Porter’s Five Forces Analysis of Toy Industry 

The toy is a plaything offering joy and entertainment to the children and adults. The toy industry deals with the mass-scale production, design, creativity, and distribution of toys worldwide. Today, we’ll discuss Porter’s five forces analysis of Toy Industry; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Types of toys and games in the Toy Industry

• Digital toys like emojis
• Puzzles
• Vehicles
• Building blocks
• Dolls
• Miniatures
• Construction set

Objectives of Toys and Games Along with Playing

• Engaging in physical activity
• Marketing and promotional merchandise
• Collectibles
• Education
• Cultural awareness
• Promoting innovation and creativity

Statistical facts and figures of Toy Industry

• Global annual revenue – 107.4 billion USD
• Jobs in the US – 572000
• Market size – 305.81 billion USD (2022)
• Prediction – 391.62 billion USD (2030)

Companies and Brands in the Toy Industry

• Hasbro
• Mattel
• Lego
• Parker Brothers
• Ertl Company
• Tonka
• Ideal Toy Company
• American toy Industry Businesspeople

Porter’s five forces analysis of Toy industry would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Toy industry Porter’s five forces analysis of toys and games business as follows;

Porter’s Five Forces Analysis of Toy Industry

Let’s discuss Porter’s five forces analysis of Toy Industry as competitive forces in strategic management and they’re as follows;

Bargaining Power of Suppliers in Toy Industry

The bargaining of suppliers is low in the Toy Industry as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Toy Industry Porter’s 5 forces analysis of toys and games business are as follows;

I-Availability of Supplies & Material

The raw materials used for the production and manufacturing of digital toys are plastic, wood, rubber, and other elements. These all raw supplies and materials are easily available in various regions and countries across the globe. In fact, the raw material suppliers are abundantly available, and their market presence decreases their bargaining power.

II-Outsourcing Manufacturers

According to an estimate, the American toy market outsources 80% of its production and manufacturing from China. The toy manufacturers are easily available just give them the idea and design of the toy product, and they will manufacture the physical product for you.

Bargaining Power of Buyers in Toy Industry

The bargaining of Buyers is Higher in the toys and games business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Toy business five forces analysis of the Toy industry are as follows;

I-Multiple Alternatives

While shopping for toys for children, parents have multiple options; games, building blocks, dolls, cars, machines, miniatures, and others. There are dozens of brands in every toy product category, and they all offer unique toys and gaming products to the customers. Customers could easily switch from one toy and gaming brand to another without incurring any cost.

II-Quality and Price

The quality and material of toys and games would impact the price. If parents want a quality toy for their kids that won’t break up easily, they would have to pay a little extra. In short, if they have a higher budget, they would buy high-quality toys; otherwise, lower quality. Customers have pricing, quality, and budget options while choosing toys for their children.

Threat of New Entrants in Toy Industry

The threat of new entrants is low in the toys and games business and Toy industry as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the toys and games business 5 forces analysis of Toy industry are as follows;

I-Creative Game Idea

The idea and concept of the toy or game should be unique and different in order to attract the attention of mass public attention. In fact, toys companies like Lego, Hasbro, and Mattel invest billions of dollars on their creative team to come up with unique catchy idea. Once they do, they immediately acquire its patents and launch it in the market.

II-Marketing & Promotion

A new entrance has a patent and unique product, but it would be useless if they can’t mass produce it and market and promote it worldwide. All of these small pieces are closely connected with each other, and you can’t win the market share without performing all of these steps.

II-Regulations 

The toy or game has to pass the safety regulations in order to go live on mainstream media. Its material should be safe, idea and concept of the game should be playful and non-violent. It is because toys and games have a great impact on the minds of children; parents don’t want their children to be violent. 

Threat of Substitutes to Toy Industry

The threat of substitute products and brands is higher in the Toy industry as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the toys and games business five forces analysis of Toy industry are as follows;

I-Digital Video Games

Children are showing more interest in playing digital video games than in playing with physical toys. That’s why toys companies are creating digital characters or versions of their toys and games. In the digital market, kids have the option to choose from hundreds of video games. Digital video games are highly engaging and allow users to play live games with another user of their choice anywhere across the world.

Competitive Rivalry in Toy Industry

The competitive rivalry among Toy companies is very high in the Toy industry as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the Toy industry five forces analysis of the toys and games business industry are as follows;

I-Tough Competition

The toy industry has become highly competitive in recent years; there are multiple brands and manufacturers offering the same product with the same competitive pricing. Toy companies have to fight both types of competitors; online games and physical toys. In fact, the digital gaming industry is decreasing the market share of physical toys; because one screen allows users to play multiple games.

Conclusion: Toy Industry Porter’s Five Forces Analysis |5 Forces Analysis of Toy Industry

After an in-depth study of Porter’s five forces analysis of toy industry; we have toy and gaming business as the world’s most business ventures. If you are learning about the Toy industry 5 forces analysis of toys and games business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.