.

Page 36: P1 Final Report Deck

APPENDIX H

KSF Weightings

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Weight HAS Hasbro Weight

Total

MAT Mattel Weighted

Total

JAK JAKKSPacific

Weighted Total

Penetrationof Emerging Consumer Markets in Asia-Pacific

China 30% 8 2.4 6 1.8 3 .9

India 15% 4 .6 9 1.35 2 .3

Access to Master

Licensing for Popular

Franchises

Connection to Top

Franchises

14% 9 1.26 6 .84 7 .98

Connection to Major

Upcoming Movies

14% 8 1.12 4 .56 7 .98

Avg. PM/Avg. Royalties as % of

Expenses

7% 6 .42 9 .63 2 .14

Innovation of Previously Successful

Product Lines

Length of

Brands

13% 9.5 1.24 6 .78 3 .39

Amt. Spent on

R&D

7% 7 .49 9 .63 4 .28

Weighted Total 7.53 6.59 3.97

Page 37: P1 Final Report Deck

REFERENCES

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Abrams, R. (2015, February 09). My Little Pony and Transformers Toys Help Lift Hasbro Sales, and Its Profit Jumps.Retrieved February 14, 2016, from http://www.nytimes.com/2015/02/10/business/hasbrorevenue-

rises-5-bolstered-by-strong-toy-sales.html?_r=0

Bloomberg Terminal

Boumphrey, Sarah. (2014, November 14).10 Facts about India. Retrieved February 14, 2016 fromhttp://www.portal.euromonitor.com/.

Business Source Complete. (2015). JAKKS Pacific, Inc. Retrieved from ebscohost.com

Daujotas, G., (2013). Future Markets for Toys: Demographic Outlook. Retrieved from http://www.portal.euromonitor.com.proxy.library.ohiou.edu/portal/analysis/blogindex.

Ebscohost. (2015, November). Global Toys & Games industry profile. Retrieved from Business SourceComplete database.

Euromonitor. (2012, August 21). Special Report: The World’s Youngest Populations. Retrieved February 10, 2016from http://portal.euromonitor.com/.

Euromonitor. (n.d.). Revenue of the Mattel company by brand from 2010 to 2014*. In Statista - The Statistics Portal. Retrieved January 31st, 2016, from

Euromonitor International, (2015). Global Traditional Toys and Games Market in 2015. Retrieved from http://www.portal.euromonitor.com.proxy.library.ohiou.edu/portal/analysis/blogindex.

Fisher-Price Toys with Lead Paint Hazard Recall. Mattel.com. Retrieved from http://service.mattel.com/us/recall/39054_IVR.aspfrom http://www.euromonitor.com

Gensler, L. (2015, September). The Force is With Them: Three Companies That Will Make Big Money From StarWars. Retrieved from Forbes.

Golovko, J. (2014, August). Toy sales in china are well-insulated against a potential GDP growth slowdown.Retrieved February 14, 2016, from http://www.portal.euromonitor.com/.

Hasbro. (2015, February 26). 10-K, Annual Report. Retrieved February 2, 2016 from Bloomberg terminal.http://www.euromonitor.com

Hasbro Inc., (2014). Form 10-K 2014. Retrieved from Hoover’s database.

Hasbro Inc., (2013). Form 10-K 2013. Retrieved from Hoover’s database.

IBIS. (2015, October). Price of Plastic Materials and Resin. Retrieved from http://www.ibisworld.com/.

IBIS. (2016, February). World production of oil. Retrieved from http://www.ibisworld.com

IBIS. (2016, January). Consumer Confidence Index. Retrieved on February 14, 2016 fromhttp://www.ibisworld.com/.

Page 38: P1 Final Report Deck

REFERENCES

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

IBIS. (2016, January). Per capita disposable income. Retrieved on February 14, 2016 fromhttp://www.ibisworld.com/

Jafaar, A. (2016, January 26). China's DMG Inks Deal With Hasbro To Launch First 'Transformers' Live ActionAttraction. Retrieved February 14, 2016, from http://deadline.com/2016/01/transformers-chinadmg-to-launch-first-live-action-attraction-1201690447/

JAKKS Pacific, (2015). Form 10-K 2015. Retrieved from Hoover’s database.

JAKKS Pacific, (2014). Form 10-K 2014. Retrieved from Hoover’s database.

JAKKS Pacific, (2013). Form 10-K 2013. Retrieved from Hoover’s database.

Mattel Inc. Mergent Online. Retrieved from http://www.mergentonline.com/companynews.php?pagetype=historic&compnumber=5302

Mattel Inc., (2015). Form 10-K 2015. Retrieved from Hoover’s database.

