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E-Commerce Toy Industry Analysis Report

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E-commerce Toy Industry Analysis Report


1. Introduction.....................................................................3

2. Rationale for adoption of e-commerce.......................................5

3. Barriers to e-commerce & Business Challenges...........................9

4. The Internet as Communication Medium...................................11

5. Conclusion......................................................................15


Word count from Report: 3385

(1) Introduction:

The Toy industry is mainly responsible for the safety standards products and to advertising and marketing to the children. It produces and imports of toys, games and children's leisure products. Most of the country have their own toy industry association or sometimes may work together. In the US, Toy Industry Association, Inc. (TIA) connect to their members who has contains toy testing laboratories, to design firms and professional creators, government, the trade, the media and consumers etc. these are the respected vote of the U.S. toy industry. The main aim of the industry is the toy manufacturing companies have been enthusiastic to the happiness of the children and the upgrading of their physical, emotional and mental situations (Toy Industry Inc., 2007).

Toy industry has good impact of e-commerce and e-business. Nowadays in all over the world there are so many toy companies have their own website and sell their products online like Mattel Inc, Fisher Price etc. It generates more revenue on the internet. They use both e-commerce and e-business for developing their business. Kalakota and Whinstones (1997) tell four different types of perspectives for e-commerce:

(1) A communication perspective - it means the delivery of information, products/services or payment on the net.

(2) A business process perspective - business transactions and workflows.

(3) A service perspective - reduces the cost and increasing the speed and provides reliable services.

(4) An online perspective - the buying and selling the products/services on the internet (Chaffey, 2004, p.8-9).

In the e-commerce, business model evaluates company's revenue, target market, products or services offering and potential customers. Pant and Ravichandran (2001) describes three alternative perspectives on business models. According to their point of view the toy industry uses three different types of business models like,

(1) Marketplace position perspective - they can be manufacturer or primary service provider, reseller or retailer, media owner or publisher and supply chain provider. For example, The Mattel Inc. organisation manufactures their toys and selling online from their website and other websites like, Toys r us etc.

(2) Revenue model perspective - The toy companies can be direct product sales of product or service, subscription, commission based sales and advertising etc. For example, Toys r us selling their products or service direct through the website and also they provide subscription for marketing their product, and

(3) Commercial model perspective - they can be sell the products on fixed price (Chaffey, 2004, p.61-63).

The toy industry widely uses business-to-business (B2B) and Business-to-Consumer (B2C) e-commerce models.

(2) Rationale for adoption of e-commerce:

The e-commerce drivers are very useful for each and every big organisation and industry. There are numerous e-commerce drivers in toy industry, like

(I) Digital Convergence - The digital revolution has good impact on the global toy market. The internet is very useful digital technology and it improves the e-commerce and pushes market-up in to the toy industry.

(II) Anytime, Anywhere, Anyone - it is available anytime, anyone and anywhere in the world 24/7 days. It is the biggest advantages, if customer wants to buy the doll, they just need to go online on their website and buy it from home at anytime. So it saves the time and money also. For example, websites working 24 hours a day and 7 days a week, customer can buy anything at anytime or anyplace using the internet or mobile phone.

(III) Changes in Organisation's Make-up - today there are many toy organisation's making changes in their organisation wide change might consist of their products and services, privacy policy, restructuring the operations, develop new e-commerce technologies and to mergers with big companies etc.

(IV) Widespread Access to IT - There is many advantages and disadvantages of Information Technology in the toy industry. In the global world, Information Technology helps to easy to communicate, reduce the costs, available all the times etc (University of Delawar, 2007).

There are so many reasons to adopt e-commerce in toy industry for accessing the web and selling and buying products on the net. In the world there are so many small toy companies are running, they also want to develop IT infrastructure and to sale their products online. Here are some of the factors like relating to owner or manager characteristics, to firm characteristics and to costs and return investment which are affecting to the small toy companies.

Owner/manager characteristics: These are the personal characteristics. If the owner wants to earn more money on the business, they must be developing IT infrastructure. It's quite expensive at the beginning and then after it will increase the sales after sometimes.

Firm Characteristics: focus on the organisation itself. The external force to adopt IT can strongly influence the small companies to adopt it and the level of information intensity may influence the companies to adopt e-commerce technology. Costs and Return Investments: it's one of the most important factors. First the small companies need to be evaluate the costs and return investments before develop the IT infrastructure, otherwise they will be survive.



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