Strategic Management Project
Company & Industry Description
History of the Firm
In 1923, two brothers who migrated from Poland started a small business by selling textile remnants. In 1926, the Hassenfeld’s officially organized what is known today as Hasbro Inc. In the 1940’s, the brother duo expanded by offering pencil boxes and school supplies. By 1950, they were ready to leap into another market by introducing its novelty toy, “Mr. Potato Head”. GI Joe was introduced in 1963 producing revenue sells in excess of 28 million dollars the next two years after Hasbro spent nearly 2 million in TV ads (Miller 1998). In addition to toys, Hasbro develops games most notably Monopoly which was first introduced in 1935. Decades later, Hasbro continues to be innovative with product design, introduction of new products, developing brand recognition to maintain being a leader in the game and toy industry. Ownership Characteristics
Hasbro Inc is a publicly traded company in the NYSE. Alan Hassenfeld, Chairman of the Board of Hasbro Inc., owns about 4% in shares of the company; while other corporations such as The State Street Corporation and Barkley’s Global Investors UK Holding LTD are the major institutional stockholders and each own approximately 6% of the company. While there are other private stockholders owning significant amount of shares in the company, most of the ownership is comprised by institutional and mutual fun holders. Financial Condition
i. Financial Statements (Appendix)
ii. Level of Performance
Hasbro Inc. has been able to increase its net revenues consistently from 2002 through 2006. Its net revenues rose from $ 2,816,230 in 2002 to $ 3,151,481 while Hasbro Inc. produced Net Earnings starting 2003 of $ 158,000 which are now up to $ 230,000 in 2006. Additionally, Shareholder’s Equity was increased over the last 4 years by almost $3 and the debt ratio reduced by 23%, which indicates a financially sound and stable company. iii. Soundness
As mentioned above, Hasbro Inc. has been performing well in terms of company growth and profit maximization over its business units, however also substantially improved its debt ratio by continuously decreasing long term debt and increasing shareholders equity and return on investment. Hence, Hasbro Inc. is a financially sound organization that strives to become more profitable each year and was able to perform great throughout the last four year period.
The gaming and toy industry is a conglomerate of companies who have various brands and products in an environment that is competitive and retail market driven. Major players, such as Hasbro, Mattel, Jakks, and other manufactures have controlled the industry eliminating smaller firms due to relationships with major retailers such as Wal-Mart, Target and Toy R’ Us. However, competition among the larger firms is very intense and has required firms to build alliances with outside firms like Disney, Star Wars and others. These strategic alliances along with requirement to perform in the areas of product innovation, manufacturing, marketing and sales are vital to each company survival when products are primarily consumed in large retail box environments. Company Corporate Culture
Hasbro Inc. emphasizes innovation and professionalism within its company. Because of the nature of the business and its operating field which requires constant innovation in order to compete in the market and maintain leadership among its rivals, Hasbro Inc. has created a work environment that fosters innovative and creative minds to function accordingly. Additionally, the company values community involvement and creating opportunities for underprivileged children. Alan Hassenfeld has been a leader in rallying corporate executives to work with...