ba 352 ch9 openended toy industry
TRANSCRIPT
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Lorelay Corona
Angela Van Strander
Matthew Vital
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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.
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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
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Major Players
1. Mattel
2. Hasbro
3. Bandai
4. Lego
5. Tiger Electronics
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#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
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#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
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#3. Bandai
3rd largest toy manufacturerBased in Japan
Popular video games forNintendoSegaPlayStationGame BoyWiiXbox
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#4. Lego
1934, Danish toymakerOle Kirk Christiansen
○ 1st line of wooden toys, then produced plastic bricks (legos)
Popular culture phenomenaStar WarsHarry Potter
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#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
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Minor Players
Fisher-Price Leap Frog Playskool
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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
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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
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Playskool
American company; headquarters in Pawtucket, RISubsidiary of Hasbro
Educational toys & games for childrenMr. PotatoPlay-DohTonkaTinker ToysLincoln LogsWeeblesGloworms
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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
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The Toy Industry within OM:Supply Chain Structure
Manufacturer
Distributor
Warehouse
Retailer
Consumer
GOODS
$$$
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The Toy Industry within OM: Push System
(def) Produce goods in advance of customer demand using a forecast of sales […]Replenish shelves as needed
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The Toy Industry within OM:Value Chain Model
Management
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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
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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
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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
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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
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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
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Differences between US & International Companies
US Traditional Toy Markets
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Differences between US & International Companies International Traditional Toy Markets
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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
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Any Questions???