Description / paper instructions
www.delhivery.com or www.pomelofashion.com
Structure for the Assignment:
Analyze your chosen company through the lens of Business Model Canvas.
Give 3# specific recommendations to the CEO for next steps. Support your recommendations with data and insights from Trusted sources. Cite your sources. Please be crystal clear specific and detailed. Your recommendations can also include ERRC/ Blue Ocean concepts.
At your discretion can you apply insights from EuroMonitor/ IBISWorld / PitchBook, WSJ and other Trusted sources to support and strengthen your analysis and recommendations? Be crystal clear in your source annotations.
Connect the RED threads of: Company and Industry details, Business Model Canvas, Blue Ocean and EuroMonitor/ IBISWorld / PitchBook and other trusted Data sources.
TOTAL Length of your Word Document: 4# pages: Includes Business Model Canvas and 3# Recommendations. Microsoft Word Document ONLY,
Supporting Microsoft Excel sheet – which has Data and summary of the analysis ONLY.
Excel should include at least one multiple regression, one bi-variate regression, and additional company / industry / relevant data. Charts need to be created and formatted as well. Please note that no more than 2# Images can be included in your analysis. All your recommendations need to be strongly supported with Data Analysis done in Excel.
Excel summary analysis should be only to explain your analysis in Excel. You should refer to that analysis in your recommendations.also include excel files analysis you use for your recommendation with multiple regression chart and bi variate the writer has the choice for the company I also upload the excel file analysis you can take as example fume the previous case with the recommendation and I will also upload the business model canvas temple you have to to before the recommendation it must be 1 page or 1 page and half for the model canvas. let me know if you need data for the excel file analysis because it is really important part of the grade. the writer has the choice for the company. let me know if you have any question.
Hult International Business School
A Blue Ocean Analysis of Hasbro
By
Tochukwu Jude Ekeh (Cohort 1)
Submitted on
This 9th day of Feburary 2020
To
Professor Maithily Erande
TO: Brian D. Goldner (Chief Executive Officer)
FROM: Tochukwu Jude Ekeh (International Business Analyst from Hult International Business School)
DATE: February 10th, 2020.
SUBJECT: Blue Ocean Strategy Analysis of Hasbro (herein referred to as the Company).
Industry: Toy, Sporting and Recreational Product Manufacturing (Primary)
Total Asset: The total Asset of Hasbro in 2018 is (US Dollars) US$5,554.6
Annual Sales (Revenues): The company reported revenues of (US Dollars) US$4,579.7 million for the fiscal year ended December 2018 (FY2018), a decrease of 12.1% over FY2017.
Fiscal year ends: 30 December 2018 |
Fortune 1000 Rank: 567
Exchange: NASDAQ
Stock price:7 (01-24-2020) |
Brief Bio: Hasbro Inc (Hasbro) is an entertainment company that designs, manufactures, and markets toys, games and consumer products. The company markets various products under various licensed brands and produces television programs and films through its subsidiary Hasbro Studios. Hasbro sells its products to wholesalers, distributors, chain stores, discount stores, drug stores, mail order houses, catalog stores, department stores and other large and small traditional retailers and to e-retailers. |
Source: D&B hoovers and Wall street journal
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Positive |
Negative
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Internal Organizational Attributes
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Strengths:
- Geographic Presence
- Liquidity Position
- Brand Value
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Weaknesses:
- Dependence of Limited Customers
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External
Environmental Attribute |
Opportunities:
- Launch of New Products
- Focus on China
- Positive Outlook for Global Toys and Gaming Market
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Threats:
- Labor Costs in US
- Market Competition
- Foreign Exchange
- High purchase price
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Source: D&B Hoovers.
- Analysis: Improving Sales- The company recorded a fall in sales price of over 12.1% from the ending of the fiscal year in 2017. In 2018 it recorded US$4579.7, lower than US$ 5,204 in 2017. (See sheet A on excel)
Similarly, the cost of goods sold dropped by 9.03% from the 2.39% growth it recorded at the end of the fiscal year in 2017. In 2018, it recorded US$2271, lower than US$2496 recorded in 2017. (See source in sheet A)
- Reason: The reason for a decline in sales/ revenue of the company is due to an overall decline in the industry sales growth (see source in sheet B) as a result of the following:
- The high level of competition: Domestic toy operators are forced to reduce their prices to compete with inexpensive imports sourced from developing countries with low labor costs.
