Toy Industry Five Forces Analysis

Five Force Analysis of the Toy Industry

After World War II and with the creation of television the toy industry flourished. There are several factors that contribute to the continued growth of the toy industry such as: engineering and technological innovations, increase in annual income wages of the middle class, and assembly line production. Dominated by five main companies: Mattel, Namco Bandai, Lego, Hasbro and Jakks Pacific, the global toy industry is a multibillion-dollar industry, which generates online revenues exceeding 21 billion USD a year (Statista, 2018). As technology continues to rapidly grow so do the innovative ideas. For instance, the creation of a 3D printer, a device allowing consumers to produce products on their own,

3-D printing threatens existing businesses, while bringing new opportunities to consumers and new businesses. The tables will turn with the bargaining power of consumers. Consumers in possession of a 3-D printer are given the opportunity to be considered a manufacturer. Creating customized replacement toy parts or additional pieces, gives consumers more leveraging power, making them a huge threat to the toy industry. The threat of substitute products will remain very high. Consumers with a 3-D printer can customize and modify original pieces to adapt to their personal needs. The bargaining power of suppliers would increase because there would be less need of suppliers. Consumers can create items to their specifications. The threat of new entrants would also increase. New businesses can establish themselves as manufacturers for customers. Customization, costs savings, and rapid delivery speeds from new businesses question larger manufacturing facilities. With the new entrants into the industry, the threat and competition between sellers remains intensely high because of all the newly added disruptions. Several of the five forces analysis results changed when comparing the entrance of 3-D printing to the toy industry. It shows that the arrival of new technology both can simultaneously represent opportunity and create

One example of enhancing other industries is using the 3-D printer to create prototypes which is much more cost effective for companies. Not only will it cost less, using 3-D printers also speeds up the manufacturing process, which speeds up business. The ability for companies to be more innovative without worrying about additional costs for complex designs is also an enhancement. 3-D printing can reduce the massive amount of left over scraps from manufacturing products. 3-D printing can eliminate the excess scrap materials by theoretically producing zero waste; this which, creates a healthier greener planet Earth. The first 3-D printed gun is already in existence. Machinery and replacement parts needed for the military are in great demand. It is only a matter of time that the military industry will be enhanced by 3-D printing weapons and