OPERATION STRATEGY FOR TOYS INDUSTRY

Operation Strategy for Toys Industry

Table of Contents

Introduction1

Discussion2

Corporate Objectives2

Marketing Objectives2

PEST Analysis: OGEL3

Legal or the Political Aspects3

Economic Aspects4

Socio-Cultural Aspects4

Technological Aspects5

Porter Model5

Threat of Substitute Product6

Bargaining Power of Buyers6

Potential New Entrants7

Bargaining Power of Suppliers7

Barriers to Entry and Exit7

Rivalry among Existing Competitors8

SWOT Analysis8

Strength8

Weaknesses9

Opportunities9

Threats9

BCG Matrix10

Ansoff Grid: Ogel11

Off shoring in China11

Strong and clear focus on educational, creative and developmental toys12

The rise of “kidults”15

Implementation Challenges16

Strategies for Local Companies in Competing Against Global Challengers17

Conclusion19

References20

Operation Strategy for Toys Industry

Introduction

The toy sector encompasses a large number of companies whose main activity is oriented increasingly toward a high-design, quality and pedagogical value in order to compete in international markets where price is the decisive factor," submits the final report on the toy industry. According to the report, the high seasonality of sales, the gradual penetration of foreign toys in the Spanish market, the globalization of markets and the low birth rate are the main features define the market (Pacek & Thorniley 2010: pp. 19-34).

The traditional toys and games category expanded 4% in current value terms in United Kingdom in 2010. Expansion was supported by the recovering economy and increased retail spending, as well as by the strong performance of scientific/educational toys, games and puzzles as well as dressing-up and role-play toys. The video games category saw strong growth in 2010 as well, boosted by the introduction of Kinect and Move in Q4, which also prompted many families to buy consoles (Pacek & Thorniley 2010: pp. 19-34).

More children aged eight or over have already started to play video games instead of traditional toys and games. This trend is the most important factor influencing the overall market performance of toy industry in U.K. in 2010. More manufacturers are investing more resources in developing electronic components in baby and pre-school toys. In addition, an increasing number of manufacturers are cooperating with video game companies to diversify their portfolios. For example, Monopoly and other Hasbro games also have been released on Apple's iPad and iPhone (Therrel 2003: pp. 13-15).

Discussion

Innovation and creativity are the keys to winning share among sophisticated and tech-aware consumers. To arouse interest among children, manufacturers are developing products which combine technology with traditional toys and games. For example, Hasbro worked with RealD to develop Transformers Cine-Mask 3D, which combines Bumblebee and Optimus Prime masks with passive 3D glasses. Interactive is another important factor for the competition. For example, smart toys are popular among children. In Hong Kong, VTech and LeapFrog enjoyed particular success in interactive toys. Toy Quest offers video books, which encourage families to learn together through reading and sharing stories (Walsh 2005: pp. 67-95).

Corporate Objectives

We aim to achieve the following objectives through the establishment of the company Ogel.

To enhance the image of the brand as a leading toy company that fulfils the needs of children.

To promote awareness within the target market that the brand provides quality products those are safest for children.

To launch a new retail outlet with which the company can serve its customers and meet their ...