This study of Jurassic Toys is to examine the major trends in order to remain competitive. The study is set up around four points: 1. using the model of PESTEL, and identifying the central variables in the toy industry worldwide. 2. Perform an analysis of the 5 competitive forces of the toy industry and analysis of the key success factors 3. Define the following terms: vertical integration, capacity investment. Identify strategic groups in the presence in the global toys (make based on the concepts mentioned above). 4. Define the concept of scenarios (strategy).
By pressing on the analysis conducted during the three preceding questions, one can explain the failure of the strategy of Smoby and suggest an alternative strategy. It is first noted that this is a market where competition is important because the top 10 global manufacturers control 40% of the total market leader with Mattel, Hasbro and then followed by the Japanese, company Bandai Namco.
However, many competitors are registered in China, including former subcontractors of Hong Kong such as V Tech, Playmates etc. The growing weight of China in the world toy industry is significant with three out of four toys made in China. The market for video games and electronic games has boomed in recent years. But the classic children's games remain on the market and continue to sell even if one observes that the market tends to stagnate, the increases in volume are being offset by price erosion.
Budgetary expenditure on communication and advertising is very high. This parameter is very important because it is the only way for a brand to be referenced in the purchasing. It is necessary that the brand is known and for that it must go through the communications media, particularly audio visual since the first public it addresses is children. The TV should be at least 10% of sales of a brand.
This is something that has become indispensable, especially among major U.S. film studios. The objective is to promote sales of products while receiving the widest possible target. Indeed, creating toys based on movie characters, brands such as Mattel and Hasbro are making turnovers extremely interesting.From the distributors this trend is also beneficial because they take less risk by selling products supported media (TV spots).
Finally, it is impossible to enter the market for the toy industry if the product is not established regulatory standards. China still has work to do at this level.
This analysis will determine what forces that shape the competitive dynamics in the toy industry. This threat is stronger when barriers to entry are low. The toy market clears this financial barriers (economies of scale, capital intensity and cost of transfer), trade (access to distribution channels, reputation) and barriers to skills and resources (technology, experience).
Strategic groups within the same industry are pursuing the same or similar strategies. To identify strategic groups should take into account several criteria. In this matter, vertical integration and investment capacity were both selected criteria.
Vertical integration is an acquisition strategy that allows a company to acquire control of part or all of the different stages of production.
Tags: Jurassic Toys, analysis, marketing strategy
[...] It will be difficult for a new entrant to offer competitive prices. • Capital intensity: The capital or the investment that is needed to penetrate the market is very important, and includes the fixed costs (labor) and costs related to advertising and the purchase of licenses which are very expensive. • Access to distribution channels: there are no agreements of “exclusivity" between manufacturers and distributors so the distribution channels are not locked. However, in France to be referenced in a supermarket, the brand must be "known" and that is why investing in a high advertising budget is crucial. [...]
[...] The scenario gives a fundamental strategy for a company. Source: http://www.lesechos.fr/formations/manag_info/articles/article_10_6.htm Failed strategy of Smoby Smoby's strategy was a partial success. On the one hand, it was able to meet the competitive threat by investing in its capacity for innovation through the annual renewal of 25% to 35% of its range, but on the other, it failed to move to the use of another material. Finally, the acquisition of Berchet deepened its financial deficit. However, the exit strategy was well scripted. [...]
[...] To survive against the Asians, the Jura had to rely on the reactivity and the continuous renewal of product ranges. Moreover, they specialized in narrow product lines which were unattractive for the Chinese (where the ratio size / price were not favorable to the Chinese). They decided to use automated industrial products, which allowed them to increase capital expenditure and reduce personnel costs. The level of product quality and technological skills were consistent with the requirements of other industries; ? [...]
[...] In conclusion: the barriers to entry are high and therefore the threat of new entrants is relatively low. GOVERNMENT ? Import quotas are established by the European Union on certain toys from China. However, in France, and thus the sanctions have little power in reality. ? Safety standards A substitute is a product or THREAT safer service that will forward a alternatives-TIO large market share or even N all since it could fulfill the same function as the existing product sector but is cheaper. [...]
[...] Improved logistics: LOGIE The Jura rely on responsiveness to counter Asians. They can deliver a complex product which they do not have in stock in 15 days; ? Development of production techniques ⋄ continuous renewal of their ranges involves the launch of 350 new products; ? Use of automated industrial tools allows a reduction in personnel costs; ? The video and electronic games are growing steadily and may pose a threat to traditional toys. ECOLOGY ? The Jura have specialized in plastic carrier vehicles; ? [...]
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