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Question 1 - Mattel & Toy Recall (a)

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Question 1:
From the case, the characteristics of the toy industry: 1. Seasonal Demand

Demand for toys is usually correlated with festive celebrations in a country. One close example is Christmas day which falls in December annually. Coincide with this celebration, significant portion of the toy’s annual sales usually happen towards the end of the year especially in those countries that are dominated by those that celebrate Christmas.

The impacts of the seasonal pattern towards the industry are critical as most manufacturers have to consider several factors that lead to sales. The huge demand at certain period of time requires thoughtful planning and smooth execution as minor mistakes can lead to loss of millions of sales value. Just imagine within short period of time toy manufacturers have to produce millions of toys. This requires good management of supplies and synchronization between supplies and production as to minimize costs and ensuring efficiency. Not to forget issues of quality management and lastly the impacts or magnitude of logistic management to the toy manufacturers.

2. Stiff Competition

Basically the toy industry consists of many players. As stated in the case, there are 880 companies operated in the industry in 2002. This is 10% lesser than 1997. There are few Key players in the industry such as Mattel, Hasbro, RC2, JAAKS Pacific, Marvel and Lego. In term of sales only two companies managed to register USD1 billion marks, the company are, Mattel and Hasbro. The combined sales of this two company reached USD8.7 billion.

There are many players competing for the same market. Throughout time small companies have close their business or have been taken over by bigger player. Meaning we can see the industry moving towards consolidation mode due to stiff competition among the players. In fact among the industry leaders, in…...

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