Grand and Toy Case Study

Grand and Toys strategy is to achieve sales of one billion Canadian dollars, maintain a strong brand to be the clear leader in the Canadian commercial segment and to operate about 85 commercially focused stores clustered in major markets. Grand & Toy also wants to achieve their marketing objectives by offering 8000 products through 90 locations and web ordering system. Performance objectives against the strategic plan to achieve its vision included:

  • Growing sales
  • Reducing costs and increasing productivity
  • Increasing organizational capability and capacity
  • Ensuring a strong strategic position

Ecommerce is an important part of this as well they expected to direct 50 percent of its orders through its site within three years.

By using one platform for all its customer needs this would translate into:

  • One point of entry for customers
  • Online customer segmentation through user identification
  • Integration with other stakeholders
  • Customers ordering from multiple channels
  • New features including credit purchasing, account automation, etc.

Increasing number of global competitors in Canada is reducing their market share in office product industry. Competitors use better information technology to increase sales. Customized service and products are becoming very important for business and customers. Competitors use more distribution channels and better technology to support their sales in Canada and in other countries. Staples their biggest competitor offers discounted prices to attract new customers. Grand & Toy’s customers might affect by this pricing strategy and might switch over to Staples. In order to attract more customers Grand & Toy needs better competitive pricing strategy. Grand and Toy should compete with Staples and other competitors such as Office Depot which has one third of its sales in business clients and now with it having Viking office products its selling internationally through catalogue sales giving them an advantage over Grand and Toy, Office Maxs exclusive rights to gateway computers so it had an advantage if someone was looking for that type of computer.

Non traditional competitors pose the threat of also taking up Grand and Toys share of the market. They may come in a threat of Department store such as Wal mart, offering computers and office supplies at lower prices than Grand and Toy and shopping at these type of stores the customer has convience of doing there other shopping as well, there are also now stores online where products can be shipped globally where customers can shop from home and compare prices which is again a convenience not offered by Grand and Toy. These are threats that Grand and Toy need to consider when they are planning their marketing strategies and promotions.

Grand and Toy does have a sustainable market because there overall sales had grown nearly 35% from 1998 to 2000. In the same period saes had grown from $480 million Canadian to $645 million, while profits rose at an even greater rate. With G& T moving forward with its Ecommerce strategy which they expect to see fifty percent of its sales through in the next three years and always knowing they may have to change it in the future they are able to face traditional and non traditional competitors.

Grand & Toy need to design well develop marketing plan to execute above strategies. Computer, Software and technological goods market expected to grow more than 20 per cent. Grand & Toy should aware of this growth and they should expand technological goods capacity. They must offer good deal to government agencies, educational institutions, small and big businesses to convince them to purchase products from their stores. Grand & Toy need to improve their web site for online buyer. Customer should find product and service easily by visiting Grand & Toys’ web site. Customer should login, update their information, search products, compare products specification, compare price, buy products, and check the status of the delivery easier than other competitor’s web site.

Expand ordering channels: Grand and Toy is the market leader in office product industry in Canada. They should be a leader based on number of retailer, commercial and stockroom stores. They should expand the capacity of the catalogue mail and phone orders. Grand & Toy should customize service and product. Each customer needs and wants different. If Grand & Toy’s satisfies this need they will make customer happy about the service. Therefore Customer Retention, Frequency and Purchase amount will increase.

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Etch-A-Sketch by the Ohio Art Company

The history of the famed Etch-A-Sketch began when a man by the name of Arthur Granjean invented a magic screen in his garage which he called “L’ Ecran Magique” in the late 1950’s. Mr. Granjean took the liberty of taking his drawing of the toy to the International Toy Fair in Nuremburg, Germany in 1959. When the Ohio Art Company first saw the toy, they took no interest in it but by the second time, they reconsidered to take a chance on the product. Soon enough, the Etch A Sketch® was introduced to the market as the new name for he L’Ecran Magique .

The new toy became the most popular drawing toy in the industry. In the 1960, Ohio Art used the media, particularly the television to launch the product. Overwhelmed by the consumer’s incredible response, the company continued manufacturing Etch-A-Sketch until Christmas Eve 1960. The popularity of the new toy reached the West Coast where people all over California bought Etch A Sketch® on Christmas Eve and had them for Christmas. The profile of the phenomenal toy has had minor changes over the years.

