Business Plan for Kids Toys
The Business plan will look at the launch of a new product. Its product name will be Hollywood Star. The product has a number of features that will make it stand out from the rest of the tots currently being offered in the market. The product is meant for children that are between the ages of eight and thirteen. Barney (1997) ascertains that when introducing a new product in the market there are several issues that need to be addressed: A business should consider all the internal and external factors that will affect production.
This can be done through the 4c’s, SWOT analysis and Porter’s five forces. After these issues have been critically examined then the entrepreneurs ought to come up with a mission, vision, name goals and objectives of the Company. Also, all legal matters need to be adequately catered for. After this, the entrepreneur ought to consider all of the management issues that will affect the organization. Then segmentation, research, strategy and other marketing issues should be incorporated. On top of this, location and the most important of all a budget must be made for the given product.
2. 0 Industry analysis 2. 1 Definition of the industry The Toy industry is one of the most profitable areas to engage in business in Australia. This is because of the fact that there is a lot of room for creativity in this industry; therefore entrepreneurs can be able to come up with their own products and offer something unique to the market. However, this trait is not something that is possessed by all businesses that enter the industry. This has brought about a lot of replication and imitations.
The industry employs a lot of human labor and technology during production and therefore necessitates proper planning before embarking on a project as explained by Barney (1991). 2. 2 Size, attractiveness, growth rates and trends in the industry The industry is a large one; it has been in place for a very long time now. The Toy industry covers the whole country and even goes beyond the countries borders. It should also be noted that the most lucrative toy Companies are not found within the Country and mostly come from Asian countries like Asia and Japan.
The growth rate is also quite high. About fifty years ago, the industry was quite basic, it was not considered as an industry on its own but fell under the luxuries section. But much has changed since then; the economy has grown and parents consider toys as a priority for their children. Increased advertising and aggressive marketing has cause the growth of this sector. The toy industry has been characterized by growth in market share for relatively new companies in the trade. This means that the intended Company has a high likelihood of surviving in the industry
Industry segmentation There are various ways in which the toy market has been segmented. Some of theses are; Gender segmentation; here, toys are made according to what fits a particular gender. For example, there are toys that are suitable for boys like water guns and cars, while others are suitable for girls like teddy bears and dolls. Size segmentation; there are some toys in the market that are quite large and macro in nature. One such example is a house which a child can play in. then there are some that are small in size.
Segmentation based on special features; some toys have something unique in them like those ones that can record, play music or make specific moves while others are simply ordinary and have no special features added on to them. Segmentation based on type; there are some toys that are made after influential people in children’s lives like cartoon characters (Dexter, Simpsons and Mr. Poodle), pop singers like Britney spears and Jessica Simpson or action figures like Spiderman and Superman. They are some that are based on animals or things.
For example mobile phones, bears, dogs, balls, musical instruments etc. 2. 4 Competitor analysis The toy industry is one of the most competitive industries in the Australian market today. Competitors have realized that children are a very responsive market target. Besides this, the market is liberal and Companies only need a patent and can start their business. Competition is also hard because there are a lot of toy imports from Asian countries that are flooding the Australian market currently. On top of that competitors are very creative when coming up with marketing ideas.
2. 5 Situational analysis 2. 5. 1 Porter’s five forces Porter’s five forces are essential in determining the degree of market penetration of the given Company or the strength of a particular market strategy as stated by Porter (1985). This is done by examining five key areas. 2. 5. 1. 1 Degree of rivalry; The new toy Company that will be introduced has to face a high degree of rivalry among other toy producers. To cope with this, the Company will have a unique, creative and solid product that it will be offering.
Secondly, the Company will use low prices to boost sales and lastly, it will employ creative marketing ideas to stand out from the rest. 2. 5. 1. 2 Threat of substitutes; Porter (1985) explains that threats of substitutes occur when products from another industry have the potential to replace those ones being offered by a specific Company. Fortunately, there are not very many industries that can substitute toys because the main function of toys is as play items for children. However, the entertainment industry through CDs and DVDs has a slight capability of achieving this.
3 Bargaining power of buyers; Because toy companies in Australia are many, yet the target group is the same, buyers have high bargaining power. The Company will use aggressive marketing skills to deal with this. These include creative and captivating advertisements both on the internet and in children’s events. 2. 5. 1. 4 Bargaining power of suppliers; Suppliers also have relatively high bargaining power. This is because raw materials for production of toys like plastic, paper cuts, glitters and fibers are used by other industries apart from toy companies thus giving suppliers an advantage.
Risk of new entry; The Company will also face this threat because there are no strict laws that prohibit entry –one simply needs to fulfill their legal obligations like getting a patent. 2. 5. 2 SWOT analysis- Anthony (1998) explains that this is done to asses internal and external; factors that affect a Company. 2. 5. 2. 1 Strengths; The Company has an exceptional product on offer. Besides this, it will also offer other toys in the future. It will sell its toys at affordable prices, employ creativity in marketing and will maintain high product standards.
2 Weaknesses; Because the Company will be relatively new, it may not have a strong brand image to fall back on. There are also some financial constraints that it has to deal with initially as there are no profits at the onset of business. The Company will also face competition from well established names in the toy industry like Barbie. But all these will be offset once production is underway 2. 5. 2. 3 Opportunities; The Company can take advantage of being new in the toy industry to establish itself. It can sell itself as being unique and may thus secure a strong market base.
It should also make use of technology in production. Also increasing market share is another opportunity. 2. 5. 2. 4 Threats; There have been cases of negative publicity where some toys have been labeled hazardous. Also, the government could impose restrictions on labor and technological use in toy production. Other competitors could copy their product and gain mileage over the Company. But it can deal with this through fulfilling all labor laws and ensuring that all supplies meet their legal obligations as suggested by Anthony (1998).Sample Essay of 7essays