Competitors and Competitive Rivalry in Stuff Toy Industry - Research Paper Example

?Competitors and Competitive Rivalry Table of Contents Competitors and Competitive Rivalry 3 Competitors, SWOT Analysis & Market Leadership 3 Competitors 3 SWOT Analysis of each Competitor 3 Emerging Trends & Future Competition in Stuff Toy Industry 6 Competition Rivalry in the US Stuff Toy Industry 6 Present Industry Situation, Market Position of Build a Bear & Barriers to Entry 7 Works Cited 8 Name of the Student Name of the Professor Name of the Course Date Competitors and Competitive Rivalry Competitors, SWOT Analysis & Market Leadership Competitors Build a Bear workshop does not have direct competitors but has indirect competitors like Hallmark, Pillow Pets and Webkinz. The Pillow Pets is one of the major threats for Build a Bear because it is one of the most coveted stuff companies which allow manufacturing of customized products as per the client’s instructions. SWOT Analysis of each Competitor Pillow Pets Hallmark Strength The company manufactures stuffed toys and pillows as per customer’s specification and interests (Goldberg, “Why the toy industry isn’t having any fun”). It sells its products in physical store format along with online stores (Goldberg, “Why the toy industry isn’t having any fun”). The first company to start a television campaigning. The shop owners provide excellent customers service by catering to individual customer’s needs for all festive occasions. The brand is established since the year 1920 Weakness The company targets pet owners because it specializes in making customized stuff toys for the pet owners (Goldberg, “Why the toy industry isn’t having any fun”). The company lays emphasis on the manufacturing of core products like greeting cards and other gifting products. Opportunity The threat of substitutes is low for the company because there are few companies who manufacture customized stuff toys for pet owners. The overall toys and greetings industry is expected to yield profitability in the upcoming five years. Since, the company manufactures all kinds of gifting accessories it will be benefitted on the whole. Threats The company has less number of warehouses which makes the manufacturing of the stuff toys and pillows numbered. The company is unable to manufacture product in bulk unlike its competitors. The company lays special emphasis on the manufacturing of greeting cards and has lost its exclusivity of producing stuff toys. The company has slowly lost its reputation as a leading stuff toymaker. The competition in the toy industry is very intense and the profitability of the company is decided by certain factors like quality of the stuff toys, price and play value. Among the top stuff toy companies Build a Bear and Pillow Pets are expected to maintain its market position and also yield a decent amount of profits even in the current situation (“Build-A-Bear Workshop, Inc. Competition”). Pillow Pets has not been able to manufacture stuff toys on a large base but Hallmark has been an established stuff toy maker and greeting card manufacture since 1910 (Linders, “Competitiveness Proofing Toy Related Industry ”). Emerging Trends & Future Competition in Stuff Toy Industry The current scenario in the stuff toy industry is weak and the industry has been witnessing decreasing trend in the purchase of the stuff toys and pillows. The US stuff toy industry has been witnessing weak sales and it has currently generated profits of $ 17 billion (“Annual Sales Data”). The worldwide sales of the stuffed toy have also decreased since 2010; the profits amounted to $83.4 billion in the year 2012 (“Annual Sales Data”). However, certain series of toys imitated from the popular movies like Skyline series have remained popular among the children and teenagers. The Disney series has also been popular and has gained worldwide popularity. By observing the current trend it has been noticed that the stuff toy industry has been witnessing declining sale and only certain series have been generating huge amount of revenue amidst this economic slowdown. The stuff toy industry can slowly be replaced by the virtual room gaming industry. The virtual gaming industry helps the customers to make their own stuff toys and then play games online (“The Transformational Toy Manufacturing Industry”). The stuff toy industry can be slowly replaced by this virtual gaming industry because it has the possibility of attracting potential customers and the availability of this service is high. Competition Rivalry in the US Stuff Toy Industry The US stuff toy industry is one of the highly concentrated industries which include approximately 700 companies (“Examine the World Toys and Games Market Brief”). Each year it generates more than 25 billion in the US, however, it has generated only 15 billion in the year 2013. This is due to current economic slowdown in US and this has made the competition in the current industry even more intense. This has also increased the competition for acquiring licensing among competitors like Build a Bear, Pillow Pets and Hallmark, McDonald very stiff and intense (“The Evolving Dynamics of the U.S. Toy Industry”). This allows the companies to manufacture stuff toys by imitating the popular characters from movies, television and comic books. However, the same does not apply for internet based companies who manufacture only limited portion of the stuff toys and pillow and can sell it to restricted areas. The whole sale prices in toys, stuffed animals and other vehicle consoles are increasing day by day which has also been responsible for the sudden decrease in sales. However, acquiring license for stuff toy is not only time consuming process but the acquisition can turn out to be expensive for the company (“Chinese toys trigger attrition in Indian SMEs: ASSOCHAM; the Indian toy industry fighting for its survival!”). The conduct of toy fairs by the company at regular interval poses to be very expensive affair but also helps in garnering attention of the potential consumers. The existing companies like Build a Bear, Weblinks, and Hallmark have to be in constant innovation of stuff toys to retain a strong position in the market and also widen its customer base. Present Industry Situation, Market Position of Build a Bear & Barriers to Entry As mentioned before, that the present situation of the stuff toy industry is weak and there has constant innovation for attracting a larger customer base. Build a Bear is one of the most leading stuff toy manufacturing companies in the world and has large control over the market. It is one of the few companies that allow the creation of stuff toys as per the choice of the customers (“Accessories”). The barriers to entry are quite low in this industry and this is one of the major factors that would help Build a Bear in retaining its strong market position. This is because Build a Bear is the only company which not only makes stuffed toys as per customer’s specification but also allows the customer to create the toys in the physical store unlike its competitors (“Stuffed Animals”). Works Cited “Accessories.” Build a Bear. Build a Bear, 2013. Web. 04 October 2013. “Annual Sales Data.” Toy Industry Association. Toy Industry Association, 2012. Web. 04 October 2013. “Build-A-Bear Workshop, Inc. Competition.” Hoovers. Hoovers, 2013. Web. 04 October 2013. “Chinese toys trigger attrition in Indian SMEs: ASSOCHAM; The Indian toy industry fighting for its survival!” ASSOCHAM. ASSOCHAM, 2013. Web. 04 October 2013 “Examine the World Toys And Games Market Brief.” Business Wire. Business Wire, 2008. Web. 04 October 2013. Goldberg, H., “Why the toy industry isn’t having any fun.” Reuters. Reuters, 2013. Web. 04 October 2013. Linders, G.H., “Competitiveness Proofing Toy Related Industry.” Ecorys. DG Enterprise and Industry, 2012. Web. 04 October 2013 “Stuffed Animals.” Build a Bear. Build a Bear, 2013. Web. 04 October 2013. “The Evolving Dynamics of the U.S. Toy Industry.” Seattle Pi. Seattle Pi, 2012. Web. 04 October 2013 “The Transformational Toy Manufacturing Industry.” Little & King. Little & King, 2010. Web. 04 October 2013. Read More