The Strategy of Hornby Plc - Essay Example

Hornby Plc was not successful at implementing its strategy of exploiting the Olympic Games to increase its revenues. The company made the mistake of putting too many of its eggs in the same basket. Hornby has to adapt to the new realities of the marketplace. The company has to immediately increase its research and development budget to create new innovative toys. The focus of the firm’s research initiatives should be on electronic toys. One of the benefits of electronic toys is that they appeal to the interest of both parents and children (Highbeam 2012).

Hornby Plc currently has the greatest market opportunity in the toy industry in the upcoming 2012 Christmas season. The firm has to implement a growth strategy this upcoming season to diversify its revenue stream. The company will penetrate ten new consumer markets utilizing an exporting strategy. The firm will implement a passive exporting strategy focused on capitalizing on the season boom that occurs every year on Christmas. The firm will target at least five Latin economies. “Goldman Sachs forecasts that Brazil and Mexico will be solidly placed within the world’s six largest economies by 2050” (Thecostaricanews, 2012).

The Latino toy market has the peculiarity of having two days in which kids receive gifs which are Christmas Day and the 6th of January referred to as Three Wiseman Day. Hornsby will ensure that they have a wide variety of toys by enhancing its supply line of toys. The company is going to increase its number of suppliers to include more high-technology toys, bargain toys, and educational toys. Educational toys are great gifts because the toy serves the dual function of entertaining and teaching.

These toys help aid the child’s creativity and intellectual growth (Growingtreetoys, 2012). The firm will increase its Chinese supplier of toys. The strategy of increasing suppliers is implemented in order to improve product variety and increase profitability by lowering acquisition costs. The firm is going to improve its procurement function by acquiring a new information system that will help the firm better access the prices available for toys in the marketplace. The new tactics and strategies at Hornby will only help the firm if the company is able to increase its customer base.

The firm needs to pay close attention to its marketing strategies. The firm will reinforce its use of the internet to obtain e-commerce sales. Worldwide e-commerce sales are expected to reach $963 million by the year 2013 (Davis, 2012). The firm should get its product out there by including a limited supply of its merchandise in bargain stores such as eBay to raise the demand for the products. Another marketing channel that the firm needs to exploit is cellular advertising. The global market for cellular advertising is expected to reach $20.

6 billion by 2015 (Plunkettresearchonline, 2012). Cellular advertising can be more effective at reaching the target market of the company. Another innovation that the company can use to gain the interest of children is by including advertisements within video games.