To succeed in a highly dynamic and competitive environment, business organizations must effectively execute their planning activities. They must judiciously formulate their long- and short-term goals and objectives. This ensures better anticipation of the ever uncertain future (Hill & Jones, 2013). Effective planning also ensures better utilization of organizational resources (Wittman & Reuter, 2008). With reference to Galaxy Toys, an American toy manufacturing company, this paper explores the planning process. In the first part, a SWOT analysis of the company is provided, along with a choice and justification of the best long-term planning decision for the company. In the second part, the paper differentiates between goals and objectives based on a formulated list of goals and objectives.
Part One: SWOT Analysis and Long-Term Planning
Founded in 1956 by George Jepson and his wife, Galaxy is involved in designing, manufacturing, and selling space-themed children's toys primarily in the U.S. The company has over the years grown to be one of the largest toy companies in the U.S., with a portfolio of approximately 2500 different toys since inception. Its products have a reputation for ingenuity, durability, playability, safety, affordability, and action; which has been a crucial source of competitive advantage for the company in the rigorously competitive toy market. The company's competitive advantage further stems from the uniqueness of its toys. Rather than the ordinary toys, the company mainly manufactures space-related toys. This largely reflects the company's mission, which is "to create toys that inspire children all over the globe to dream of space exploration and provide a yearning to achieve that dream." Some of the company's most popular products include the Apollo Space Rocket, the Canaveral building set, Create a Moon Surface Kit, and Astronaut Training Center.
In addition to an extensive operational history as well as unique and quality products, Galaxy boasts a strong partnership with NASA, the world leader in actual space exploration. Through the partnership, the company has managed to introduce and sponsor the Annual International Rocket Launch, as well as to manufacture and sell NASA toys in the U.S. and worldwide. Other significant strengths include an employee-friendly culture (characterized by a clan and collaborative atmosphere), a hybrid flat functional structure, as well as fairly strong financial performance. The structure and culture have been crucial for decentralizing decision-making and motivating employees.
Despite the above strengths, a number of weaknesses cannot be ignored. First, the company is significantly dependent on NASA toys, which account for nearly 60% of its total annual sales. History has demonstrated that dependence on a single product line can be dangerous for a company since products generally go through a lifecycle (Hill & Jones, 2013). In addition, the company is predominantly dependent on the U.S. market. The company's limited or no presence in the global market, especially in Europe, South America and Asia Pacific, puts it at a major disadvantage, particularly in terms of exposure to unfavorable events in the domestic market such as economic recession and market saturation (Hill & Jones, 2013).
Nonetheless, there are a number of...
For instance, technology is a crucial driver of growth in the toy industry. 3D printing and other cutting-edge technologies have increasingly provided significant opportunities for the toy industry, especially in terms of quickening production and reducing input costs. Sustainability has also presented opportunities for the industry. By incorporating environment-friendly materials in new product development and instituting toy recycling programs, the company can considerably drive business growth. Innovation would actually be crucial for minimizing the company's dependence on one or a few product lines. Further growth opportunities are presented by global expansion. Presently, the company has production facilities in the U.S. and Mexico only. Expanding to other parts of North America and Latin America as well as Europe and Asia Pacific can significantly improve the company's position in the domestic and global market.
The viability of international expansion is particularly informed by the strong growth the global toy market has exhibited in recent years. In the third quarter of 2015, for instance, global sales grew by 7%, the largest growth since 1999 (NPD Group, 2015). Statistics further indicate that growth will be even stronger in the foreseeable future, with Latin America, Asia Pacific, the Middle East, and Africa being the largest sources of growth (Global Industry Analysts, 2015). The growth has been and will be driven by the increased affluence of the burgeoning middle class, greater exposure of children to technology at a younger age, increased dominance of digital lifestyles, as well as the rising popularity of smart and interactive toys (Global Industry Analysts, 2015).
The ability of the company to take advantage of these opportunities may, however, be hindered by some threats. First and foremost, the threat of competition in the industry is strong. The U.S. toy market is extremely competitive, with brands like Lego, Spin Master, Nintendo, Mattel, Hasbro, and Toys R Us dominating the scene. There are also tens or hundreds of small and medium-sized toy manufacturers, which add further competitive pressure. Even though Galaxy has differentiated itself as a producer of space-related toys, its market share can readily be invaded by its competitors. Other important risks include unfavorable economic events such as inflation and recession, political instability, and low market reception. These threats may result in undesired outcomes such as reduced consumer expenditure, slower sales growth, and increased business costs. Table 1 below summarizes the SWOT analysis
Strengths
• Extensive operational history
• Largest privately held toy company in the U.S.
• Broad product line
• Unique, stimulating, durable, and affordable products
• Strong partnership with NASA
• Employee-friendly culture
• Fairly decentralized organizational structure
• Fairly strong financial performance
Opportunities
• 3D printing
• Sustainability
• New product lines
• International expansion
Weaknesses
• Dependence on NASA sales
• Limited global presence
Threats
• Competition
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