1.

LeapFrog uses two business model, which is

a. As a toy company: LeapFrog focused on sales and adopted four key
retailers with highly efficient purchasing and inventory management
system. However the risk in this sector centered around accurate planning,
fulfillment execution, and product acceptance by consumer.
b. As a educational publisher: LeapFrog by its Schoolhouse Division had
many opportunity because overall market was huge and by 2001 NCLB
Act was appllied by the government to facilitate all the students with
different set of skills. Unfortunately, educational market was highly
fragmented, highly diverse, and highly regulated, and also school distroct
budget are getting tighter and tighter.

One of main strategies that were used by LeapFrog is by applying add-on

model to their product. Similar to razor-razorblade model, the company were
trying to separate the content and platform. The platforms were sold at 29,99
– 59,99 $) marked up price and the company can get gross margin of 30 % on
newer platforms. To suit the needs of educational platforms, LeapFrog
established the SchoolHouse Division. Although the public seen LeapFrog as
a toy company, the company itself still working to change the perspective of
LeapFrog products not as a toy company, but as a company that people look
for learning solution.

2. Several companies had made huge contribution and investment toward

LeapFrog Company. In earlier days, Knowledge Universe acquired 82 % of
LeapFrog shares, and the LeapFrog earns 50 million $ as an investment to
increase the growth capital. As a president of Knowledge Universe, Tom
Kalinske re-establish the relationship between Wal-Mart and LeapFrog (after
its first year dropped to focus on a competitor with then-larger product line.
Apart from investment, LeapFrog acquired Explore Technologies. The
company itself are known for NearTouch technology which is seen in their
product Odyssey: The World First Atlasphere. Explore Technology helped
them to develop the software of their products and applying it to LeapFrog
Products.

The earlist product mainly emphasizes on how sounds (phonic) can help kids
education and increasing the knowledge. Based on 1980’s U.S. Department
of Educations Report “A Nation Of Risk”, LeapFrog began to develop toys that
using phonic system because the company believed that sound educational
principals can help the kids to learn faster, and gaining attention from the
other toys, and from the it was their core value of the brand and products.
With the released of NCLB act in 2001, LeapFrog had high hopes that low-
cost and ease-of-use features of the LeapFrog platfoms would provide an
advantage over alternative PC/Handheld solution.

3. At 2003, Mattels Fisher Price Division announced the Power Touch platform
for preschoolers, aimed to be direct competitor of the LeapPad Platform.
Realizing the success, company management team aiming to sustain the
company goals. Prichard, the VP of Marketing stated that the company were
not in the “Hits” business so the only way to keep company running is to to
build long-term goals by building the brand, and keeping the spirits of fun and
creativity alive at the LeapFrog while managing the rigors of a complex and
global business strategy, and keeping its educational mission foremost