Rhode-Island based toy manufacturer, Hasbro, is the exclusive maker of Disney’s Marvel, Star Wars, and Frozen toys. The toy industry has been underperforming since the closing of Toys “R” Us in 2017 and the recent trade war with China. Hasbro and Disney are now counting on the release of “Frozen 2” and “Star Wars” movies to boost sales during this year’s holiday shopping season.
Video Spotlight: Hasbro buys Peppa Pig owner for $4 billion
This post is based on the CNN article, Hasbro really, really needs you to buy ‘Frozen 2’ and ‘Star Wars’ toys this holiday season, by Chauncey Alcorn, November 22, 2019, and the YouTube video, Hasbro buys Peppa Pig owner for $4 billion, by Quest Means Business, August 23, 2019. Image source: Shutterstock/current value
1. What are the Hasbro’s supply chain challenges?
Guidance: The demand challenges include (1) a loss of 15% sales with the closing of Toys “R” Us, (2) the difficulty of predicting the demand for movie-related toys as these toys are dependent on the success of movies such as Frozen 2 and Star Wars, and (3) six fewer post-Thanksgiving shopping days in 2019 that further hurt toy sales. The supply challenges are concerns over tariffs on Chinese imports that increases shipping costs for two-thirds of Hasbro’s toys.
2. How did Hasbro address its supply chain challenges?
Guidance: Hasbro is the exclusive maker of Disney’s toys. With the release of “Frozen 2” and “Star Wars” during the holiday season, Hasbro is expecting that the demand for these successful movie-related toys will more than make up for the poor performance of its non-Disney products. Hasbro also is shifting its supply chain to local sources rather than China.