ASSIGNMENT QUESTION
(1) Case 1 – Maya Toys Inc, is involved in manufacturing of children’s toys since 1990 and they have been in business for more than two decades. Maya Toys are the most wanted play stuff among parents for their children as these toys complies with all safety regulations and it has been a house hold name especially for newlyweds and young couple who are having their first child. Stores around town run out of stock during festive seasons and people queue and orders are made three months ahead at times.
But in recent time, since mid 2010 the sales volume has drop tremendously after an incident in the manufacturing plant where an explosion killed 5 female workers who were mothers. The employee union has taken the case against the company citing the following;
(a) No safety rules was available for the employees
(b) The company did not follow or train employees on safety measures
(c) Safety gadgets were not working
(d) Campaign “SAY NO TO MAYA”
In court the company won the case and item (a), (b) & (c) above was proven as wrong allegations by the company; however, the campaign did not stop to date. People became skeptics and started avoiding Maya toys. However, the company did not stop manufacturing but continued to counter the anti Maya campaign through enhancing engagement activities especially in CSER internally and externally.
After the incident during the last season Maya experienced a drop of 58% in sales and people moved on with other brands. A recent market survey of toys market clearly states that Maya is losing its edge among parents and if this continues in 2011 there is a further possibility that Maya’s sales volume will further drop by 12%.
The revenue of Maya dipped making its operating profits to 3% in 2010 compared to its previous years 2006 at 7.8%; 2007 at 7%; 2008 at 8%; 2009 at 8% and 2011 is questionable.
Creditors are also not in favor of long credit terms where the company had some suppliers giving them 4 months credit terms. In recent times these creditors and suppliers wants a change in their agreements where credit deposits are required and this is also affecting the financial situation of the organization.
In February, 2010 Safety Toys Inc., open a plant in the same vicinity and now Maya is affected by staff pinching whereby their skilled labor is being moving to Safety toys. Maya experience a turnover of 50% in September 2010 where 43% of this employee joined Safety and the balance 7% remained home. Members of the neighborhood have now formed a task force to educate women working in the manufacturing plants to seek additional benefit.
The Union on the other hand stopped its negotiation for a new collective agreement and threatening to strike.
Maya at its last Board & Senior Management meeting have addressed that they need to act fast to counter all external and internal aggressions so that Maya can continuously be in business.
You are required to simulate a biz case with the above information and address the following issues;
(a) Analyze Maya’s situation at the moment and how will you advise
the Senior Management to overcome the current scenario?
(b) How will you plan, design and develop a program that would
leverage Maya’s stand in the industry attracting back skilled labor?
(c) How will help in re-branding Maya?
(d) What changes must Maya conduct to attract community the confidence of the community?
(e) In your opinion should Maya go on a MBO or offer of sale?
(f) What could be the main reason people are not staying with Maya?
(g) What will your Biz Continuity Plan using Human Capital to gain the market share which Maya has lost?
Table of Content
No
|
Description
|
Page
|
Assignment Question
|
4
|
|
Acknowledgment
|
7
|
|
Executive Summary
|
8
|
|
1.0
|
Introduction
|
9
|
2.0
|
Maya Toys Inc
|
11
|
2.1
|
SWOT Analysis
|
12
|
3.0
|
Senior Management’s Strategic Movement
|
13
|
3.1
|
Go Online
|
13
|
3.2
|
Disadvantages
|
15
|
4.0
|
Promotion, Sales, Discount
|
17
|
4.1.1
|
Sales Promotion
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17
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4.1.2
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Point-of-Purchase Advertising (POP)
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17
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4.1.3
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Specialty Advertising
|
18
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4.1.4
|
Trade Shows
|
18
|
4.2
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Selecting a Promotional Mix
|
19
|
5.0
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BPA Free Product
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19
|
6.0
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Merge with Safety Toys
|
20
|
7.0
|
Conclusion
|
21
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8.0
|
Reference
|
22
|
ACKNOWLEDGEMENT
I am highly indebted to Mr. Vigneswaran for his guidance and lectures as well as for providing necessary information regarding the assessment & also for his support in completing this assignment.
