Business-Level+Positioning+Strategy

You may include questions such as:  What the overall positioning of the firm is in this particular market;  How the positioning strategy is (or is not) supported by its functional strategies; and  How the positioning strategy influences (or responds to) the competitive and/or coopera-tive dynamics of the industry. Be sure to include any appropriate quantitative analysis of the advantage this position yields (or fails to yield) over the firm’s competitors.

Hasbro has chosen to position themselves as an innovator in the toys and games industry. As an innovator, Hasbro has established a differentiation business model built around specific functional strategies that have allowed them to remain competitive in the market. Hasbro does implement some forms of efficiency in their operations that would allow them to offer cheaper prices to customers, but it is not their main focus, as many of their direct competitors also have the same ability. In fact, Hasbro owns only two production factories; one in Massachusetts and one in Ireland. Both are instructed to create the board games and puzzles offered by Hasbro. All of their other products are manufactured by third-party vendors and preferred factories. By outsourcing some of the production, Hasbro has lowered costs of production. Although they do not disclose who these vendors are because of competition, their competitors are able to imitate Hasbro’s low costs by implementing similar relationships with third-party vendors. Therefore, it is difficult to argue that Hasbro has established a business model built around being a cost leader. Instead, they devote most of their attention to coming up with fresh and innovative ideas for their products and their systems. The business functions of Hasbro help fulfill the strategic objectives set by business and corporate-level general managers. They range in degree of importance, but each one contributes to the overall strategy of the company as a whole in one way or another. Some key areas at the functional level are Human Resources, Purchasing, Product Development, and Customer Service. (Corporate Information, 2009) Within the Human Resources department, three pillars of strategy are used. Hasbro is dedicated to hiring and building great people, great teamwork, and great leadership. Are of the principles are built around the company’s corporate values of integrity, diversity, community, innovation, entrepreneurial spirit, competitiveness, and fun. The department spends most of its time and effort focusing on the following salient strategies: Talent Management and Development, Diversity and Inclusion, Competitive Total Rewards, Employee and Labor Relations, “Wellness” and Well Workplace Programs, and Employee Security. (Hasbro’s Socially Responsible Workplace, 2009) Purchasing is another major business-level function of Hasbro. The company enters into several third-party agreements for the production of raw materials such as plastic, paper, cardboard and various chemicals. Hasbro’s heavy reliance on these agreements also means that they are reliable for any volatile fluctuations in prices. Negotiations are a major part of the purchasing process as the company continually seeks the most cost effective strategy. A majority of the third-party agreements are established with companies outside of the U.S. For example, Hasbro’s reports state, “the countries of the Far East, and particularly the People’s Republic of China, constitute the largest manufacturing center of toys in the world and the substantial majority of our toy products are manufactured in China.” (2008 Annual Report, 2008) The company does operate two of its own facilities, as previously mentioned, in East Longmeadow, Massachusetts and Waterford, Ireland. Perhaps Hasbro’s most important business-level strategy is their focus on product development and current product improvement. For example, in their 2008 Annual Report, Hasbro stated that, “Our focus on core brands, supported by continued investments in marketing and product development, drove full year revenue growth of 5% with solids gains in the Boys, Girls, Preschool and Tween categories. Behind strong brands and new innovation, our board games grew as well.” (2008 Annual Report, 2008) In the same year, Hasbro released nearly 30 new products throughout various product lines. Strategic alliances have also played an important role in the development of new products and licenses. Partnerships like the one established with Universal Pictures will prove to be valuable as they work together to develop four new movies by the year 2014, including screenplays in production for MONOPOLY, STRETCH ARMSTRONG, and CANDY LAND. (2008 Annual Report, 2008) Among their unique and highly regarded business-level strategies, Customer Service ranks very highly within the company, not only as a strategy, but also as part of their overall culture. In fact, the company’s home webpage, www.hasbro.com, contains a link leading directly to Customer Service. The link includes sections such as Recall Information, Product Safety, Replacement Parts, Instructions and FAQs. (Hasbro, 2009) Of those sections, Recall Information and Product Safety are obviously the two of most importance to the company and their customers. The Product Recall webpage lists all of the products that have been recalled by the company with a brief explanation. The product recalls listed date as far back as 1993 and can be viewed by any person. (Product Recall Information, 2009) Contained within the Product Safety webpage, Hasbro informs potential and current customers that the company, proudly, has not been affected by the recent lead paint recalls. According to Hasbro officials, “ When you shop for toys, you can be confident that Hasbro brands have gone through…stringent safety procedures. More than 6,000 Hasbro employees worldwide share a continued commitment to make the best toys and games possible for all of our children.” (Product Safety, 2009) Every strategy created and implemented, even at the business-level, is considered global in scope. Hasbro prides itself on knowing that it competes in a global environment with the current valuable strategies it implements. (2008 Annual Report, 2008) The company recognizes that its core business is maintained through the promotion of new and current products, but that revenues can be increased through effective use of entertainment as well. “While the company believes it has achieved a more sustainable revenue base by developing and maintaining its core brands and avoiding reliance on licensed entertainment properties, it continues to opportunistically enter into or leverage existing strategic licenses which complement its brands and key strengths.” (2008 Annual Report, 2008) Top management at Hasbro does recognize the risks associated with factors such as economic downturns, harsh competition, low barriers to entry, and international affairs thereby allowing them to alter and effectively establish and implement the chosen business-level strategies.

 //2008 Annual Report//. Hasbro, Inc. 2008. .

//Corporate Information.// Hasbro, Inc. 2009. .

//Hasbro.// Hasbro, Inc. 2009. .

//Hasbro’s Socially Responsible Workplace.// Hasbro, Inc. 2009. .

//Product Recall Information.// 2009. .

//Product Safety//. 2009. .


 * **DIRECT COMPETITOR COMPARISON** ||  ||




 * ||  || **HAS** || **JAKK** || **Pvt1** || **MAT** || **Industry** ||
 * Market Cap: || 4.03B || 354.67M || N/A || 7.23B || N/A ||
 * Employ­ees: || 5,900 || 998 || 5,3881 || 29,000 || N/A ||
 * Qtrly Rev Growth (yoy): || -1.70% || -1.80% || N/A || -7.90% || N/A ||
 * Revenue (ttm): || 3.92B || 874.28M || 1.80B1 || 5.42B || N/A ||
 * Gross Margin (ttm): || 49.43% || 27.42% || N/A || 47.32% || N/A ||
 * EBITDA (ttm): || 670.00M || 19.15M || N/A || 797.76M || N/A ||
 * Oper Margins (ttm): || 12.66% || -1.80% || N/A || 11.58% || N/A ||
 * Net Income (ttm): || 302.95M || -366.49M || 256.10M1 || 376.42M || N/A ||
 * EPS (ttm): || 2.008 || -13.459 || N/A || 1.041 || N/A ||
 * P/E (ttm): || 14.49 || N/A || N/A || 19.22 || N/A ||
 * PEG (5 yr expected): || 1.48 || 1.76 || N/A || 2.02 || N/A ||
 * P/S (ttm): || 1.04 || 0.40 || N/A || 1.35 || N/A || ||




 * **JAKK** = JAKKS Pacific Inc. ||
 * **Pvt1** = [|LEGO Holding A/S] (privately held) ||
 * **MAT** = Mattel Inc. ||
 * 1 = As of 2008 ||