Toy Industry Report
1 Uptoys Report
Environment Analysis of Toy Industry
Doing business in the worlds toy industry today, is anything but plain sailing, with the toy industry as a whole generating $21.47 Billion in 2009 and $21.65 Billion in 2008 (Riley, 2010) This producing a fiercely competitive market, but a market that is very open to new entrants,right throughout the industry. The market is also growing year on year with birth rates rising throughout the world, with the U.K. Birth rate growing this year (2014) by 13%).
Using Porter's five forces model (see appendix 1),we can look at the (Micro) external environment for the toy industry.
Risk of entry
The barrier of entry to the Toy industry is very low, this given new and up and coming entrepreneurs and companies a chance of success in this very fast paced and fiercely competitive market, to create products to capture the attentions of children and adults alike. The market environment has also pushes many well known brands to invest a major part of their budgets on research and development, allowing them to introduce new products continuously. Many well known brands such as as Hasbro, Mattel, BanDia and many other companies also invest huge amounts of money to compete for licensing of products connected to characters from TV shows, Films and video games,to expand their market share.
Power of the Buyers
The toy industry is very concentrated, this leaving manufacturers I a very weak bargaining position with its customer, for example fives stores including Wall-mart and Toys “R” Us make up 54% or Hasbro's net Revenue in 2009. (Hasbro inc., 2009) Target, Wall-mart and Toys”R” Us also had 43 % of Net Sales of Mattel, (Datamonitor, 2007)these both figures being massive amounts of products and given these companies power on pricing. The rise in online activity had also gave the manufacturer a door to sell direct to customer, but most of the large manufacturers still use the traditional route through
Environment Analysis of Toy Industry
Doing business in the worlds toy industry today, is anything but plain sailing, with the toy industry as a whole generating $21.47 Billion in 2009 and $21.65 Billion in 2008 (Riley, 2010) This producing a fiercely competitive market, but a market that is very open to new entrants,right throughout the industry. The market is also growing year on year with birth rates rising throughout the world, with the U.K. Birth rate growing this year (2014) by 13%).
Using Porter's five forces model (see appendix 1),we can look at the (Micro) external environment for the toy industry.
Risk of entry
The barrier of entry to the Toy industry is very low, this given new and up and coming entrepreneurs and companies a chance of success in this very fast paced and fiercely competitive market, to create products to capture the attentions of children and adults alike. The market environment has also pushes many well known brands to invest a major part of their budgets on research and development, allowing them to introduce new products continuously. Many well known brands such as as Hasbro, Mattel, BanDia and many other companies also invest huge amounts of money to compete for licensing of products connected to characters from TV shows, Films and video games,to expand their market share.
Power of the Buyers
The toy industry is very concentrated, this leaving manufacturers I a very weak bargaining position with its customer, for example fives stores including Wall-mart and Toys “R” Us make up 54% or Hasbro's net Revenue in 2009. (Hasbro inc., 2009) Target, Wall-mart and Toys”R” Us also had 43 % of Net Sales of Mattel, (Datamonitor, 2007)these both figures being massive amounts of products and given these companies power on pricing. The rise in online activity had also gave the manufacturer a door to sell direct to customer, but most of the large manufacturers still use the traditional route through