MGT368 Mid-term Exam
Article: Spend some time watching the videos and reading the article posted below. The links should help you START answering the questions.
Answers the questions listed below: (10*4=40 points)
Analyze the trends impacted Toys R Us negatively, which led to ultimate closing down of the chain.
Identify why Toys R Us lost its business to the competition and recommend what could have been done to fix it (this part of the analysis should exclude the Impact of COVID-19 crisis).
Write your analysis on the Impact of COVID 19 on the Toy industry which would mention How the Covid-19 is affecting the Industry, Market Trends and Potential Opportunities in the COVID-19 Landscape for one of the key
players, Mattel.
On February 1, 2011, Mattel declared the buying of HIT Entertainment. Which category of mode of entry was this, thoroughly analyze?
Content: Critically apply theories and concepts learned in Chapter 1, 2,3,4,5 and Business Model Canvas as a framework for analysis, judgment and recommendation.
For additional information, conduct Internet research to obtain it. The article provides valuable information, but you should go beyond this information and add own ideas and concepts, underpinned by academic references. In this assignment, you will demonstrate your ability to conduct secondary research. Sources: Please note that you must clearly identify all sources, including the internet, and that you should communicate your thoughts in your own words/diagrams/images rather than reproducing the material of others. Failure to do so may lead to an allegation of cheating. The use of online collaborative encyclopedias such as Wikipedia is not acceptable.
Academic Writing: You will be graded on the quality of your writing as well as the content, i.e. how you write as well as what you write. This will include:
The ability to present your material in an appropriate format (Answer Every Question)
The ability to conduct secondary research.
The ability to present your work in grammatically correct English (sentences, paragraphs, apostrophes etc.)
The correct use of references based on APA referencing.
APA formatting be followed adequately and accurately throughout the paper.
Handing in: It is essential that you submit your work, in order to be able to pass the course. You should submit your work by the10:00 pm deadline by 6th April. Students are expected to plan ahead to meet deadlines. In this course, submitting assignments late will be penalized. For each day late, 10 percent will be deducted from the value of the assignment.
Word Limits: No word limit.
Plagiarism: As per rule, the content written with 10–15% plagiarism is acceptable.
i. Analyse the trends impacted Toys R Us negatively, which led to ultimate closing down of the chain.
The organization was forced to recruit debt management experts last year simply because of fears over the preservation of brick-and-mortar shops. The crisis got worse, with news that bankruptcy was being filed, which frightened customers and forced the corporation to request legal protection with over 40 per cent of them halting shipments. This sudden downturn made it impossible for retailers to find a way out without a timetable for debt restructuring. As the chain accounts for about 15% of American toy sales, the liquidation would be a massive blow on the toying market, plus retailers were happy to take a risk with new goods and small companies. Generally, larger rivals such as Walmart and Target will be conservative. This year, Toys 'R' Us and Babies "R" Us is launched with more than 800 companies throughout the United States (CNBC, 2018).
Toys R Us could not keep pace with the developments that were happening in the corporate community. Aside from its rivals who used technology and creativity to cater to the young generation's changing tastes and purchasing patterns, the firm also lost its traction. But, as Toys "R" Us did not deliver on the market, as suppliers like Amazon, provide transfers to online shopping areas more quickly for bingers, as they are available 24x7, 365 days a year, without having to drive from home, access to more detail on the toy, and much better safety in the transaction.
ii. Identify why Toys R Us lost its business to the competition and recommend what could have been done to fix it (this part of the analysis should exclude the Impact of COVID-19 crisis).
Several decades ago, Charles Lazarus wins his competition such that, due to its scale, he succeeded in achieving low-cost toys which, with added benefits in the supply chain, he passed to the consumer's end price. This same recipe, used by supermarket companies such as Walmart and Target, gave Toys "R," even more since2017, while toy providers like Lego, Mattel and Hasbro, even more stringent before their reorganization with the Bankruptcy Law was announced. Besides protecting the company's integrity, the tactic to win a war is to show a difference (CNBC, 2018). The strategy to survive a war is to show a difference in the shopping experience which retains the loyalty of its customers in addition to defending the credibility for the company
This evidence shows that the price is not the only factor to determine the balance of the shopping. Former Toys "R" shoppers pay second price for convenience or a great buying trip. The convenience of shoppers is of benefit to traditional retailers because the combination of physical and Online Shop choices is strong. With the impending competition both for prices and online shopping, it is essential for major retailers to take account of their consideration and to concentrate on fulfilling their demands.
iii. Write your analysis on the Impact of COVID 19 on the Toy industry which would mention How the Covid-19 is affecting the Industry, Market Trends and Potential Opportunities in the COVID-19 Landscape for one of the key players, Mattel.
In the other hand, Mattel will soon gain the status of a local corporation and the value of local business expertise, a proven customer base, and will be considered as a local company by local governments. The effect on the toy industry worldwide has been enormous. While Chinese factories partly recovered their operational capacities, the current supply chain breakdown has led to delays in the delivery of some goods with previously fixed deadlines and increasing demand reduction.
Fairs and competitions in the toys sector have also been cancelled and postponed. While the major fairs had been good earlier this year, the threat of the virus also arose, resulting in a decrease in attendance at the Toy Nuremberg International and the New York Toy Fair. The same applies to the entertainment industry where filming and premières of connected toy lines have to be replaced or reprogrammed. Movie theatres have been one of the most affected as a logical effect of the prevention measures adopted, making them the only option for home entertainment with platforms like YouTube and Netflix which certainly felt the increase in consumption hours already.
Most noticeable is the Disney's Mulan Live Action movie, but whose toy line is still on sale and perhaps absolutely no one buys. Still, other significant activities have been postponed, including La Toy Milano and the Licensing Expo; in E3 (the largest video game event) it cancelled and the possibility of organizing an "on-line exhibition" is still being reviewed in order not to leave exhibitors and fans out. The same applies to the animation industries where filming and premieres of connected toy lines have to be put off or reprogrammed (Reece, 2021). Film theatres have been one of the principal effects of the policies introduced to discourage home entertainment, making home entertainment the sole choice for channels such as YouTube and Netflix.
iv. On February 1, 2011, Mattel declared the buying of HIT Entertainment. Which category of mode of entry was this, thoroughly analyse?
Mattel Toys, the global pioneer in toys, has devised a more comprehensive and proactive distribution policy for market attraction they buy of HIT Entertainment company. Mattel is purchasing a $680 million in cash from a group headed by Apex Partners, valued at 9.5 times its profits before taxes, from the biggest independent owners of pre-school intellectual property. In an effort to reinforce their retail footprint and increase their market penetration, approaching millennium parents. This is a far smaller figure than the price tag of $1.5 billion recorded at the time of HIT sales almost a year earlier. In the first quarter of 2012, it was anticipated that the deal will be concluded and that Mattel would not have a significant effect on its 2012 income (Business Wire, 2011) This acquisition reinforces the preschool status of Mattel and provides many new prospects for global expansion with Thomas and other brands with potential for innovation. The transaction is first big since the 1990s, when Fisher-Price was acquired in 1993 by Mattel, 1996 by Tyco Toys, 1998 by American Girl. In addition to that, the acquisition would enable Mattel to extend HIT brands through multiplatform, live entertainment and joint brands such as Barbie, Hot Wheels and Monster High.
References
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