Toy World Inc.

Powerful Essays
Topics: Pro forma, Inventory
INTRODUCTION

Toy World, Inc. was a manufacturer of plastics toys for children. Its product groups included toys cars, trucks, construction equipment, rockets, spaceships and satellites, musical instruments, animals, robots, and action figures. The products are a wide range of designs, colors, and sizes. This kind of business was a highly competitive business. Moreover, this industry was populated by a large number of companies, which were short on capital and management talent.

Since capital requirements were not large and the technology was relatively simple, therefore it was easy for new competitors to enter the industry. Design and price competition was fierce, resulting in short product lives and a relatively high rate of company failures. To invent an innovation of new toy could be a competitive advantage for such company. This will make a high margin for recent time until competitors were able to offer a similar product. This kind of profit might contribute importantly to recent year.

In recent years, competitive pressures on smaller firms had also intensified due to an influx of imported toys produced by foreign toy manufacturers with low labor costs.

COMPANY BACKGROUND

Toy World, Inc. was founded in 1973 by David Dunton after his release from naval service. Before his military service, he had been employed as production manager by a large manufacturer of plastic toys. Mr. Dunton and his former assistant, Jack McClintock, established Toy World, Inc. with their savings in 1973.

Mr. Clintock then served as production manager, and Mr. Dunton as president who was responsible for overall direction of the company's affairs. After a series of illness, Mr. Dunton's health deteriorated, and he was forced to retire from active participation in the business in 1991. Mr. McClintock assumed the presidency at that time. In 1993, Mr. McClintock hired Dan Hoffman, a recent graduate of a prominent eastern technical institute, as production manager.

Mr.

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