The people were so in to the Etch-A Sketch mania that they wanted to stick to its original bright red frames version that was so popular and took no interest with the hot pink and blue frames that were offered by the Ohio Art Company during the 1970’s. There were minor alterations on the print on the frame, but the company made sure to retain the exact inner workings. A mixture of aluminum powder and plastic beads coats the reverse side of the toy. The horizontal and vertical rods are controlled by the left and right knobs, moving the stylus where the two meet.

The stylus scrapes the scrapes the screen when it moves leaving the line you see on the screen.. Although the knobs adopted a new shape with a different edge for easier handling and turning, the manufacturers made sure to apply only a slight change. Etch a Sketch® gained its ppularity since it has actually influenced a generation of artists who have made a mark in history when they were featured on the press through magazines, newspapers, and TV. The Etch A Sketch® has a club which was formed in 1978.

The club regularly releases a newsletter featuring various artists with commendable skills in drawing. Its membership overwhelmingly reached up to 2000 people with ages ranging from two years old up to 82 years old. Business Challenge When Etch-A-Sketch was invented in 1960, it became such a phenomenal hit that more than 100 million of the drawing toys with that familiar red rectangular have been sold. Its manufacturer, the Ohio Art Company became famous as it was known to be the best producer of the esteemed drawing toy of all time.

However, the year 1990, proved to be a troublesome year for the company. They were primarily confronted with slow-moving toy sales, where the Ohio Art Company lost money for a period of two years. Because of the financial instability that the company was experiencing, it decided to to outsource production of the Etch-A-Sketch toys to Kin Ki Industrial, a leading Chinese toy maker, as a strategy to counter its financial losses. However, this move meant laying off 100 U. S. workers.

Employees did not expect the closure of the Etch-A-Sketch line. Productions of other toy lines were already moved to China and the employees were pretty much aware that Etch-A-Sketch was also bound to transfer its production and leave more people unemployed. For a company which did majority of its manufacturing in the town of Bryan in Ohio, leving its homebase was such a tough and drastic decision. According to William Killgallon, the CEO of the Ohio Art Company, the employees who made the product “were like family”.

The financial decision was necessary. They exhausted all efforts and tried to do it gradually, product by product. The whole thing had indeed been an emotional torture both for the company and the employees. Network Solutions The company was pressured to keep the cost of Etch-A-Sketch under $10. They needed to get its costs down or they would lose more money. Through their strategic move of transferring the production to China, unionized workers making $1,500 a month were replaced by Chinese factory workers who made $75 a month.

Killgallon also realized that through the process, the main savings came not only from lower wages, but from lower overhead costs for maintenance, plant, payroll, , and electricity. Kin Ki was chosen by the Ohio Art as manufacturer for Etch-A-Sketch since it had been making Etch-A-Sketch toys that were pocket-sized for almost a decade and always delivered them on cost.

References:

Bellis, M. (n. d. ). Etch-A-Sketch. Retrieved April 15, 2009, http://inventors. about. com/library/inventors/bletchasketch. htm

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The business trend in the toy industry

The current trend in the toy industry is changing quite rapidly and the industry is growing at a robust rate. The purpose of this memo is to explain the changing trends of the industry and how this industry has progressed through different phases. New trends which include cyber concept, linking the toy industry with the gaming industry, and certain advertising trends of this industry are discussed in this memo.

The linkage of toys with the internet is considered to be the rising trend of today’s world and this trend actually initiated from the Asian region. The demands of toys are increasing and children are more attracted by the electronic components of toys and they love to buy those toys which are technologically enriched. Children of the current era are technologically savvy which is why they are more attracted to toys whose software is available on the internet. The internet link of these toys allows children to keep in touch with the toys and they can share their feelings about that toy on the internet.

