Deduced of its annual report for 2013, the company Hasbro is in a discerning situation. Revenues and earnings fell for the last three years (see Exhibit 1) and the company started to repurchase stock at the end of 2013[1]. Three important challenges Hasbro has to face will be introduced and solutions suggested. The first paragraph will focus on the problems of toy and game companies with its buyers. After that Hasbro’s increasing costs will be reviewed and the vast competition in the toy and game market will be outlined. Lastly suggestions to overcome those problems will be presented. Regarding the North-American market, Hasbro depends on three big buyers producing 61%[1] of its net revenue: Wal-Mart, Toys “R” Us and Target. Those retailers tend to use their control over their suppliers in order to reduce purchase prices and increase margin. Hasbro already suffers from buyers that order their inventory last minute. Especially in preparation of the holiday season orders for immediate delivery and late payments from the buyers lead to short-term borrowings of Hasbro[1]. This dependency makes Hasbro hold very high levels of inventory (see Exhibit 2), resulting in high carrying costs and very high risks, since in the fast moving toy market unsold goods are for the most part obsolete inventory[2]. This situation results in a inventory turnover ratio of only 5.032 for Hasbro (see Exhibit 3). Its biggest competitor Mattel had a inventory turnover ratio of 5.786 in 2013 (see Exhibit
After the acquisition of EB Games, GameStop rose as the leading video game retailer in its industry. In an effort to sustain their position, GameStop will have to tackle several technological and sociocultural issues that have arisen from its competitive environment. The strategic objective we wish to accomplish in this analysis is to formulate a viable strategy that will continue GameStop’s growth in the industry to remain as the go to video gaming store for the video gaming enthusiast.
We observed non-viable cost patterns due to high customization and low unit orders by retailers for specialty branded doll #106, hence the management should look at better sales & marketing strategy to take bulk orders
The competitive rivalry in the toy industry is intense. Organizations try to sell through their own retailers and online instead of solely through other retailers. Flexibility and responsiveness to the market are
Hasbro Inc. owns the very successful brand, G.I. Joe that is an icon in the toy industry. G.I. Joe has been a dominate factor in the market for toys since its launch in 1964. The brand has been able to stand the test of time and its creators have successfully preserved the brand throughout the years. Hasbro’s challenge is to market the G.I. Joe brand in such a way, so that it can become a mega brand like its competitor Mattel with its mega brand Barbie. The toy market has volatile sales depending upon trends created by consumer demand. The market is also very seasonal in which sales are typically best during the Christmas shopping season. The target customer for Hasbro Inc. is a shrinking market due to
In order to get toys in its stores by October, Specialty places one-time orders with its manufacturers in June or July of each year. Demand for children’s toys can be highly volatile. If a new toy catches on, a sense of shortage in the marketplace often increases the demand to high levels and large profits can be realized. However, new toys can also flop,
The purpose of this memo is to document and evaluate the business risks faced by Toy Central Corporation (TCC), as well as audit risks, accounting issues identified, and management assertions affected.
The video game industry is the economic sector involved with the development, marketing and sale of video and computer games. It includes video game consoles, game software, handheld devices, mobile games and online games. The video gaming industry has been growing exponentially in recent years with Sony, Microsoft and Nintendo competing for the higher profits in the market. This essay will analyze each of the five forces acting on the industry: threat of new entrants, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and the competitive rivalry among existing firms. Then it will be determined if the video game industry is still an
Walt Disney Company for eighty years has captured the attentions of millions of people around the world, offering family entertainment at theme parks, resorts, recreations, movies, TV shows, radio programming, and memorabilia (David, 2009). Today, Walt Disney possesses four main business segments: Disney Consumer products, Studio Entertainment, Parks and Resorts, and Media Networks. Each of Disney's business units increased profits apart from its interactive division, which was recently restructured (Garrahan, 2011). By combining Disney's long history with the commitment to quality, Disney Consumer Products has had a large and steady presence in the toy marketplace (Anonymous, 2010). Studio entertainment has been somewhat of
In analyzing ratios, we recognized an improvement in both return on equity and return on asset ratios if we adopt the level monthly production.
1. From early 1990s to 2004, the Lego Group, a long successful toymaker with a world-renowned brand, fell into the edge of bankruptcy. Compared with the highest revenue in 1999, the revenue in 2014 decreased by 35.6% while the net profit was negative, seven times less than that in 1999, the lowest in the past ten years. Its net profit margin and ROE were also the lowest. The gross margin and inventory turnover were all lower than its competitors. The strategic moves in the two main periods “growth period that wasn’t” (1993-1998) and the “fix that wasn’t” (1999-2004) lead to its poor performance.
Through studying the entire retail toy industry, we have been able to understand the complexity of the industry in which Toys "R" Us operates. Upon completion of the analysis, we realized that the industry is growing stably,
Hasbro conducts business within the Toy, Game and Doll Manufacturing industry. They have strong, brand portfolio that they utilize in a wide variety of entertainment mediums. Hasbro categorizes their brands into four categories which they call their brand architecture: franchise, partner, gaming mega, and challenger brands. Their franchise brands are owned by them and they currently make most of their revenue from these brands. However, their partner brands are quickly becoming more important to their business as a majority the company’s growth recently has come from new ones. In addition to the brand architecture, they report the financial performance of their brands by grouping them into four different categories: boys, girls, games, and preschool. Boys and games has been a majority of their business mostly, but that is beginning to change recently as their girl brands are beginning to grow. (10K and Hasbro quarterly reports).Hasbro is a global company that has sales around the world. They report their sales in four segments: US/ Canada, International, Entertainment and Licensing, and Global Operations. The International segment is further segmented into Europe, Latin America, and Asia/Pacific, where they directly operate (10K). Within these segments and brands, it is difficult to identify which toys and games are their core items because they have almost 2,700 individual products that they currently sell in addition to their non-toy items, digital games,
Retailing the right product at the right season, like outdoor games in the spring, is important to maximize sales. The continual display and presentation of new toys, games and crafts will attract customers and generate higher sales. Looking into expanding operations and product lines towards video games and other growth segments (e.g. Building sets and action figures). Building up a well-designed online marketing channel can promote efficiency and cost savings. Expanding the international market to avoid the intense competition in the U.S. Retail Toy Industry. Closing underperforming stores to improve liquidity through the expertise of Vornado Realty Trust and reinvest the money back into the operation.
Other forms of value adding could be the dealer purchasing the product in a bulk order from the wholesaler or the producer in order to pay less variable costs. This method of value adding could prove risky in a market such as this with the variability of annual sales. Given this method of value adding the potential also arises for increased costs if the product isn’t sold. As an example if a manager were to preorder and have 10 John Deere 1590 direct drill air seeders delivered, the firm might be able to pay less for a bulk order but will incur increased storage costs and faces the risk of having to reduce the price to sell whatever stock is leftover at the release of the next years model in order to, not only make more room at the storage site but also to recover the expenditure that came with overinvesting in a product that didn’t sell.
This paper researched the fact that the Toys “R” Us Company was displaying a weakness in financial related issues due to the lack of proper strategic planning. This made the company susceptible to many threats in the industry’s competitive environment. The research has shown that its main competitors Walmart, Target, and Amazon are functioning successfully in the industry while Toys R Us heads for bankruptcy. This research emphasizes the fact that Toys R Us has not taken steps to strategize its operations properly which resulted in a loss of revenue and opportunities in their environment. If the company does not take steps to better its strategic planning, the company will not