Hasbro Inc. is a worldwide leading company founded in 1923 dealing in the designing, production, marketing and sales of children and the entire family leisure moment entertainment materials which include toys, games including both high tech and traditional to various market segments across the globe. The company had achieved successful moments in the distribution and sales of toys and games until the financial year 2004 when its total sales reduced tremendously in the United States’ toy market, an issue that led to the company’s management team coming up with new strategies of coming up with more new innovative products, reducing its total reliance on the licensed products and increase their focus of increasing the growth of the company’s brands. These strategies were aimed at reducing total operations costs as well as increase the total sales of the company’s products. The level of competition in the entertainment industry is one of the core factors that led to the decline in total revenue as well as the closure of some key companies including Toys ‘R’ Us and the FAO Schwartz who were among the leading distributors of the company. Hasbro is the second toys and games distributors especially in Rhode Island after Mattel who had been in the children entertainment industry since early 1920s and still dominates this market.
The long term vision of the Hasbro Company is to be the position one company in the toys and game industry while being a leader in the provision of play as well as be the number one pioneer, marketer and partner to all the customers and all the channels.
The mission statement of Hasbro business entails at creating great games and toys, great lifestyle and entertainment products and services that are enjoyed by the people of all ages globally.
The company boasts of a huge resource base that boosts its operations, production and revenue. This includes a strong workforce that plays a major role in all operational activities. Hasbro has invested in motivating its members of staff in order to increase their work output and meet the clients’ expectations. It ensures that employee’s welfare is addressed and working standards are improved. The company also has production plants in both in the United States as well as different parts of Europe. This boosts its production and ensures there is sustainability in all its operations as a way of increasing its revenue.
Hasbro has succeeded in commanding a huge share of the toy market because of a number of reasons which have contributed greatly to its industry competence. The company is able to utilize its effective production plants to meet the demand for its products in different parts of the world. It has plants in the United States of America, Ireland as well as Valencia in Spain. It is able to review the performance of all its facilities to ensure that their operations are sustainable. One of the greatest competences exhibited by the company is the ability to maintain high working standards and ensuring that it employees are motivated and valued. This has worked well in improving the general work output and meeting the expectations of the customers. The company is able to act on short notice and anticipate the demand for its products.
The company is well managed and run in terms of operations, production and delivery of its products to the market. The fact that it is able to anticipate demand makes it able produce the products that are in required in the market and place it in a position to handle production and delivery under short notice. The company also conducts research on development to ensure that new and better products that meet current market demand are produced. High levels of innovation coupled by the company’s ability to work and develop characters familiar with a particular market make it a world leader in the toy business.
- Ability of the business to maintain products that are price competitive as a result of the company’s large size that enabled the company to be flexible and maintain a cost efficient line of production (P 13).
- Strong distribution network including in house sales and independent distributors with knowledge on the consumer needs at the local market level.
- The company’s products are varied and well known to the consumers whereby they are among those dominating the market share in the United States as well as the global market. Some of the company’s games that have attained a high market hare include monopoly and scrabble .among others.
- Frequent communication with major international foreign manufacturers particularly in Asia and Middle East while maintaining concise measures in regard to product actions in the process of outsourcing
- The company’s ability to consistently produce new games which caters for all the age groups by adapting new and unique concepts and designs with examples including Magic and Dual masters trading cards.
- Large geographical market coverage whereby the company serves US toy market as well as 25 other countries globally. Weaknesses
- Hasbro is the second toy and games selling company after Mattel who have dominated the market for the longest time.
- Over focusing on the production and sales of cyber toys and high tech games while paying less attention on the traditional toys and games which is likely to affect the market of these traditional toys which were still preferred by some consumers is a weakness that led to reduction in the company’s total sales.
- Weak advertising and promotion strategies for their products especially the non-traditional productsOpportunities
- Wide market coverage with continuous increase in the demand for the entertainment products and services
- Wide range of consumers for the company’s products from toddlers to adults which allows the company to produce variety of products to satisfy the needs of each age categoryThreats
- Consumer needs that are characterized with being volatile require the company to continuously come up with new products that satisfy the consumer needs and wants consecutively. This is one threat that led t the fading market of the most popular company’s game Pokémon craze as the consumers taste on the game had slowly diminished.
- The increase in number of general and specialty products competitors providing the family entertainment products hence flooding the market puts the company at a risk of losing its market share for most products. The key competitors who pose a threat to the company include Mattel which is the leading company in the toy and games industry, Lego and Jakks Pacific. The company further competes with specialty companies such as Dakin, Ohio Arts, Toy Quest, Spin Master among other major small companies who are producing similar products as those produced by Hasbro and as a result, this has contributed to the reduction in market share and reduction in total sales.
- Constantly changing technology and new innovations in toys and games making techniques so as to constantly meet the consumer needs is a threat to the company’s traditional toys and games as they are likely to be replaced by the hi tech entertainment products which are more technologically advanced.
- The gradual shift in the buying patterns of the consumers
- The presence of several regulatory bodies that control and govern the company’s production capability is a threat to the company’s expansion strategies.
- The entertainment industry is highly seasonal hence this is likely to affect the projected sales of the company’s products.
3 Fact Findings and Recommendations for each one
Decline in number of retailers to distribute toys as well as the poor promotion and marketing strategies were some of the factors contributing to the decline in total sales.
The company is recommended to seek new market segments to promote the sales of their products as a survival strategy for the future (p 17).
Current sales of the company products are declining; the company could adopt manufacturing of fad items which could help in generating big sales hence increasing profits for the company. The recommendation for this fact is that the company should adopt a strategy of manufacturing a variety of fad items so as to evaluate which product has a better market since the demand for fads is short lived. Implementation As a way of securing the company’s short term and long term sales and the company development, the management has to adopt both strategies that show an increased profit margin. This involves taking advantage on the production of variety of fad products which increase profits in the short run while coming up with innovative measure that provide new advanced products for all the consumers.
Hasbro Inc. has experienced major financial downfalls as a result of the declining market share due to high completion and the shift in consumer preferences. The company however, has a potential to successfully compete in the market as a result of the increasing demand in various forms of entertainment. This is because, the company has potential for success as a result of their innovative ideas, devoted employees as well as their implementation programs aimed at incorporating plans that are intended to satisfy the consumers needs while increasing the company’s profitability.
Wheelen, Thomans and Hunger David. Strategic management and business policy: concepts and cases. NY: Pearson Prentice Hall, 2008.