The manufactures of the toys and the major players of the industry are not increasing their product lines and they are focusing on their basic toys. Similarly, green and organic toys are expanding in the toy industry and children are buying more and more green toys. Repackaging of toys is quite common in this industry and manufacturers are lowering their costs by repackaging the toys. The financial strength of the industry is dipping down and the bigger players in the market are suffering because of lower sales in the industry. The toy industry is also focusing on the special needs of customers and the growth of the special needs community is noticed by the toy industry. The parents of these children would feel a sigh of relief if the marketers are going to market the toys for the special children. Major players in the industry are introducing budget toys for children because of the recent economic crises. These budget toys are strongly linked with the classic toys which include remote-controlled cars and toy guns. Similarly, movie-oriented toys are increasing in the current scenario, and toys like iron man, superman, and batman are loved by children. The producers of these products develop these toys with a proper license and they are properly marketed to the respective target market. Children are very much attracted by the action figures and the sales of these movie toys are increasing. The sales of this industry depicts that the trends of toys are decreasing, the sales figures of 2007 were $22.3 billion and it declined to $21.7 billion in 2008 (TIA, 2009).

This topic of business trend in the toy industry is quite wide and varied and it’s quite an open topic. The topic is open to research and the industry trends depict that due to the recent economic recession people are not buying expensive toys and manufactures are only developing expensive toys for a specific target market. However, children are shifting towards classic toys.

If any one of you has any specific recommendations regarding this topic please let me know I will appreciate this. The topic is open for feedback.

References

  1. Retrieved April 29, 2009, from info.hktdc.com: http://info.hktdc.com/tdcnews/0001/00011601.htm
  2. Retrieved April 29, 2009, from www.toyassociation.org: http://www.toyassociation.org/AM/Template.cfm Section=Industry_Statistics&TEMPLATE=/CM/HTMLDisplay.cfm&CONTENTID=3887

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When Was Barbie Given Bendable Legs

Barbie – An American Icon Icons like Barbie recognized for their popularity and effects on society. Barbie is a subject of obsession all over the world. Collectors, consumers and even some designers become enthralled in the Barbie world. Designers create special designs to fit a specific trend of the high fashion runways. Collectors all over the world collect and spend amazing amounts of money to have the original Barbie in their collection.The consumers have made Barbie a true icon in American culture.

The Barbie doll was invented in 1959 by Ruth Handler (co-founder of Mattel), whose own daughter was called Barbara. The Barbie doll was introduced to the world at the American Toy Fair in New York City. Barbie’s job was teenage fashion doll. In 1965, Barbie first had bendable legs, and eyes that open and shut. In 1967, a Twist ‘N Turn Barbie was released that had a moveable body that twisted at the waist. The best-selling Barbie doll ever was 1992 Totally Hair Barbie, with hair from the top of her head to her toes.The first Barbie was sold for $3.

Additional clothing based on the latest runway trends from Paris were sold, costing from $1 to $5. In the first year (1959), 300,000 Barbie dolls were sold. Today, a mint condition “#1” (1959 Barbie doll) can fetch as much as $27,450. To date, over 70 fashion designers have made clothes for Mattel, using over 105 million yards of fabric. Barbie has had a huge impact on the fashion industry for over fifty years. . (Mary Bellis, About.com Guide)

Hatfield 2 This is what the proportions of a life-size Barbie doll would look likeImage from (thefrisky. com) There has been some controversy over Barbie Doll’s figure when it was realized that if Barbie was a real person her measurements would be an impossible 36-18-38. Barbie’s “real” measurements are 5 inches (bust), 3 ? inches (waist), 5 3/16 inches (hips). Her weight is 7 ? ounces, and her height is 11. 5 inches tall. These measurements seem unattainable to me as a woman living in a world of super-sized portions of food at every corner. Nevertheless, Mattel has also responded to concerns about Barbie’s body.

In 1997 Barbie’s body mold was redesigned and given a wider waist, which would make her “better suited to contemporary fashion designs. ”(The Examiner. com) I can clearly remember my first Barbie. I was five years old. It was Christmas day and I was very excited to own my very own Barbie. Along with the doll I also received a dream house, a pink corvette, swimming pool, and even a Ken doll to make the “Barbie world” complete. I was instantly obsessed with the idea and the make believe life I imagined for my dolls.

