Toy2R: A PIONEER OF CREATIVE DESIGNER TOY IN HONG KONG Case Solution & Answer

Toy2R: A PIONEER OF CREATIVE DESIGNER TOY IN HONG KONG Case Solution

TOY2R-RESOURCE-BASED VIEW

The resource based view emphasizes on four things: strategy, competitive advantage, capabilities and resources. The capabilities of the firms help the company to achieve its competitive advantage. The resource based view includes the two most important factors, which are tangible assets and non- tangible services.

The tangible assets include visible physical attributes, labor, capital, land, building, plant, equipment and supplies. The intangible assets include invisible, non-physical attributes: culture, knowledge, brand equity, reputation, and intellectual property.

Toy2R Strategies and capabilities

• Raymond Choy started his toy business in Hong Kong by selling novels and exotic toys. The toys of the company became popular in the US, Japan and Europe. He wanted to expand his business globally as it was identified that smaller toy companies did not have enough alternatives to expand smaller markets excluding in Hong Kong.
• As Choy’s business has a strong background of toy retail market therefore, the company used its background image for the development of new Asian market. By using these strategies, the company achieved great success in the Masco Toys market and its retail and wholesale market rate increased from 30% to 50%however,the whole seller bears all the promotional cost related to the company’s product release activities, holidays and trade events.
• The Toy2R retail supplies help the company to achieve physical appearance and offer customer services to the consumers.
• The product of the company is always appealing and offer unique value and creative products to the customers.(Robert shaftow , 2011)

McKinsey’s 7s

Mckinsey’s 7s model was developed by Tom Peters in the early 1980. This model can be used in awide variety of situations where an alignment prospective is useful. This model helps in identifying the performance of the company and future changes in implementing the processes. Moreover, it helps the company to align its department processes during the merger and acquisition as well as to determine how effectively the companyimplemented its proposed strategy

The  Hard S’s
Strategy	Differentiation Strategy, Customer oriented
Structure	Manufacturing
Systems	comics alliances, outsourcing, structural trends
The Soft S’s
Style/Culture	Innovative, trendy and up to date
Staff	10 full time employees and 100 designers full time employees ( Toy2R annual report,2009) familiar with the common objective and approach of the company
Skills	outstanding commercial and promotion strategy ensuring goods gets to retail stores on time
Shared values/subordinate goals	 A general objective and mission statement

PORTER’S FIVE FORCES

BARRIER TO ENTRY

In the Toy market, the barrier to entry is low therefore,new companies with innovative idea and entertainment property can gain consumers’ preferences and also play significant role in capturing the customers focus in the market. In this case, Toy2r’s product achieved more acceptance as compared to its competitors. As a result, the effect of entry barrier is low in the Asian market rather the international market.

SUPPLIER POWER

In the toy market, the suppliers’ power is medium as giant companies such as Warner Brothers and Disney haveused theirpromotion strategies and vast collection of fonts, comic strips, merchandising and film and distribution networks to gain their market share in China. These large rivals could also influence supple production capability through their network of OEM supplier as a result,this affects the bargaining power of the suppliers.

BUYER POWER

In toy market, the buyers’ power is high. It is difficult for a company to promote new product in the existing market. The financial and economic crisis negatively affected the profitability and also affected the revenue of the company. The consumers’ attitude changes due to the social trends which affects the buyers’ power. The financial crisis also leads the customers to go for the cheaper brands……………

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