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Presented by:

MMS 08 - 10

Pushkar Jadhav - 14

Mayank Lalpuria - 22

Anand Padwal - 32

Mandar Patil - 37
Company Background
• The two main
Strategies of Toy “R” Us
are :
-Every day low price
(EDLP)
-Keeping Toys in stock
• Faster expansion &
increase in market
share
• Change in management
Company Background
• Conversion of Toy ‘R’ Us
stores into Babies ‘R’
Us
• Expansion of babies ‘R’
Us stores and its
product line
• Decrease in profit of Toy
‘R’ Us in last three years
International Expansion
• In 1983 TRU entered the
children’s clothing market with
Kids “R” Us and established
the International Division.

• The first international store


opened in 1984 in Canada.
from 1986 - 94, TRU was in
Singapore, Hong Kong, United
Kingdom, Germany, France,
Taiwan and The franchise
division also led to the entry
of TRU to Israel, Saudi Arabia,
• TRU used its established relationships with toy
suppliers and knowledge of toy trends to quickly
stock stores with attractive new merchandise.

• TRU sells a version of Monopoly in Hong Kong


that replaces Boardwalk” and “Park Place” with
“Sheko” and “Repulse Bay.
• TRU tried “store within a store” or
“boutique” concepts. e.g. Lego
Stores
The Toy Business
• The toy industry annually generates sales of $25
billion at retail in 1990s.
• Market Share is U.S. 40% , Europe 30%, and Asia
30% in the 2002-2003.
• Everyone in the toy business is constantly looking
for hits.
• Parents pay close attention to the safety of toys
• High-demand Christmas buying season
• When characters on children’s television or
movies become successful, a company license its
name, character, or logo, to yield even more
revenue.
Market Dominance
• As of 2005, the TRU organization included 685 toy
stores in the U.S. and 603 international toy stores

• TRU had set up its own Internet site in 1998,


trying to catch up to the new toy-selling trends.

• In 2001, TRU developed an arrangement to


merge its toy merchandising website with that of
Amazon.com.

• By 2004, the TRU share of the US toy business


had fallen to 17 as Walmart and others were
catching more than 20% Market Share.
2003 - The Toy Market
Decline
Company 2002 Toys 2003 Toys %Change
sales in sales in
million $ million $
Wal-Mart $8,500 $9,435 11.0%
Toys R Us $6,615 $6,345 -4.1%
KB Toys $2,060 $1,650 -19.9%
Target $2,250 $2,530 12.4%
Kmart $1,700 $1,345 -20.9%
A Full Stop to
Imaginarium

Learning and
educational toys
TRU Japan Stake reduced
from
80% to 48%
The Changing Market
Toy Annual Sales Annual Sales %Change
Category 2002 2003
Action $1.4B $1.2B -14.6
Figures &
Accessories
Building $766M $625M -18.4
Sets
Dolls $2.7B $2.8B 3.5

Infant/Presc $2.9B $2.6B -11.7


hool
The New Choice of Kids
Christmas, 2004
Competing with Discounters

TRU : “We have to do the things Wal-Mart and


Target won’t do, or can’t do.”
The Strategy

• 300 different
private label toys.
• Worked closely with
both small and large
vendors.
• Sales of Private
label products went
up from 5% to 20%.
• The ‘TOY BOX’
The Brink
• Revamped store
operations
- Executives trained to
indulge in customer care

-Acquisition of
exclusive toys Eg.
Mattel’s Hokey pokey

• Ad campaign
-30 sec 60 sec slots in
New York and Los
Angeles
Revival Attempt
• Re-order with vendors
for Hit toys
-eg. Acquadoodle, Hair
Fairy tale

• Defined objectives to
conduct business
- Not to compete with
Wall mart but to
equate prices
-Keep Heavy stocks of
hit items
The end ?

• TRU’s failing attempts

• The sales debacle

• Attempt to modernize.