Threat of Substitutes Substantial product differentiation Toys When products and services are very different, customers are less likely to find comparable product As the oil prices collapsed during the financial crisis init was easier for new entrants to get resources. Since they will be buying in such bulk, it leads to great price discounts and if a price war were to break out the dotcoms will be at a disadvantage because they will be buying from suppliers at such higher prices.
I never worked for lego… It is an extract from my work at university. Vertical Integration refers to a strategy of acquiring control over additional links in producing and delivering products. Porters 5 Forces Analysis Substitutes pressure very high: Lego has a strong brand image and brand loyalty among customers and can charge premium prices.
Kids like to play with what they see in the cinema, such as with Lego Harry Potter. High competition among suppliers Toys High levels of competition among suppliers acts to reduce prices to producers.
Children get bored fast and switch to substitutes. The number of consumers who shopped for toys or games on the internet in the U. Manufacturers recognize the need to capitalize on franchises that span multiple platforms, resulting in products ranging from cartoons to video games to movies to actual toys.
The squeeze is especially painful because toy sales are seasonal. Between andToys R Us generated an average of 43 percent of its total annual revenues during the fourth quarter. Lego is therefore clearly pursuing on a product focused strategy. Check out our entire database of free five forces reports or use our five forces generator to create your own.
Chinese products are often not as thoroughly controlled for quality. Parents know Lego because they played with it themselves. If a company entering an industry can also enter a global market, then it is attractive.
This text provides general information. The threat of substitute products also comes into play concerning industries. The Five Forces Model can also be used to evaluate the attractiveness of an industry. Future growth is expected to be stable and low, although growth in children aged below 17 is expected to grow by 9 percent bywhich may help.
The degree of vertical integration also influences the attractiveness of a company. In addition, the product is easy to copy. Finally, the fifth of the five forces has to do with the extent of rivalry among existing firms within the industry.
The pressure from customers is high. In the toy industry not one supplier holds a critical component for the toy retailers.The Five Forces Model can also be used to evaluate the attractiveness of an industry. This model suggests that the structure of an industry will have an impact on the conduct or competitive behavior of the firms in that industry.
Toy Industry - Statistics & Facts The global toy industry is a billion-dollar industry dominated by five main players: Mattel, Namco Bandai, Lego, Hasbro and Jakks Pacific.
Porter 5 Forces Toy Industry. Porter’s Five Forces: Travel Agency: Industry Rivalry: Highly Fragmented Industry with Intense Rivalry Highly Fragmented Industry. Mattel has experienced five straight quarters of declining sales and missed earnings expectations, which have cut the stock value of the company nearly in half since The toy industry as a whole, however, has actually grown over the past year, with industry rivals gaining market share at Mattel's expense.
The Toy and Game Industry Analysis. Porter's Five Forces-Hasbro and Mattel Games-Both have grown by purchasing other companies/licenses Industry Leaders The Toy, Doll, and Game Industry-Major products are electronic toys, non-electronic toys, dolls, and board games.
Consumer research firm NPD estimated toy industry revenues to be $ billion, although the Toy Industry Association pegged total industry revenues at $22 billion.
The TIA estimated industry growth to be 2 percent, while NPD estimated it to be negative percent.Download