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.