Toy Companies Attempt to Cut Production Time to Market

Toy Companies Attempt to Cut Production Time to Market



Today, social media continues to influence various industries and force companies to adjust their supply chain management.  This produces substantial effects in different industries and businesses across the world.  Daily transforming trends force these businesses to keep current and adopt to the new popular idea.  Clothing companies like Zara succeed in this as the brand is well known for quickly adding new styles directly off the runways.  In doing so, the customers remain pleased and excited to discover the new style and purchase items on a regular basis.  The toy industry is also significantly impacted by changing trends driven by social media.


As children increasingly spend more time playing with electronics, toy companies have to remain on edge and aware of the present fad.  The toy industry, worth $27 billion in the US alone, has struggled to cope with long-lasting demand declines due to the rise in electronic activities.  Video games have attributed to a “Gaming Addiction Disorder” that is very prevalent in millennials and shared by over 10% of all children worldwide (WSJ).  This large population has consequently placed a hindrance on the toy industry, weakening demand and further forcing toy companies to produce serious turnaround.  Mattel Inc. is one major company whose stock price has been seriously affected by the video game explosion.  Mattel along with other similar companies attempt to follow the current demand curve and create and organize products appropriately.


In order to attain this competitive advantage, toy companies work to diminish production time in order to capitalize on these fast moving children game trends.  The toy industry traditionally relies on Christmas to get their products into store.  Now, with this adaptation technique, they will attempt to land their products in stores on a weekly regular basis.  However, toy trends “spike and dissipate quickly,” so the companies must achieve rapid turnaround to make any sort of profit (WSJ).  This demand is uncertain, so a consistent over watch of the current market landscape is necessary to make correct and efficient decisions in altering the supply chain.


For example, in 2015, the new Star Wars movie opened.  The Star Wars brand was just purchased by Walt Disney, so toy companies had to race to regain licensing and produce toys rapidly to meet the incredible new demand for Star Wars related toys.  Another example would be the millennials new obsession over last year’s water bottle flipping activity.  MGA Entertainment Inc. jumped the gun and quickly developed a toy that simulated the unheard of hobby.  In order to keep up with unplanned and sporadic trends in the toy industry such as the previous two examples, companies such as Hasbro and Mattel have developed specific management teams to directly focus on examining social media, discovering the new trends, and turning those interests into toys.  Hasbro’s “Quick Strike” team does just that by studying hashtags and developing ways to produce reciprocal toys in the fastest way possible.






9 thoughts on “Toy Companies Attempt to Cut Production Time to Market

  • February 20, 2018 at 4:48 pm

    The toy industry is changing yes, but not only in relation to the social media. A few years ago a toy was something tangible, something that needed to be manufactured. But today, many toys have been changed for video games and many other electronic toys. So, the supply chain of this industry has been modify, by decreasing the production units and increasing the social, technological and innovation units. Toys R us, for example, has developed a video game store; different than its tradtional onces, because they have relized that kids today are demanding these kind of games. They even have a website where you can search any videogame they have, and buy them, or just look at the price. In their catalog of 2017 I can see that many of the new toys are electronic.
    So this new trends are affecting the supply chain, because managers need to managers need to restructure the process, maganage the capacity in a different way. Now they will spend less capital in the manufacturing units, or, if they do not have these unitis they will buy less products for suppliers. And they will increase the capaital investing in departments that focusses on developing new kind of games; also study the new trends by, for example, studing what the social media is saying.

  • February 20, 2018 at 7:59 pm

    It is hard to imagine how the toy industry keeps up with the demand from its customers. The explosion of social media means that a new icon becomes children’s favorite every single month. Currently, it seems that a downtime for the movies is a downtime for the toy industry as well since most toys’ sales are based on movie characters ( The evidence of this trend is the latest Black Panther movie that has broken various box office records and has become a children’s favorite. The first commercial for the Black Panther gear and toys was aired on 4th January, more than a month in advance of the release of the movie ( Therefore, it can be assumed that movie release times are the peak sales time for most toy companies. I can imagine how hard it would be to manage capacity issues during peak and off-peak times. Excess capacity in one period might become insufficient during peak sales time. One solution for this problem that comes to my mind is for toy companies to diversify into other markets so the excess capacity can be used during off-peak times for production of other products which might ensure consistent profits throughout the year. I would be interested to know what other solutions people have in mind.

  • February 21, 2018 at 6:33 pm

    Not only have toy companies had to change the types of toys they sell, but they’ve also had to change the way they sell toys. Toys R Us is a great example of this, considering their recent bankruptcy in September. In the past, toy manufacturers would advertise how their toys would be available in Toys R Us. It was a major selling point since so many kids would beg their parents to go to the giant store filled with any and every toy. Despite the fact that Toys R Us is developing a business plan to be back in business by the next holiday season, their sales this past holiday season were lower than expected despite their massive going out of business sales. In response to this, toy manufacturers no longer want to have their products in Toys R Us because the store just doesn’t get as much traffic as it used to. Part of this has to do with what Andrew said, in that since more toys are electronic, there is no need to go to an actual store to buy them. So, as toy manufacturing companies decide to switch to electronic games, they have also made moves to switch the way they sell actual toys. Last week at the North American International Toy Fair, many toy manufacturers made the announcement to diversify stores. Instead of selling at one giant retailer, like Toys R Us, they will spread their products out at multiple retailers such as Target and Walmart. This plan works well for a number of reasons. First, since actual toys aren’t as popular anymore, they can have smaller stocks available at each store. Second, as Carmen mentioned, smaller stocks means the toy manufacturers can keep up with social media trends and release toys more quickly. Third, as large retailers continue to close their doors, having products at multiple retailers diminishes the risk for the toy manufacturers. Lastly, places like Target and Walmart sell things other than toys so there is free advertising as parents and kids walk through while doing other shopping. I think it will be interesting to see if Toys R Us can bounce back from the bankruptcy as they plan to do. I think it will be hard.
    Outside research:

