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Toy And Game Market Will Be Introduced And Solutions

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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

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