Galaxy Toys is a toy manufacturing firm specializing in space-related toys. The company has been in business for sixty years and has established itself as an industry leader in the manufacturing and sale of toys. Galaxy Inc has been able to achieve and sustain exceptional growth in both sales and production through its principal product, NASA-related toys. According to statistics, the toys business in the United States rose by 5% last year (Guyduy, 2017). The corporation, on the other hand, faces substantial issues that must be addressed in its two-year planning process. The challenges include changing preferences in the toy market, ways to minimize operating and production costs, as well as how to attain sustainability goals. One planning tool that could be applied to address these challenges is a SWOT analysis. This planning tool identifies the strengths, weaknesses, opportunities, and threats that could impact its ability to achieve the set goals. From this analysis, the company can focus on its strengths, seek ways to address areas of weakness and potential threats, and devise ways to maximize its opportunities.
SWOT Analysis
A SWOT analysis is a tool that allows an organization to strategically plan as it evaluates its position by analyzing its strengths, weaknesses, opportunities, and threats. To effect the analysis, the tool examines both the internal and external environments of the organization. The strengths and weaknesses evaluate the internal environment while opportunities and threats evaluate the external one.
Galaxy Toys enjoys strategic advantages, such as exclusive rights to manufacture and sell NASA-themed toys, green business practices, a well-established brand, and a history of innovation. However, factors such as the increased costs of producing space themed toys as well as evolving consumer preferences that make it crucial to remain innovative pose a threat to the company’s ability to achieve its goals. Furthermore, there has been a growing trend where gaming is shifting from the traditional toys to app-based gaming among consumers due to the easier availability of phones and tablets (Andronico, 2014). The company, therefore, has to find ways to increase its sales and reduce costs incurred in production and operations if it wants to sustain growth in the coming years. Another threat for the traditional toy manufacturers lies in the relatively low cost of producing and marketing app-based games.
On the other hand, however, this could also be an opportunity for Galaxy Toys if they used the same concept as that of Skylanders and came up with an integrated product that combines the physical toys with technology to get that ‘wow’ factor in their products. Another opportunity for Galaxy Toys is to reduce production costs significantly allowing them to reduce the retail price of their products and increase sales. The last opportunity for the company is spreading its operations to more global markets so as to increase its consumer base. The most significant threat for Galaxy Toys is competition. Another competitor with superior products or which offers lowered prices can outperform Galaxy Toys and reduce their sales. An additional threat would be if the toys failed to perform as projected. This threat is especially significant if the company chose to go with the MMTJE1 line as it costs much more to produce. Manufacturing this line of toys would eat into their income.
A SWOT Analysis Chart for Galaxy Toys
Strengths
High quality products
A well-established brand
Consistent of year-over-year annual growth
A company culture of growth and learning
Innovative ideas and designs
Green production processes
They are the only producer of NASA themed toys
Weaknesses
Lack of production-friendly, “wow” factor new toys
High production costs of some new toys
Galaxy’s toy prices limit global sales possibilities
Decreasing annual sales growth (negative trend)
Opportunities
Investing in new and innovative toys
Integrating existing toy products with app and other technology
Add international markets
Expanding to international markets in order to lower costs
Threats
The toy market is volatile
Increased competition from other tech toys
The cost of entering the toy market is low while the treat of substitutes is also high
Changing customer preferences with the advent of app-based gaming
Recommendations
The company’s long-term plans should take approximately 30 months to be implemented. Galaxy Toys should adopt innovative technologies in order to bring down the production costs and in the long run also create a better environment. In addition, there should be alternative plans, such as backup, just in case anything happened and the company had to do away with the long term goals. The plan that is adopted should take into consideration the number of employees needed to achieve the set goals, the timeline within which the goals should be achieved, and the available resources.
Galaxy Toys should first decide on the toy line they want to produce and then devise the most appropriate plan for that product. While the payload nine lines of toys could be much more cost effective to manufacture, there are fears that despite being predicted to do well, it would still not reach the sales targets. The most practical option would, therefore, be to concentrate on the MMTEJ1 toys. These toys have many benefits in that they educate the children about space and also lead to increased sales for the company’s other related toys and books. Furthermore, adopting technology in their production processes would increase sales by 15%, even for unrelated sales. On the other hand production of the MMTJE1 is a concern because it is not financially smart at the moment. The company should instead begin production of this toy line the following year after they have assembled the necessary tools that can enable it to make high-quality products and increase sales.
