Toy manufacturing industry – conclusion

Various factors influence the performance of entities in a given industry. This paper makes an analysis of the toy industry to access its attractiveness. Macroeconomic factors influencing the toy industry include political issues that strain trade relationship between Asia-pacific countries and the U.S and Europe, economic conditions that reduce households’ disposable incomes and sociocultural factors that lead to frequent changes in customer preferences. Other factors include rapid changes in technology and the legislation governing consumer safety and advertising to children.

The competitiveness in the toy industry is a core determinant of performance of firms in the industry. Due to considerable threat from substitutes, moderate buyers’ bargaining power and high competitive rivalry, small players may fail to reap adequate returns from the industry. Since most market players target the same market, the core competitive advantage could rest in product differentiation to provide multiple alternatives for such a market. Rapid changes in consumer preferences also shorten the product lifecycles for toy manufacturers thus requiring high innovation potential for entities to achieve growth. Additionally, firms in the industry could enter into licensing partnerships to expand into regions where their distribution network does not reach.

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