Not once did I ever think of these dolls as role models or as having a certain body image that I must follow n order to be accepted in society.Unfortunately, a lot of mothers and women believe that the doll has made young women obsessive about their size and looks. Overall, this American Icon has influenced our culture in a way Mattel probably never could have ever imagined. Barbie is a doll that creates and follows fashion trends just as the world does. This iconic doll has changed her clothing, hairstyles, automobiles, friends, houses and pets. Barbie is one doll that never goes out of style and has made fashion dolls a great pastime for collectors and children young and old.

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SWOT Analysis of Toys R Us Inc

Diverse range of toys and baby amusement products. Toys R Us can offer many product-choices among varying customers references. Global presence. Being a world-based company means it can offer a wide range of products to customers overseas.

* Huge distribution network. Toys R Us makes use of their foreign connections in order to deliver their products efficiently to their branches worldwide.

* Company website which also serves as an online shopping site. Toys R Us, Inc. Holds a strong portfolio of e-commerce sites, further advancing its position as the leading dedicated toy and Juvenile products retailer. These well-established online destinations provide shoppers with a broad selection of distinctive merchandise.

High safety product standards. Toys R Us has set a safety standards which exceeds the law requirement. Thus, they are able to establish confidence among parents that they are buying products not hazardous to their kids.

* Company own the biggest toy store which is located in Time Square, New York. Since its grand opening in November 2001, Toys R Us Times Square has occupied a special position in the heart of New York City as one of the Big Apple’s top tourist attractions, welcoming hundreds of thousands of kids each year.

* Joint venture with other known brands.

Toys R Us had been able to strengthen its global monomer by collaborating with successful companies like in Japan and China.

* Well-chosen and well-trained employees. In addition to offering a wide assortment of toy and baby merchandise, a key element to maintaining the company’s authority position is staffing and stores with knowledgeable and well-trained employees. Store teams are integral in creating memorable shopping experiences for customers and helping families nationwide find the right products for the children in their lives. Higher product price compared to competitors.

Mostly low income earner cannot afford to buy Toys R Us’ products. Products they sale is not exclusive for the company. Any small-formed businesses can create and sell products to customers with much lower prices.

* Seasonal sales. Toys R Us’ aggregate sales are mostly affected by seasonal events like Christmas holidays.

* Limited market range. Toys R Us set target market only for ages 13 and below.

* Decreasing sales of video games and other related software. Toys R Us’ sales decrease relatively because of many competitors offering almost the same products Technological advances.

Because of many emerging technologies nowadays, Soot Analysis By enameling will able to satisfy customers demand.

* Venturing in developing countries. The availability of developing countries to venture with creates an opportunity for Toys “R” Us for expansion and this will be their advantage in the future.

* Target market expansion. The opportunities arising considering those young adults ages 14-16 in their target market.

* Increase service level. To foster career advancement and skill development, employees are encouraged to take advantage of a variety of learning opportunities.

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Creative Toys Company

The role of social system in the case was highly important because in the organization, The Creative Toys Company, all the people in it and their relationships to one another are mutually interdependent. This was evident in the case wherein in the transportation department, the eight members divided their work among themselves in order produce […]

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Mattel Toy Recalls

Mattel, Inc. is the largest toy company in the world. This largest toy company in the world was founded by Harold Matson and Elliot Handler in 1945, as they started to produce picture frames. However it was Elliott Handler who had a visionary of a side business in dollhouse furniture out of the converted garage (Mattel). As a top company, the primary activities of Mattel are to design, manufacture, and market the toys. As the company’s sales growing slowly, Mattel started to produce varieties of high quality products and became one of the of the best toy companies around the nation at the time.

The major move by Mattel was when it sponsored Walt Disney’s Mickey Mouse Club television show that put the company in spotlight and company’s sales increased significantly. That sponsorship of Mickey Mouse Club helped the company to attract a very high proportion of young potential customers. In 1959, the wife of Elliot Handler, Ruth Handler came up with an outstanding idea that changed Mattel forever. As Ruth Handler watched her daughter playing with paper dolls, she suggested the idea of making three dimensional dolls to her husband.