Appropriate Short-Term Goals
Goals should be quantifiable such that the organization is able to determine if they are achievable or not. If the leadership of the company decides to adopt 3D technology for production, items on this list would have to be moved to the abandoned category. What is left is the goal of a new date and the related goal of shipping.
Appropriate Short-Term Objectives
Objectives can be described as those aims of an organization that are not specific or quantifiable. Some of the objectives, like achieving quality production, seem to be in line with the overall mission and vision of Galaxy Inc. However, others, like setting the date, are an indication of a step on the production plan that has to occur and cannot be termed as goals because there is no specified timeframe. Determining a shipping date can, therefore, be termed an objective while a specific date when shipping begins is a goal.
Abandoned Short-Term Production Goals and Objectives
This list comprises of goals and objectives that would be appropriate in the event there was an earlier launch date for the MMTJE1 line of toys.
Appropriate short-term goals
Appropriate short-term objectives
Abandoned short-term production goals and objectives
• 3D printers must be purchased by February 20th, 2017.
• Production of quality MMTJE1 toys must start by July 1, 2017.
• Shipping should begin July 1, 2017.
• Completion dates for new personnel hire set.
• Dates for starting production set.
• Completion dates for material purchase and delivery set.
• MMTJE1 quality toys production
• Completion dates for QC standards will be determined by QC.
• Shipping should begin immediately upon the nod from Quality Control.
• Shipping start dates should be determined.
• Completion dates for 3D programming, training and installation set.
• Maintenance for 3D printers must be done daily.
• Personnel must be cross trained on the 3D printers.
• Marketing will determine shipping start date.
• Dates for personnel hire set.
• Production of quality MMTJE1 toys must start February 20th, 2017.
• Additional personnel must be hired by February 20th, 2017.
• Materials must be state of the art.
• 3D printers must be purchased and installed by November 1, 2016
• The first MMTJE1 toys should be produced by December 1, 2016.
• QC should evaluate first toys by December 31, 2016.
• Safety standards should be determined by QC by May 1, 2016.
• Materials must be purchased by and delivered by July 1, 2016.
• New packages should be palletized by May 1, 2017.
• Personnel for all production functions must be organized by March 31, 2016.
• IT must confirm programming for 3D printers is complete by June 1, 2016.
• 3D machine operators must be trained by October 31, 2016.
• Training on new equipment must be done by October 31, 2016.
Rationale
The main factor in determining what to be included or not to be included in each of the above lists was the start date for producing the MMTJE1line of toys as well as the decision to produce both Payload Nine for Christmas 2016 and the MMTJE1 for Christmas 2017. Rushing the production of one product is not a good decision as it would require higher capital investment from the company and would also derail some of its long-term goals. Additionally, rolling out a new and complex product just a month before its sales period increases the risk of compromising on quality and could negatively impact the company’s brand. By taking additional time to identify a product that is cost effective to produce can increase the company’s profitability in the long run.
Conclusion
Applying a SWOT analysis on the case of Galaxy Toys shows that the company’s most significant threat is competition from app-based games. The company, however, has a major strength in their partnership with NASA and should use this to maximize their sales. While the app-based games are a major competitor, the same concept can be used to their advantage by integrating their toys with technology to come up with a unique product. 3D printing technology can be useful in achieving this goal. However, shifting to this kind of production would require significant investment in both machines and human capital as staff would have to be trained. All the activities related to the acquisition of these resources are, therefore, short term goals and objectives while other activities related to the actual production should be abandoned for later.
References
Guyduy, M. (2017). U.S. Toy Industry Grows 5 Percent in 2016, Exceeding $20 Billion, The NPD Group Reports. THE NPD GROUP. Retrieved from https://www.npd.com/wps/portal/npd/us/news/press-releases/2017/us-toy-industry-grows-5-percent-in-2016-exceeding--20-billion-the-npd-group-reports/
Andronico, M. (2014). Kids Are Playing With Screens More Than Traditional Toys, Survey Says. The Huffington Post. Retrieved fromhttp://www.huffingtonpost.com/2014/02/24/kids-playing-with-screens_n_4834484.html
