Historical perspectives:
Toy World, Inc. was founded in 1973 by David Dunton & Jack McClintock was a manufacturer of Plastic Toys for children: cars, trucks, rockets, spaceships, etc. Toy World, Inc. was originally a partnership when it was incorporated in 1974. Company had grown rapidly since its founding, with profits increasing every year since 1976. Jack McClintock assumed presidency in 1991. In 1993 David Dunton & Jack McClintock hired Dan Hoffman as the production manager. The context of the case study is early 1994 and Toy World faced a large number of foreign and domestic competitors in its industry especially with low barriers to entry, short product life cycles, and significant price competition. The production and sales at Toy World had been highly seasonal with over 80% of dollar volume between August and November. In 1994 Dan Hoffman suggested a level monthly production vs. seasonal production as he saw Recruiting difficulties and high overtime expenses, strained working Capital and increased wear and tear of the machinery due to stretched production during peak season. On the initial analysis, Mr. McClintock would consider Dan Hoffman’s proposal to switch from the traditional seasonal production cycle to a more predictable level production cycle as it would reduce the production costs.
Toy Industry Environmental Scan and Internal Analysis:
The industry of Plastic toy manufacturing was known to be highly competitive, populated with many manufacturing companies. Also of notice was the fact that imported toys put pressure on smaller firms. There were low barriers for competitors to enter the industry. The industry’s big plus was that there was a high margin potential on new popular toys. Toy World had experienced rapid growth sinc ...