International Business Module: International Marketing Assignment Title: Case study analysis Date and Time of submission: 20/10/2014 09:30 Please ensure that you complete and attach this Submission Form to the front of all work that is submitted online. Before submission, please ensure that your name does not appear anywhere on your work, only your Student ID number.
By submitting your work online you are confirming that your work is your own and that you understand and have read the University rules regarding plagiarism and he consequences that will arise should you submit plagiarisms work. Case study analysis Key success factors in the world toy industry. The reality of today’s society identified by the text is low birth rate around the world, which resulted of the size of family has shrank gradually. In addition, the tendency of woman postpone their plan to have children became more and more popular both in developed and developing country.
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However, on the other hand, those changes have provides more opportunities to develop toy. The toy industry has got some benefits from falling family size. According to the demographics from text, the percentage of population in 0-14 years has declined continuously from 35. 2% in 1980 to 26. 3% in 2010, which means with the trend of the declining number of children within family, parents have more spare money to purchase toys and fewer children to share their toys. At same time, one child in a family can get more love from their parent, because they do not have to share their with their brothers or sisters.
Especially in China, which has been indicated in the text, many parents spoil their children with toys and cloth, from the statistics data shows that it occupied 26% of total spending in 2009, which is much higher than other countries on toys spending. That condition provides a promising market for global toy industry, because those parents demand more toys to satisfy their children, to utilize this demand is good for promoting consumption of toys. Besides, the demand of pre-school group can be a key factor to develop toys business.
Many Asia parents believe that pre-school toys are benefit to enhance a child’s intelligence and contribute to their study in school. The text states that parents in city have pay more and more attention on use toys and games to improve children’s study life and stimulating intelligence. This group provides a huge market for toys manufacturers to target on pre-school age. Moreover, women who have children in older age usually spend more on traditional toys than younger. The text indicate that because of modern mothers have to pay more attention on working to support their family, they can’t always accompany with their children.
Therefore, toys can fill the gap between children and parents. With the tendency of women prefer to have children in older age, they can be the main driving force on the development of toy industry. Green Toys’ Inc. Key competitive advantages in the international toy market. The competitive advantages of Green Toys’ Inc. Can be summarized in three forces, which include rivalry, suppliers and buyers. The first advantage is environmental protection production process. Following strengthen of healthy and environmental awareness, toy industry has to face parents’ increasingly demand on green toys.
Therefore, the most competitive element of the Green Toys’ Inc. Is produce toys with green materials. The text shows that Green Toys’ Inc. Makes children’s toys with recycled plastic and other environmentally friendly materials. This measure contributes to reduce the consumption of non-renewable resources such as fossil fuel and pollutant emission. This competitive advantage is relevant to industry competitive rivalry from Porter’s five Forces. One of the most important objectives of the company is to maintain sustainable competitive advantage through innovation.
The Green Toys’ Inc. Always insist on using green materials to improve product’s safety and protect environment, in order to enhance competitiveness. In addition, compare with competitors, the Green Toys’ Inc. Just using local sources to maintain its production, in order to reduce the usage amount of fossil fuel. For this reason, the Green Toys’ Inc. As obtained the general consumers’ approval to chose their products. Additionally, the bargaining power of suppliers plays a significant role in a market.
Powerful suppliers can guarantee the quality of the resources and using constant suppliers can saving cost at same time. On the assumption that the Green Toys’ Inc. Not only cooperate with California companies, not only exist a potential threat that unsteady raw materials’ quantity, but also has to take the risk of fluctuations in prices. In conclusion, the Green Toys’ Inc. Raises its competitiveness by select suitable and fixed supplier. Thirdly, the Green Toys’ Inc. Also operates an appropriate marketing strategy-?online purchase.
Due to the main consumer group is mothers between 25 and 40, the most of them are well educated and interested in shopping online. Moreover, the text state the modern reality of there are huge number of parents are good at buying products online for their children. The Green Toys’ Inc. Just utilized this situation to extend their distribution channels both in store and online. It is much more effective to take parents’ fancy and convenient to implement. The Green Toys’ Inc. Applies the market segmentation based on buyers’ behavioral factors.
The online market makes the function of marketing further strengthened. Consumer can select toys without limitation of time and place, and purchase them effectively. On the other hand, merchants can also making production in a relatively short period of time to meet personalized demand of consumers, and dispatch them at right location, with minimal cost to send the goods to consumers’ hands. Green Toys Inc. Should further expand their business into international. According to the statistics, the main target market of Green Toys is in the US, which occupied 90 percentages of whole sales.
Meanwhile, the company also distributors its toys in 35 countries but they are not as profitable as in the US. Internationalization is a certain tendency all around the world no matter which industry or field, moreover, toys lifestyle is much shorter than other products and can be replaced in a short time, that means toy industry is within a environment of intense competition and continuing development of technology. Therefore, it is necessary to consider about a higher degree of international expansion. There are many benefits for Green Toys through international expansion.
Initially, the transfer from native competition to international competition is contributes to enhance competitiveness against competitors within the US, because competitors are always struggling to occupy more market share, a company with more opportunities is useful. In addition, international extension is helping the company to gain more profits under the condition of local market saturation. Furthermore, building overseas factory is a good way to saving cost, especially in some developing counties such as India and China, which have significant competitiveness on cheap labor force.
However, strengths always allowed by weakness. Expending business oversea means Green Toys Inc. Will lose its advantages on little cost on deliver raw materials and products. In addition, some developing countries still existing some potential opportunities on developing echo- friendly toys, because they haven’t aware the importance of environment protection during production process, the field of green toy is still nearly blank. And Asia Pacific and India are also the biggest regions which have the largest number of 0-14 years old children, which means those markets have enormous potential for develop echo- friendly toys.
Meanwhile, some threats because of diverse market environment and the level of economic development should never be ignored, such as people dong have leisure money to afford toys. During the development of expanding business oversea, one of the most potential countries is China. China as country with high- speed national economic development, not only has massive potential consumer based on the huge number of population, but also has some cultural factors benefit to promote toy industry. The text indicates that because of the population control policy, the majority of Chinese families Just have one child in a family.
Thus, many children in city have been spoiled with toys and be called ” little emperors”. With the condition of parents in China are more cherish their children, they would provide large potential demands of toys, which creates a huge market to sell toys. In addition, the other target country is I-J, which has the second largest market size following US with an upward trend. Moreover, I-J market also creating huge demand of toys during the Christmas month, which is a good opportunity to gain profits. On the other hand, UK market has developed online channel, which is save market budget for the operation of Green Toys.