Hasbro is a publicly traded company founded in 1923 which specializes in toys for children, infants, and toddlers, as well as puzzles and games for consumers of all ages. Although the company has experienced significant annual revenue growth since its inception, due to several factors including the recent economic downturn, it has encountered obstacles in each of its four business units. With several competitors, such as Mattel, vying for the business of increasingly financially conscious consumers, Hasbro must optimize its operations in order to achieve its goal of becoming the world’s leading toy company in an uncertain future, Specifically, the company must pay particular attention to the following issues:
-Low market share in the Preschool segment
-Need to integrate technology into product lines
-Lack of a clearly envisioned future
-Competition with software and electronics companies due to digital product development -Dwindling profit margins and increased price pressures
-Rising labor costs in China
-Dora the Fisher Price Destroyer
-Expand current Preschool product portfolio
-Partner with electronics companies anchored in early childhood education such as V-Tech
-Create opportunities to seize a portion of the Fisher Price market share -A NERF’ Already…Go Virtual!
-Increase development of software based versions of successful products and games
-Continue to partner with software and video game developers
-Grow existing brands and generate revenue with lower COGS and distribution costs - Global Monopoly
-Create new products targeted at emerging markets
-Form localized marketing and R&D teams to develop new products
-Outperform competitors in evolving markets
Dora the Fisher Price Destroyer
Current data and trends suggest high growth potential in the preschool toy market. Given Hasbro’s presently low market share in this segment the most viable option appears to be a revitalization of its preschool product line through portfolio expansion, strategic partnerships, licensing agreements, and more efficient marketing. One possibility involves a partnership with a company such as V-tech, which specializes in early childhood electronics. This partnership has the potential not only to strengthen and invigorate Hasbro’s preschool product line but can also assist the company in closing the market share gap between itself and rival competitor, Mattel. Through this partnership, Hasbro should expect to out-perform Mattel in year over year growth, and ultimately exceed its market share within five years. In order to pursue this option, Hasbro must be cognizant of various issues including possible competitor retaliation, increased cost of goods sold, and rising Chinese labor costs.
Phase 1 Supporting Materials
Hasbro is comprised of four business units. The Boys unit, which is responsible for popular toys such as Transformers and G.I. Joes, is the company’s star. It’s portfolio of products, in conjunction with lucrative licensing agreements and ties to the entertainment industry, contribute to its high market share and solid growth potential. The company’s cash cow, Puzzles and Games, is characterized by low growth, but due to its well-known brands, including Monopoly and Scrabble, this unit has captured a large market share in comparison to competitors and provides Hasbro with a steady stream of revenue. Hasbro’s Girls division generates approximately 17% of its overall revenue. Although it is responsible for a few successful products, such as My Little Pony and Littlest Pet Shop, this division shows low potential for growth, and has a low market share making, it a dog on the BCG chart. The current question mark for Hasbro is its Preschool business unit. Responsible for popular products such as Mr. Potato head and Tonka, this division has very low market share but...