- International importation of toys into the Market: These imports are expected to account for an overwhelming 98.6% of domestic demand in 2019. (See source in sheet C)
- High Purchase and labor cost: Purchase price accounts for 47.0% and the labor cost accounts for 16.0% (See source in sheet D)
- Recommendation: The company can use one of the Blue ocean strategy concepts which is a “Strategy Canvas” to improve sales/ revenues in the future. A Strategy Canvas is a method of analyzing how the company’s competitors gain/attract customers, and/or how our customers choose the product or service they buy in our category. With this canvas the company can then differentiate itself by choosing a different set of factors to compete with. (See Excel Sheet C)
The company should increase its price higher than the industry price; amass links with suppliers; adopt new technology (that will create value for customers); improve quality standard above industry index and move manufacturing to china thereby reducing cost and wages.
To create new value and decrease purchasing cost, it should make use of recycled materials from recycled toys; create innovative electronic board games (since customers prefer the traditional board games); and in marketing, the company should create a marketing strategy, and diversify its customer base.
- Analysis: Increasing Customers Base- Until the introduction of electronic and interactive toys, industry manufacturers largely operated in a saturated product market, differentiating themselves from competitors through price, product range, availability and play value. Also, the bicycles, board games and outdoor sports are some of the most popular fun activities for all kids and adults. Since the toy manufacturing industry excludes these set of customers, they compete for limited disposable income.
- Reason: Many children and teenagers play sports in teams or clubs for fun and exercise, which makes outdoor sports a source of external competition to toys and dolls, both for children’s attention as well as their parents’ discretionary spending.
- Recommendation: The company should reach beyond existing demand and convert customers by creating value for many customers. I will recommend that the company focus on developing new value products that address, “Soon to be non-customers”, “refusing non-customers”, and the “unexplored noncustomers”. The company can convert kids who love to play outdoor sports and games. The company can achieve this by developing marketing partnership with these outdoors sporting events to promote their product and to reach and convert these set of customers. A classic example is Porsche sponsoring the Formula 1 racing competition. The company can also innovate interactive sporting games that can be set up outdoor.
- Analysis: Getting the Strategic Sequence Right – In order to get the strategy right, the company must follow a sequence in improving buyers’ utility, affordability, profitability and implementation.
- Reason– In other for the company to implement other Blue ocean strategies it needs to get the sequence right.
- Recommendation:
- Buyers Utility: The company can increase customers utility by making use of recyclable materials. The new toys will be made from old toys or plastics and other waste. This will save the company purchasing, utility and wages cost. It will also create value for its consumers who care for the environment. (See source in Sheet E)
- Strategic Pricing: The company will be in the best position if it starts with a premium price to attract early consumers. It should then gradually drop it prices to attract mainstream customers. The company must set a price that will capture the mass of target buyers from the very beginning. This will maximize profits, accelerate growth, build reputation and brand loyalty.
- Target Costing: The company must not let cost dictate prices. It shouldn’t lower utility to match cost. If the company does any of the following it will jeopardize mass adoption and buyer’s utility.
- Cost adoption: A change in the company’s strategy may trigger some stakeholders and shareholders. The company will have to address the concerns of stakeholders and shareholders. This is a big barrier to adopting the blue ocean strategy. (See source in Sheet E)
Conclusion
The company’s ratios are looking good and above industry and sector range. However, the total debt equity, net profit margin, return on asset, return on average investment and return on equity, are lower than the market range. The decline is not much and there is still an opportunity for the company to improve these ratios and keep them above the Sector and industry range. (See source in sheet F)
Hasbro’s profitable future in the toy industry will depend on the implementation of these blue ocean strategy recommendations. A sequential implementation of this strategy, will result in profit generation, increase customer value and give the company a competitive advantage among its competitors.
Reference
All figures and statistics were sourced from these four research tools.
- D&D Hoovers
- IBIS World
- Pitch Book
- Wall Street Journal
The Business Model Canvas
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