Mattel Inc., (2014). Form 10-K 2014. Retrieved from Hoover’s database.Mattel Inc., (2013). Form 10-K 2013. Retrieved from Hoover’s database.

Middleton, M. (2015, September 15). WWE Working With Jakks Pacific Again - WrestlingInc.com. RetrievedFebruary 14, 2016, from http://www.wrestlinginc.com/wi/news/2015/0915/600672/wwe-working

-with-jakks-pacific-again/

NPD Group (2015). From the U.S. To Australia and in Between, Licensed Toy Sales are Rising. Retrieved from The NPD Group.

Passport. (2014, August). Global Licensing Continues to Stimulate Traditional Toys and Games. Retrieved from http://www.euromonitor.com

Passport. (2015, August). Hasbro Inc. Toys and Games (World). Retrieved from http://www/euromonitor.com

Passport. (2015, August). Hasbro Inc. Toys and Games (World). Retrieved from http://www/euromonitor.com

Passport. (2015, July). Mattel Inc. in Toys and Games (World). Retrieved from http://www.euromonitor.com

Passport. (2015, September). Key Global and Regional Trends Shaping Toy Licensing. Retrieved from http://www.euromonitor.com

Patrick. (2015, November).2016’s Most Popular Toys for Kids This Year. Retrieved January 28th, 2016, from http://www.brostrick.com/tech/best-toys-for-2015-2016-christmas-season/

Porter, R. (2014, May). High Penetration of Licensing Can Lead to a Decline in Traditional Toys and Games Categories. Retrieved from http://www.euromonitor.com

Page 39: P1 Final Report Deck

REFERENCES

Introduction Market Analysis

Key Success Factors

HasbroAnalysis

Competitor Analysis

Recommendations Conclusion Appendix

Porter, Robert. (2014, May). Should Hasbro Pull Out of India? Retrieved February 14, 2016, fromhttp://www.portal.euromonitor.com/.

Putilina, Elena. (2015, September).Getting Engaged With American Girl. Retrieved February 1st, 2016, from http://www.innovationexcellence.com/blog/2015/09/09/getting-engaged-with-american-girl/

Spiderbook. (2015). Mattel Partners. Retrieved February 3rd, 2016, http://spiderbook.com/mattel-partners.html

Steinhauer, Jennifer (December 7, 1996). A Strange Twist in Christmas Gifts. Business Day. The New York Times. Retrieved from http://www.nytimes.com/1996/12/07/business/a-strange-twist-in-christmas-gifts.html

Suddath, C. (2015, December). The 500$ Million Battle Over Disney’s Princesses. Retrieved from Bloomberg Business

Tansel, U. (2015, August). Toy Licensing: Which Markets to Target. Retrieved from http://www.euromonitor.com

Tansel, U. (2015). Licensing – A Key Parameter Driving Global Toys Sales. Retrieved on February 8th, 2015. Fromhttp://www.portal.euromonitor.com.proxy.library.ohiou.edu/portal/analysis/tab

Tansel, U. (2015). Hong Kong Toys & Games/Licensing Fair Reaffirms Asia’s Key Position in Toys Licensing. Retrieved on February 8th, 2015. From http://www.portal.euromonitor.com.proxy.library.ohiou.edu/portal/analysis/tab

Taylor, C. (2015, November). What a Holiday Toy Boom Will Mean for Investors. Retrieved from Fortune.

Tyco International LTD (old). Company Financials. Mergent Online. Retrieved from http://www.mergentonline.com/companyfinancials.php?pagetype=asreported&compnumber=8434&period=Annuals&dataarea=PL&range=50&currency=AsRep&scale=AsRep&Submit=Refresh

Wang, H. H. (2012, October 24). Why China Stumbled in China and How She Could Re-invent Herself. RetrievedFebruary 14, 2016, from http://www.forbes.com/sites/helenwang/2012/10/24/why-

barbiestumbled-in-china-and-how-she-could-re-invent-herself/#204f38c6300b

White, Ronald. (2013, September ).Jakks Pacific is playing catch-up with toy making rivals. Retrieved February 7th, 2016 from http://articles.latimes.com/2013/sep/15/business/la-fi-stock-spotlight-jakks-20130916

(October 10, 2013). Tickle Me Elmo (Tyco, Fisher Price, Playsckool and Mattel). The Toy Box.Retrieved from http://thetoybox1138.blogspot.com/2013/10/tickle-me-elmo-tyco-fisher-price.html