EXECUTIVE SUMMARY
“Companies with the highest numbers of women at the top financially outperform those with lower numbers of women.” Ilene H. Lang
This paper discusses on the children’s toy company, Maya Toys Inc which has been stricken with high loss since an unavoidable incident back in 2010 killing 5 mothers. How Maya Toys Inc plans to rebuild the profit and reputation among the customers and with newly open competitor, Safety Toys Inc.
This paper also discuss on how Maya Toys Inc should strategically built their human capital management skills to train their existing workers into a skilled manpower meanwhile attracting their ex-skilled workers who have left Maya for Safety Toys.
1.0 INTRODUCTION
Human capital management (HCM) is an approach to employee staffing that perceives people as assets (human capital) whose current value can be measured and whose future value can be enhanced through investment.
An organization that supports HCM provides employees with clearly defined and consistently communicated performance expectations. Managers are responsible for rating, rewarding, and holding employees accountable for achieving specific business goals, creating innovation and supporting continuous improvement.
Human Capital Management also helps organizations analyze workforce strengths and vulnerabilities, while surfacing opportunities and strategies that allow business leaders to proactively manage human capital. By providing a holistic view of your work force, the solution gives you the consistent and accurate answers needed for strategic decision making
Some of the features required for HCM;
(A) Analytical human capital data model
· Describes how workforce data is represented based on business requirements.
· Gives access to frequently needed workforce data.
· Tailored for decision making.
· Simplifies reporting and analytics.
· Allows for site-specific enhancements with extensible model.
· Reduces the cost in designing and implementing from scratch.
(B) Pre-defined analysis
· View drillable demographic data spatially while presenting statistics about the displayed population.
· Evaluate current workforce structures by analyzing organizational information in list and graphical views.
· Simulate and analyze organization structure changes by moving or removing groups and people.
· Access information collected for each employee from one application. Surface historical, current, performance and predictive information on an employee-by-employee basis.
· Choose from over 250 key performance indicators (KPIs) to get fast, specific information.
(C) Data management
· Data from legacy, transactional and ERP systems can be extracted and integrated.
· A common platform is used for all solutions, and reduces learning curves through the same look and feel.
· Unified data management and integration with common dimensions, data storage and access to ERP systems.
· A KPI viewer allows you to view and interact with KPIs versus their goals.
(D) Information sharing and delivery
· Portal which provides a single access point via a Web-based interface with role-based security and authentication.
· The power of data access, reporting and analytics can be leveraged directly from Microsoft Office via integrated menus and toolbars.
· Web-based query reporting designed specifically for nontechnical business users.
· Centralized data description repositories for each application area.
· Support for multidimensional databases with slice-and-dice analysis.
· Reports for all solutions can be stored in a common document manager.
2.0 MAYA TOYS INC
Maya Toys Inc, is involved in manufacturing of children’s toys since 1990 and they have been in business for more than two decades. Maya Toys are the most wanted play stuff among parents for their children as these toys complies with all safety regulations and it has been a house hold name especially for newlyweds and young couple who are having their first child. Stores around town run out of stock during festive seasons and people queue and orders are made three months ahead at times.
But in recent time, since mid 2010 the sales volume has drop tremendously after an incident in the manufacturing plant where an explosion killed 5 female workers who were mothers. The employee union has taken the case against the company citing the following;
(a) No safety rules was available for the employees
(b) The company did not follow or train employees on safety measures
(c) Safety gadgets were not working
(d) Campaign “SAY NO TO MAYA”
In court the company won the case and item (a), (b) & (c) above was proven as wrong allegations by the company; however, the campaign did not stop to date. People became skeptics and started avoiding Maya toys. However, the company did not stop manufacturing but continued to counter the anti Maya campaign through enhancing engagement activities especially in CSER internally and externally.
After the incident during the last season Maya experienced a drop of 58% in sales and people moved on with other brands. A recent market survey of toys market clearly states that Maya is losing its edge among parents and if this continues in 2011 there is a further possibility that Maya’s sales volume will further drop by 12%.
The revenue of Maya dipped making its operating profits to 3% in 2010 compared to its previous years 2006 at 7.8%; 2007 at 7%; 2008 at 8%; 2009 at 8% and 2011 is questionable.