Elliott loved the idea of making such dolls and introduced the doll with a full wardrobe and accessories to the market. The doll initially named after the nick name of daughter of Elliott and Ruth. The introduction of the new doll was a huge success for Mattel and immediately the doll became the major product line of Mattel (Finding). With the success of Barbie doll, Mattel was named a public company and ranked soon as one of the largest industrial companies in the United States. In 1968, Mattel have introduced another consumer-loved product called Hot Wheels. This was second biggest hit since the company introduced Barbie.

Hot Wheels immediately labeled Mattel as the largest toy company in the world. As the toy industry was changing and new competitors were coming in, Mattel saw a stiff competition rising in the mid 1980s. Like other companies in the toy industry, Mattel faced a stiff from the electronic entertainment. The electronic entertainment introduced many electronical videos games in which children switched to at an increasing young age from the traditional entertainment. To cope up with the competition and attract the new generation, Mattel decided to expand into technology by producing lectronic gaming products. Mattel failed to attract a high proportion of consumers, and were unable to fit in with the new strategy as there were new competitors producing electronic games with lower prices. Later, Mattel decided to focus on producing the core products of the company. This strategy to refocus on the core products and makeover some of the core products was a great success for Mattel. For example, after doing makeover, in 1988 to 1993, the sales of Barbie doll increased to $ 1 Billion dollars from $430 Million dollars (Sansweet).

As Mattel is known for making most of its own products in their owned manufacturing facilities, the company owned and operated 10 manufacturing plants worldwide. Half of the manufacturing plants are located in China (Jiangyong). Since Mattel started its business, the company produced its products mostly in developing countries to take the advantage of cheap manufacturing costs. Unlike many toy companies, Mattel produced 70% to 80% of its products in their own manufacturing facilities. The company believed that making products in-house will be more stable and high efficient products.

According to Mattel, in-house facilities have high standard safety measures and high quality control that produce high-quality products. Besides making most of its products in Mattel’s own manufacturing facilities, some of its production was outsourced to China and other developing countries in order to focus on domestic strategic efforts such as Research and Development and Marketing. However these outsourcing products were not efficient as products were made in in-house facilities. These outsourcing products were less stable and not as efficient.

Many times these products needs to be recalled as they do not meet the safety standards and tend to hurt the image of a well-known organization like Mattel. Therefore, Mattel’s strategy was to focus on making most of its core products at their own manufacturing facilities, and outsource the products that are less popular and non-core. Due to outsourcing to other developing countries, the toy industry faced many hardships. The products that are made in developing countries that had substandard quality control were recalled many times due to the safety reasons.

Mattel too faced a stiff pressure from the government and consumers for the products that were not safe and stable which are made in manufacturing facilities in China. Recently, Mattel recalled several of its products because they were not safe for consumers. Recalling millions of products, not only reduced the total revenues of the company, as well as it hurt the company’s image at the same time. Mattel had been always trusted by its consumers for making providing its consumers high-quality products and stable products.

The recalls that are connected with lead paint made by Mattel’s lont-time manufacturers. These manufacturers are responsible for not having strong safety regulations and not complying with the quality control within the organization. The manufacturer, Early Light Industrial, was responsible for the second major recall of about 1 million toys. The manufacturer had more than 200 employees to inspect if the contractors were complying with safety regulations, but none of them were stationed on-site to inspect the products. Failure to inspect the products left the company with rooms or errors.

In order to understand a company’s situation, financial statements are very important. Financial statements allow you to see the company’s performance, financial condition, and financial trend. By examining financial statements of Mattel, we can clearly foresee where the company is heading financially. Looking at ROA and PM, both ROA and PM increasing year to year from 2005 to 2007 which is very good news for Mattel. Despite the recalls, Mattel’s total revenue is still increasing year to year. These analyses clearly show that Mattel is performing very well in making profits.

Some of the key financial highlights of Mattel recorded below: Selected Financial Highlights of Mattel, Inc. : YEAR 2007 2006 2005 Net Sales 5,970. 09 5,650. 16 5179. 02 Cost of Sales 3,192. 79 3,038. 36 2,806. 15 Net Income 599. 9 492. 93 417. 02 Total Assets 4805. 46 4955. 88 4372. 31 ROA (%) 12. 4 9. 5 9. 53 PM (%) 10. 4 8. 72 8. 05 Firm Strategy One of the Mattel’s primary strength is that the company is the leading brand named leading toy company in the toy industry. Ever since Mattel started its business, the company always produced high-quality and consumer-loved products. Mattel has plenty of name brands products that are very popular among the customers. Mattel’s brand name recognition stared in 1959 when the company first introduced the famous doll, Barbie.