  • February 21, 2018 at 6:48 pm

    From my experience working with kids, it appears as if their attention spans are becoming shorter yearly. This is one reason that kids shift their interests to video games, and away from toys. With video games, kids can play a new game every hour. However, with the toy industry: if a kid buys a toy, they need to keep playing with that same toy and can quickly become bored with certain toys and discard them. This could be why the toy industry is greatly hurting. A solution is needed and I do like your comparison to Zara. It can be extremely beneficial for toy companies to cycle toys to different stores around the country and make each toy appear as if they are of limited edition. This could be beneficial because it appears as if toys go in and out of style very quickly (for example: fidget spinners, Star Wars toys, etc.) In order to implement this style, companies would need to implement a time competitive priority and use a batch process in order to get these products to market. If nothing is done, we can see a continued decline and low growth in revenues of the U.S. in the toy market that is shown in this graph ( While the economy as a whole has been booming since 2005, the revenues of the toy retail sales in America has slightly declined from 2005 to 2016. I do not think the toy market as a whole is dead, but some changes need to be made in order to keep up with the video game industry and revitalize growth in the toy industry.

  • February 21, 2018 at 7:06 pm

    As previously mentioned toy sales have been extremely dependent on the popularity of movies. This highlights the difference between two major toy manufacturers, Hasbro and Mattel. Hasbro has strategically aligned itself with extremely successful franchises that include Star Wars and the Marvel comic’s world. Mattel has in the past failed to generate this connection and as a result its stock price has performed extremely poorly in comparison with Hasbro’s over the past few years. These connections have been so extremely fruitful for Hasbro for several reasons. Both of these popular movie franchises produce new films very frequently and often perform well in the box office. The predictability of this success allows Hasbro to structure its production in a way that makes it possible to have the toys available when necessary and move on to the next big thing at the appropriate time.

  • February 21, 2018 at 9:01 pm

    I think another issue alongside the increase in technology as a replacement for toys is the age kids are beginning to have phones and video games. An article I found shows the average age kids are getting their first smartphone is now 10.3 years old, and this was from 2016 so I’d imagine the average age has dropped even more over the last year. This adds even more pressure to toy companies to adjust their strategies. Yes, they can rely on movies and television to spur demand, but the demographic of kids even buying toys as whole is changing and I think there’s only so much these companies can do to change this market trend. I do think bringing up the importance of social media is very valid however, as with kids having greater access to Facebook or Instagram, I think we will see a shift towards even higher levels of social media advertising to try and regain sales. The toy industry is certainly changing, and some aspects of that I believe are inevitable, so toy companies must be ready to adapt over the course of the coming years.


  • February 21, 2018 at 9:35 pm

    I think one very important development to mention is the recent bankruptcy filing by Toys R Us. The problem isn’t with the retail itself but with the inability of traditional firms to adapt new models like you said. Because transactions can happen any place and at any time, physical locations need to do more than just have endless aisles with easy checkout lines and plentiful cash registers. For example, brands like Apple and Warby Parker are excelling both online and in brick and mortar stores. These companies do mainly e-commerce sales so their physical store locations are more experienced based and are designed to offer services while building relationships. Aside from decreased production times and keeping up with the current trends, maybe Toy Companies should also be looking into redesigning their in-store systems to be more relationship based. For example, allowing customers to test out and play with toys or maybe going them an opportunity to actively contribute to the design and creation of new toys. If Toy Companies don’t make a significant change soon they will all be following in Toys R Us’ footsteps.

  • February 21, 2018 at 10:07 pm

    There are certain aspects about this model of comparing toy companies to a company like Zara that draw challenges. In terms of fast fashion, many of the garments that places like H&M or Zara are able to have on their store shelves in a matter of days following a celebrity wearing a similar item require marginal design and planning. When it comes to a toy- tangible or digital, a significant level of design and engineering must go into developing these products. The equipment that produces these toys must then be modified to produce the unique item that has been designed.

    As many have mentioned, social media has heavily influenced the wants of consumers. It also gives more consumers deeper access into what exactly the latest trends are. As more companies market through this platform, the result is a much shorter time that products are in top demand and a much longer line of products trying to make their way there. Furthermore, as the article mentioned, this requires a much more nimble and adaptable product development strategy. For companies to achieve this, I believe it will come down to longer term partnerships and strategies that can streamline the licensing process for content-oriented products and team with media in order to achieve an overall higher outcome for both parties involved.

  • February 21, 2018 at 10:30 pm

    Andrew, I think it is quite relevant that you have chosen to focus on the toy industry, especially since articles have just been posted today about how Toys “R” Us Inc. plan to close another 200 stores affecting the lives of numerous employees and even corporate staff members. It is clear that the toy industry is failing as you mentioned. However, one gaming company recently introduced a product that not only boosted the company itself, but the gaming industry as a whole. In March of 2017, Nintendo released the Nintendo Switch, which became an immediate success selling more than ten million units in nine months. Through process improvement, new product development, and research and development Nintendo was able to introduce a product that made customers happy. After the flop of their smartphone gaming app, Nintendo realized it had to improve its processes and the product completely. Nintendo created a TV console and a portable console allowing gamers to play at home, pause at any moment, get up and go and continue playing the game right where they left off. The consideration of consumers’ busy lives with their love for games (i.e. the time strategy) is what boosted Nintendo to success.


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