Success Factors in the World Toy Industry - Essay Example

Success Factors in the World Toy Industry Introduction Two words that can be considered as most ideal in describing today’s business environment are globalisation and competitiveness. The current business environment is said to be globalised because most forms of trade and economic barriers that prevented the free flow of goods and services from one part of the world to the other have been removed, making it possible for there to be a liberal global market (quote). Even though this may come with its own advantages, quote (year) noted that it was the same phenomenon of globalisation that has made the world’s business environment highly competitive today. This is because wherever there is a fair competition market structure, the number of competitors becomes many, with each having its own business strategy. In the light of this, Green Toy cannot be exempted from this situation where the company has to compete effectively in a globalised market. This paper therefore investigates some of the key success factors that have sustained the company thus far, as well as the competitive advantage the company has held over its competitors over the years. Whiles doing this, ways in which the company can take advantage of globalisation through international expansion shall also be reviewed. What are the key success factors in the world toy industry? 3 [123x3] Quote (year) noted that every industry has its own success factors, some of which are internal and others, external. As far as the toy industry is concerned, a similar situation can be seen. From the outcome of the market research by Key Note (2014), one identifies three major success factors that influence the outcome of the toy industry as to whether a particular company will be successful or not. The first of these is the child population in the market, which in this case is the UK market. This is an important success factor given that children serve as the direct consumers of toys and toy products. From appendix A, it can be seen that there is a very favourable trend of child population whereby the number of children within the population keeps increasing by the year. The second success factor that is also reflected in the Key Note report has to do with the household activity of families in the UK. Quote (year) noted that household activity forms an important demographic factor that directly influences the purchasing behaviour of families. As a success factor, it is expected that it is expected that most households will be involved in economic and social activities that makes it possible for them to buy toys for their children. With this said, it can be seen from appendix B that there are several homes without dependent children. This is a bad indication for the toy industry because the more dependent children there are the more likely it is for there to be patronage of toys. Meanwhile, the number of workless households keeps reducing by the year, which means that the likelihood of homes to be able to afford different kinds of toys is higher. The last but equally important success factor that can be associated with the toy industry is the type of toy that a particular company produces. According to quote (year), consumer behaviour in the toy industry is shifted towards a part where there is a repeated endorsement for types of toys, which remains the order for buyers for a very long time. In the report by Key Note (2014), this is confirmed with a modern trend where tablets for children seem to have taken the place of traditional toys. Dynamism in production can therefore be noted as a perfect solution in the current endeavour by ensuring that toy manufacturing companies will look into ways by which they can incorporate features of the tablet technology into their production if they are to succeed in the UK market (quote). What are Green Toy’s competitive advantages in the international toy market? 2 [184] In any competitive market, companies need competitive advantage to win the favour of available consumers over their competitors (quote). This means that having competitive advantage makes it possible to survive in any competitive market (quote). Reading about Green Toy Inc., an impression that is developed is that the company has benefited immensely from its brand equity. Meanwhile, brand equity is identified as a major competitive advantage, that makes companies and their brands identifiable to consumers (quote). Emphasising on how brand equity serves as a competitive advantage, quote (year) explained that consumers always wish for there to be variety on the market. But as the variety becomes many, they become sceptical on which products guarantee the quality they want. In a situation like this, these consumers tend to fall on companies with long standing names in the industry from which they are buying from. This means that brand equity is a competitive advantage that older companies use over relatively new companies. Meanwhile, Green Toy, though not a traditional toy company has been around since 2006 and had a very fair media publicity and promotion that makes it more of a household name in the toy industry. Apart from its brand equity, Green Toy Inc. has taking fair competitive advantage with its differentiation marketing strategy whereby it has continued to focus on the production of eco friendly toys and baby products. Should Green Toys Inc. consider a higher degree of international expansion of their products? 2 If yes, which country/regions should they target and why? Conclusion From the discussions above, there are a number of conclusions that can be made for Green Toy and the company’s quest to remain competitive in today’s globalised market. First, it can be concluded that the company has rightly identified the key success factors that prevails in the larger toy industry and have tried to strategise its marketing plans towards these success factors. However, there remain major lapses when it comes to the need to connecting these marketing strategies with the overall business model that the company operates. This weakness however seems to have been taken very good care by the company’s brand equity, which has served as a major competitive advantage for a good number of years now. Quote (year) however noted that overreliance on brand equity could be risky for business growth due to the disproportionate balance between brand equity and the product lifecycle. With this said, it is very important that the company develops a new focus towards utilising its brand equity by looking to expand its existing presence to new international market. More specially, it can be said that there are several opportunities that remains untapped in emerging markets that Green Toys Inc can take advantage of. References Key Note (2014). Toys & Games. Appendices Appendix A: Child Population in UK by year Source: Key Note (2014) Appendix B Household Activities of UK Source: Key Note (2014) Read More