STRATEGIC RELATIONSHIPS AND EBUSINESS

Strategic Relationships and E-Business

Strategic Relationships and E-Business

Executive Summary

Spin Master Toys are brand name toys sold at discounted prices in Spin Master. The biggest vendors including Mattel, which has a market share of 16% and Hasboro with a market share of 11%, will sell these toys. As with the clothing, these toys will be shipped to one of the 13 distribution centers, and trucked to the stores every 3-4 days. The toys will be bought on an “opportunity” basis, which will allow for Spin Master to sell them at a 30-60% lower price than normal retail stores.

In order for the toy aisle to be attractive and noticeable to children, the shelves will be painted bright colors and there will be footprints from the entrance leading to the toy aisle. The toy aisle will be located in between the women's clothing department and the children's clothing department so that anyone that passes by those departments will also see the toy aisle. The toy aisle will take up about 200 square feet of the store and will target parents and children.

The toys being sold will include action figures, dolls, and collectibles. These include toys related to movies, TV shows, and cartoons. In order to utilize the most amount of space possible, Spin Master Toys will not include bikes, sports equipment, or outdoor furniture. The toys are specifically for children ages 4-8 and also include books and videos under the “collectibles” category.

For Spin Master Toys to be successful, Spin Master needs to create a strong relationship with vendors and will need more employees to create those relationships. Since the population of children is growing 2% each year, our revenue will grow that same amount from year 1 to year 2 to year 3. 4.6% of Spin Master's shoppers are mothers with children ages 4-8 so we already have a quantitative market. By the end of Year 3, Spin Master Toys will make $9 million in revenue for Spin Master and Spin Master as a whole. This is a profitable idea.

Company Overview

Business Idea

Spin Master was launched in 1994 by three university friends - Ronnen Harary, Anton Rabie and Ben Varadi - who started with a budget of $10,000 and a single product: The Earth Buddy. A surprise hit, the pantyhose-covered head sprouted grass “hair” when watered. The trio followed it up with a handful of novelty products, but didn't find big success again until 1998, when Spin Master launched its first Air Hogs air-pressured airplane with help from two British inventors. Since then, Spin Master has introduced a slew of hot kids' toys ranging from finger-skateboards and bikes (Tech Deck and Flick Trix, respectively) to Bakugan. It's signed licensing agreements with major players such as Nickelodeon and Disney, secured distribution in over 50 countries, opened its own entertainment division and now employs a global staff of roughly 1,000.

We want to place a toy aisle in Spin Master. It is not going to just be put as “this toy aisle in ...