Background: History, Products and Profitability indicators
The Toy Industry of traditional toys has been around since the fourteenth century and has evolved into a multi-billion dollar industry. The Toy Industry big contenders are Mattel (U.S), Hasbro (U.S), and LEGO (Denmark). Products of this industry include: action figure/accessories/role play, building sets, dolls, games/puzzles, outdoor and sport toys, infant/preschool, and all other toys.
The early toy industry began in Nuremberg and Groeden Valley, Germany in the fourteenth century where craftsmen carved dolls and animal figures out of wood for youth children to play with. Today, action/accessories/role play figures and dolls are bringing in enormous revenue for companies in the
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with her husband (History.com). Barbie is a globally iconic adult style doll and still brings in billions in gross sales. In reference to the “chart 1’ Barbie brought in $1.2753 billion in 2012 compared to $1.2028 billion in 2013. “The 12% decrease in Barbie gross sales reflected product innovation not being strong enough to drive growth, increased competition within the doll category, along with lower effectiveness of in-store, commercial, and promotional activities” (Mattel).
In 1998 Mattel acquired the well-established company American Girl Dolls. “American Girl bucked retail trends, expanding its brick-and-mortar footprint while still achieving incredibly high online sales numbers—the highest in the brand’s history. New store economics are strong, nearly doubling the revenue in a given market and bringing in between 50-60% new customers to the brand” (Mattel Toys). American Girl Dolls is in the top 4 doll franchises in the world.
During the 18th century tin army toys for boys emerged along with miniature kitchen sets for girls. The toys during the 18th century were very gender based; masculine toys for boys, while the girls had toys to encourage household duties and nurturing. Peddlers sold these toys to middle class families. Today, army and kitchen toys are still very prevalent in the market. In 1963, the most sophisticated kitchen toy set appeared in the
3. Barbie dolls came into existence in 1959. During that time all dolls were infant dolls and Ruth Handler creator of the barbie dolls saw that “children will enjoy giving the Barbie adult roles” because it is different than playing with infant dolls. It has evolved over time, due to the improving technology, the dolls these days look very realistic. The social impact it has made is that it gives children a chance to play with more advanced toys and gives them the ability to admire Barbie’s achievements through her various career
Further, certain toys seem to suggest that boys are valued higher in society than girls (Starr, 1999). The information appears to show that there may be more stereotyping with regard to toys offered to boys. It seems that most parents choose more masculine and gender-neutral toys for the boys such as, soldier action figures, wrestling kits, and karate fighters (Starr, 1999). These types of toys encourage competitive and aggressive behaviors, however; they are also more constructive, conductive to handling, and more reality based (Starr, 1999).
Mattel, Inc has the vision of being the world’s premier toy brand, for the present and the future. It currently sells products in over 150 nations. The company was founded in 1945 by Harold Matson and Elliot Handler. It has gone to be 30,000 employees strong working in 43 countries. Mattel, Inc includes a number of toy brands such as Barbie, Fisher Price, Hot Wheels, American Girl, Tyco, and others. In 2008, the company was recognized by FORTUNE magazine as one of the “100 Best Companies to Work For”.
The 1990s, however, have been characterized by increased competition and an erosion of the company's market share. This has been reflected in the stock's performance, which has been lackluster during the early and mid-1990s. Toys R Us began to struggle with fierce competition. The discounters had made it a price game which Toys R Us could not compete in. Other large toy chains have suffered even more. FAO Schwartz Inc. and KB Toys Inc. have filed for Chapter 11 bankruptcy protection, both citing competition from discounters. Toys R US came to the realization that it may have to sell off its toy business.
Today, I can walk into almost any toy store in America and expect to get bombarded by plastic figures with extreme bodies. But if I were to play this same scenario out in previous time periods, I would find it difficult to encounter the same types of products. This is because children’s toy trends have shifted in America throughout the 20th century. I recently came across an article from TIME magazine that reflects this idea. In it, author Allie Townsend, managing editor of Facebook, ranks 100 of the most influential American toys since the 1920’s.25 I moved through the list from the beginning, and rarely did I come across a toy resembling a doll or action figure until decades later. The toys that populated the store shelves during the first
second largest toy market. A “category killer” that enjoyed phenomenal success in the United States
Mattel is a global toy company that has been around since 1949. They are the company that introduced Barbie and Hot Wheels to the world as well as many others toys. Mattel has license agreements with Walt Disney and Nickelodeon. In
In fact, the Barbie doll was so popular that three years after her release in 1959 Mattel was still filling orders from her first year (Long 17).
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,
LEGO, like most companies in the toy industry are fighting to stay profitable in this
In the past, the toy business was just an annex of the publishing industry. Little effort was invested in toys which were not even mentioned strategic plans. Now the toy industry is the second-highest profit maker in Marvel, generating over $20 billion in sales in 2003. The toy business is very promising in the future. However its percentage in revenue will still remain stable or slightly decrease, just as publishing will do, because licensing has such a strong possibility for growth. In addition, while the toy industry competition is too fierce to permit further achievements.
This report is about the situational analysis of the Toy R US Company. This company is currently facing some drop in sales, possible reasons and potential solutions are provided in this report. All the detailed analysis are given here. Report has suggested that company lost its main perspective which it famous at the first point. This is main outcome of the report. There are many other reasons as well which are causing the decline of the company. There is a lot of room for improvement which can be tackled, implementation plan is also given in this report along with the possible and potential full recommendations. So lets’ start with the report.
Others felt that they should consider Indonesia as a way to take advantage of low labor costs and very attractive exchange rates. Mattel currently operated a plant in Indonesia that produced Barbie® dolls. Montalto had to decide whether Mattel should go forward with the new China plant, build a plant in Malaysia or Indonesia, expand one of the existing facilities, or outsource the surplus die-cast volume through VOA. Company Background Based in California, Mattel, Inc designed, manufactured, and marketed a broad variety of toy products. The company’s core product lines included Barbie fashion dolls, Hot Wheels die- cast toy vehicles, Cabbage Patch Kids, Fisher-Price preschool toys, and Disney toys. Most of these toys were made overseas, primarily in southeast Asia. Mattel had wholly owned manufacturing facilities in China, Malaysia, Indonesia, Mexico, and Italy. Mattel was founded in 1944 by Elliot and Ruth Handler. Neither Elliot nor Ruth had much business experience or capital, but they both had dreams. The post World War II demographics of a huge baby boom plus a virtually toyless marketplace provided a unique opportunity to gain a place in a growing toy market. Mattel’s first products, simple picture frames and doll house furniture, met with mixed success. The first really big hit was a music box. By partnering with another toy inventor, they developed a music box that could be
For opportunities, Barbie is a worldwide brand. So there is an opportunity for the company to use that reputation to increase its market share.
Conclusion: The entry of Toys “R” Us would shake the traditional Japanese toy business, however the cracks appearing in the retail structure points towards the need for transformation in the Japanese market. Hence Toys “R” Us potentially is a good prospect for the Japanese markets.