Other products, Hot Wheels, Fisher Price, and NASCAR also are very popular products and behind the huge success of Mattel. In order to continue making the high-quality products Mattel’s main focus is to keep doing what the company is doing and find out what the customers’ want and desire by research and development. Mattel’s main goal is to maximize production efficiency while minimizing the risks, controlling expenses, and maintaining flexibility. In order to focus on that strategy, Mattel has decided to use the third party manufacturers to produce its non-core products.

Slowly, Mattel has been moving its manufacturing to countries like China, Japan, Indonesia, Thailand, and many other developing countries. As Mattel has contracts with thousand of vendors in those countries, the company does not need to rely on a single manufacturer. However, this strategy may not convey quality assurance of the products and also raise concerns over safety regulations. Due to substandard safety measures revolving toy designing and manufacturing in China, Mattel has been facing some tough challenges.

During 2007, Mattel has made five recalls of over 21 million toys are made in China due to the excessive lead paints on toys and having loose magnets that normally impose danger to the children while playing with them. These loose magnets and lead paint can easily be consumed by the children. These recent recalls started to hurt the image of the company and as well as the reputations of the company. Sales in some areas started declining, however, the total revenues of the company is increasing than the previous year.

Possible Options As we have detected causes of the problems, we need to come up with alternative solutions to solve the problems. There are some alternative strategies Mattel can apply in order to stay on the of the toy industry. Possible alternatives include rebuilding strategy, and manufacturing in United States. Option 1: Rebuilding Strategy: Mattel should focus on rebuilding strategy. The company needs to rebuild the consumer trust in toys, rebuild the trust of the industry, and as well as the trust of China.

Accountability and responsibility required strongly to repair the image. Denial and accusations will just hurt the image of the company more as it could bring counter attack by the accused. Option 2: Manufacturing in United States: Mattel may decide to move its manufacturing back to United States as they are facing many problems in foreign countries. However, this strategy will be really costly to Mattel financially. Also, it will harm the relationship with foreign countries. Therefore, rebuilding strategy is strongly recommended. Recommendations and Implementations

During the crisis management, accountability and responsibility is very important to maintain the reputations and sales of the company. Admit the wrongdoing, instead of throwing blame on China. Blaming China will just hurt the relationship with the Government China. Mattel, Inc. is also required to change its strategy to address the concerns in design, manufacturing, quality control, and safety assurance of the products. In order to implement the rebuilding strategy, Mattel needs to take some of the important steps. The company needs to be open and truthful.

Confess to wrongdoing is a great tool to start re-establishing the trust. The company also needs to focus on communicating with the consumers to address their needs. For better standard safety measures, Mattel should hire a third party for sudden inspections of the products in manufacturing facilities. The company should maintain its current strategy and continue outsourcing in China where it could focus on expanding product lines. The company may also incorporate with established manufacturing facilities where they have standard quality control and strong safety measures.

Most importantly, the company needs to focus on more modifying the safety operations in facilities by inspecting standards of production and examining the materials that are supplied by third-parties. October 26, 2010 Robert D. Katz Ishaque Mohammed Ibrahim Mattel’s Case Memo Executive Summary: California-based Mattel, Inc. is well-known to the world for making the high-quality and brand-name recognized products. Recently, the Mattel Company recalled millions of products that are mostly made in China for the safety concerns that raised many questions about the sustainability of the company’s products.

Due to these recent recalls, now Mattel is totally aware of the perils of manufacturing in developing countries, where the safety measures and working environment were totally unacceptable. The purpose of this case analysis is to understand the problems that occurred and how Mattel will come to solutions to solve them. This case analysis will review the problems Mattel is facing, analyze firm strategy by using SWOT, and recommend alternative strategies to solve the problems and best way for Mattel to proceed successfully in the future.

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