University of Maryland University College

BMGT 362

Galaxy Toys, Inc.

Introduction

Galaxy Toys has sixty years of successful production and sales of space-related toys. In addition to an exclusive contract to produce NASA related toys, the company has a number of profitable toy models and consistently achieves annual growth in sales and production. The domestic toy industry remains strong, posting seven percent growth last year (Guyduy, 2016). However, with changing toy preferences, sustainability goals, and a need to decrease operating and production costs, the company has many challenges in its two year planning process. As a foundation for these planning activities, it is important for the company to consider its current strengths, weaknesses, opportunities and threats, as well as goals that will allow the company to maximize its strengths, address weaknesses and threats, and take advantage of opportunities in the current toy market.

SWOT Analysis

Galaxy Toys benefits from solid branding, a history of innovation, sustainable practices, and exclusive rights to produce NASA toy products. However, continued need to remain cutting edge and create innovative toys, combined with increased production costs for technology-enhanced toys, threaten whether the company will achieve its thirty-month goals. With a toy market rapidly shifting to app- and phone/tablet-based gaming and a decreased interest in physical toys, the company must both increase sales and reduce costs to continue its history of annual year-over-year growth (Andronico, 2014). The relatively low cost of creating games based on cell phone platforms also threatens traditional toy makers of all varieties (TIA, 2016). While this is a threat to toy sales, it also presents an opportunity for increased sales and new customers, particularly if the company can create integrated products similar to Skylanders, which combine the physical toys it has the capacity to produce with technology that provides a “wow” factor for new toy products. Additionally, if the company can reduce production costs to the point of lowering retail price of its toys, it also has opportunities to move into additional global markets, where quality toys are generally not available but remain in high demand (Bosler, 2016).

SWOT Analysis Chart

Short Term Production Goals and Objectives

Of the three production options available to Galaxy Toys, the most realistic and profitable is to produce 1 million Payload Nine toys for Christmas 2016 and 1 million MMTJE1 for Christmas 2017. The main sales goal of the company is to increase non-NASA toys, and both of these are NASA toys, as one is in a NASA designated line and the other involves the Curiosity and Galileo rover, both NASA equipment. Therefore, sales and production goals for these two toy lines are secondary to the overall company goals of five and 11.2 percent reduction in costs. Additionally, as the Payload Nine toys are projected to be solid sellers, their boost the NASA category of nearly seven percent will provide additional revenue and maintain overall sales growth, which while still growing declined from last year.

The production of the MMTJE1 is also a concern, as it has been identified as not production-friendly. The company may want to shift to a more traditional manufacturing method for this toy. Those knowledgeable about 3D toy production indicate it will be several years before it is profitable for large scale production, and the improvements in 3D printing technology make significant purchase now questionable, as the equipment will likely be inefficient and outdated very quickly (Thompson, 2016). Updating machinery would also require additional staff training, an increased expense. Moving back the initial production date allows the company more time to more thoroughly consider its production plans and to benefit from any improvements in 3D production that may occur in the interim. While sustainability goals are admirable, they should be secondary to goals related to profitability.

Appropriate Short Term Production Goals

Goals are measureable, and the organization can therefore clearly document whether they are achieved. If the company decides to continue with 3D printers for production, this list item would move to the abandoned category. This leaves the new goal date and the shipping goal that accompanies it.

Appropriate Short Term Objectives

• 3D printers must be purchased by February 20th, 2017.
• Production of quality MMTJE1 toys must start by July 1, 2017.
• Shipping should begin July 1, 2017.

Objectives involve aims the company has that are not specific and clearly measurable. Some of these, such as the intent for quality production, align with the overall mission and vision of the company. Others, such as date setting, indicate a step in the product plan that needs to occur, but because they do not have a clear time designation, they are not considered goals. Determining a shipping date in the list below is therefore an objective, while a specific date to begin shipping, as included in the list above, is a goal.

Abandoned Short Term Production Goals and Objectives

• Dates for starting production set.
• Completion dates for new personnel hire set.
• Completion dates for material purchase and delivery set.
  • MMTJE1 quality toys production
  • Completion dates for QC standards will be determined by QC.
  • Shipping should begin immediately upon the nod from Quality Control.
  • Shipping start dates should be determined.
  • Completion dates for 3D programming, training and installation set.
  • Maintenance for 3D printers must be done daily.
  • Personnel must be cross trained on the 3D printers.
  • Marketing will determine shipping start date.
  • Dates for personnel hire set.

The list below reflects many production goals that would be appropriate for an earlier launch date of the MMTJE1, but are not applicable to the later start date. Of note, many of these goals would need to be set for the later start date, and should be included in that project plan with dates that align with the later production start goal. In addition, the objective of state of the art materials was abandoned as they are usually more expensive than other options. While it is important that materials be of good quality, it is not necessarily a required objective, particularly as the company is seeking to reduce costs. It may be possible to use a highly functional material that is not state of the art, but which will have an equivalent application in the toy while helping the company to achieve its goal of reducing expenses.

Rationale

• Production of quality MMTJE1 toys must start February 20th, 2017.
• Additional personnel must be hired by February 20th 2017.
• Materials must be state of the art.
  • 3D printers must be purchased and installed by November 1, 2016
  • The first MMTJE1 toys should be produced by December 1, 2016.
  • QC should evaluate first toys by December 31, 2016.
  • Safety standards should be determined by QC by May 1, 2016.
  • Materials must be purchased by and delivered by July 1, 2016.
  • New packages should be palletized by May 1, 2017.
  • Personnel for all production functions must be organized by March 31, 2016.
  • IT must confirm programming for 3D printers is complete by June 1, 2016.
  • 3D machine operators must be trained by October 31, 2016.
  • Training on new equipment must be done by October 31, 2016.

The overall rationale for what was and was not included in each list was primarily influenced by the production start date for the MMTJE1, and by the overall decision to manufacture both toys, the Payload Nine for Christmas 2016 and the MMTJE1 for Christmas 2017. Rushing a product to production in a scenario that requires higher capital investment costs for the company and derails its other long-term goals is not good decision-making, and starting production of a complex new product one month before its main sales period does not leave room to address quality or functioning issues, which could compromise Galaxy Toys’ reputation for quality. Taking additional time to develop a more cost-effective and production friendly product will increase the product and the company’s long-term profitability.

References

Andronico, M. (2014). Kids Are Playing With Screens More Than Traditional Toys, Survey Says. The Huffington Post. Retrieved from http://www.huffingtonpost.com/2014/02/24/kids-playing-with-screens_n_4834484.html

Bosler, M. (2016). In-Game Purchases and Construction Toys Drive Global Growth for Toys and Games in 2015. Business Wire. Retrieved from http://www.businesswire.com/news/home/20160621005113/en/In-Game-Purchases-Construction-Toys-Drive-Global-Growth

Guyduy, M. (2016). Stellar performance for US toy industry, growing nearly 7 percent in 2015. The NPD Group. Retrieved from https://www.npd.com/wps/portal/npd/us/news/press-releases/2016/stellar-performance-for-us-toy-industry-growing-nearly-7-percent-in-2015/ 

Thompson, B. (2016). How 3D printing will disrupt the manufacturing industry. Manufacturing Business Technology. Retrieved from http://www.mbtmag.com/article/2016/01/how-3d-printing-will-impact-manufacturing-industry

TIA (2016). Toy Trends. Toy Industry Association. Retrieved from http://www.toyassociation.org/TIA/Industry_Facts/trends/IndustryFacts/Trends/Trends.ie