Terry Bros Harvard Case

Topics: New product development, Lego, Product management Pages: 10 (2702 words) Published: December 9, 2012
Rev. July 3,1985

Terry Brothers (A)
Terry Brothers Terry Brothers manufactured and sold a broad line of toys and games including highly popular board games under such trademarks as "Monopoly," "Clue," and "Risk," children's games such as "Peter Rabbit," and "Winnie the Pooh," and card games such as "Rook." In addition, Terry Brothers produced action games, "Nerf" toys and balls, electronic toys and strategy games for older children and adults. In 1978 Terry Brothers produced over 75 toy and game items and reached sales of just over $82 million. The company was the seventh-largest game and toy company in the United States following Mattel, Fisher-Price, Milton-Bradley, Kenner, Hasbro, and Ideal. The company was generally regarded as an industry leader with respect to product quality, product innovation, and financial performance. It took Terry Brothers 95 years to reach its leadership position in the industry. The company was founded in 1883 by George Augustus Terry (then a high school boy) who invented, developed, and sold a board game called "Banking." The game was a success and before he graduated from high school George Terry brought out an additional successful board game called "Famous Men." As an adult, Mr. Terry continued to develop new games, and keyed each new addition to his product line to topical subjects of the day. The Spanish-American War period, for example, spurred the development of "Military Game," "War in Cuba," "The Siege of Havana," and "Hold the Fort." The excitement of the Yukon gold rush led to the introduction of "Klondike." Between 1900 and the Great Depression of the 1930s, Mr. Terry introduced puzzles and board games, invented ping-pong and popularized Mah-Jongg. By 1932 Terry Brothers reached $500,000 annually. In 1933 Charles Darrow, an unemployed heating engineer, invented a real estate board game for his own diversion that ultimately had a major impact on Terry Brothers. Terry Brothers purchased the rights to the game in exchange for sales royalties, developed it further and put it on the market under the trademark "Monopoly." The game was an immediate success. By 1979 "Monopoly" was the largest-selling board game in the world and had been so for many years. New product development and product introductions continued on a regular basis through the 1940s and 1950s into the 1960s. In 1968 Terry Brothers' annual sales reached $21 million. In that year, a combination of heavy cash needs to finance further growth, and tax considerations (the company was completely family-owned) led to the merger of Terry Brothers with General Mills, Inc.

Terry Brothers (A)

The purchase of Terry Brothers by General Mills marked the latter company's second acquisition in the large industry of games, crafts and toys. Earlier, General Mills had purchased the Kenner Toy Company, a leading producer of promotional toys, and both companies were included as a part of the General Mills Fun Group. Contrasted to the Kenner Company's line of toys which generally had very short life cycles, Terry Brothers' product strategy focused on stable game products with long-term sales potential. Terry Brothers' new product development efforts for board and card games continued after the General Mills acquisition, and several new games were introduced each year. In addition, Terry Brothers' research into "nongame" toy areas resulted in the development and successful introduction of "Nerf' balls (soft polyurethane balls for indoor use) and a line of preschool polyurethane toys during the early 1970s. Nongame toy development continued to play a major role in total development efforts, and by the mid-1970s the company was developing a new line of electronic toys. Research and Development at Terry Brothers During the early years of Terry Brothers, most new games were developed by George Terry himself. In recent years, most of the games published by Terry Brothers had been submitted to the company by outside inventors. During the...
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