Creditors are also not in favor of long credit terms where the company had some suppliers giving them 4 months credit terms. In recent times these creditors and suppliers wants a change in their agreements where credit deposits are required and this is also affecting the financial situation of the organization.
In February, 2010 Safety Toys Inc., open a plant in the same vicinity and now Maya is affected by staff pinching whereby their skilled labor is being moving to Safety toys. Maya experience a turnover of 50% in September 2010 where 43% of this employee joined Safety and the balance 7% remained home. Members of the neighborhood have now formed a task force to educate women working in the manufacturing plants to seek additional benefit.
The Union on the other hand stopped its negotiation for a new collective agreement and threatening to strike.
Maya at its last Board & Senior Management meeting have addressed that they need to act fast to counter all external and internal aggressions so that Maya can continuously be in business.
2.1 SWOT Analysis
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths(S) or weaknesses(W), and those external to the firm can be classified as opportunities(O) or threats(T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into Maya Toys Inc
Strength
|
Weakness
|
Threats
|
Opportunity
|
3.0 Senior Management’s Strategic Movement
With the upmost terrific problems in hand, senior management of Maya Toys should take drastic changes to save and reverse the fate of the company. Some of my advice to the board and senior management are;
3.1 Go Online (èBusiness)
E-business (electronic business), derived from such terms as "e-mail" and "e-commerce," is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. One of the first to use the term was IBM, when, in October, 1997, it launched a thematic campaign built around the term. Today, major corporations are rethinking their businesses in terms of the Internet and its new culture and capabilities. Companies are using the Web to buy parts and supplies from other companies, to collaborate on sales promotions, and to do joint research. Exploiting the convenience, availability, and world-wide reach of the Internet, many companies, such as Amazon.com, the book sellers, have already discovered how to use the Internet successfully.
“Only those who will risk going too far can possibly find out how far one can go”. Thomas Stearns Eliot
Coming back to Maya Toys Inc, the management of the company should spread their business worldwide through e-business with the availability of web hosting and online marketing. People around the area know about the incident happened in the factory but not the people outside the area.
In today’s world, people have become technology literate and prefers to have it all done with just clicking at home desktop compare to the old traditional shopping which require you to travel, searching, queuing to pay, packing and unpacking even though the mall is just the next door. For convenience purpose, more and more companies are changing to online marketing.
9 Advantages of having an online business:
Cost Saving
There are minimal start-up costs to create and run a website. All we need is a domain name and web hosting package and we’re half-way there. If our business is purely online we will save on overhead costs.
Marketing = Money
The internet is a great and inexpensive tool for marketing. Online advertising is affordable and easily tracked which allows you to see what communication is working and what isn’t. You will be able to nail down exact demographics of your target audience and you can use Search Engine Optimization tools to improve your Google ranking and therefore bring in more traffic. E-mail marketing is also a powerful tool to help raise brand awareness, build relationships and bring in sales – this is something every business should be doing.
Go Green
The most effective way to reduce your company’s carbon footprint is to run it online only. Fewer staff are needed and your employees can also work from home – save on transport costs and utilities like water and heating. Everything can be done electronically and stored online too which helps to save paper.
24/7/365
Your online business will be open 24 hours a day, 7 days a week and 365 days a year. If you are running an E-commerce site then your business can make money for you while you are sleeping or taking your kids to school. Potential customers can browse your products and services, and review them whenever they want from the comfort of their own home. Your site can extract valuable data e.g. email addresses and other important customer data which can help you to target the right audience more effectively.
Communication is Key
Your website is a point of contact for you and can act as an interactive business card. Customers are able to contact and converse with you via phone/e-mail/Twitter/Facebook etc. to ask you questions regarding your product and services. This is a great way to build relationships with your customers. Though it is great idea and most popularly growing trend doing business with social network such as Facebook, it is not recommended for Maya Toys Inc. This is because people who took part in “Say No To Maya” campaign might post negative remarks about the company which may result a bad image to all the network list.
Go Global
Anyone with an internet connection can view your products or services online. From the countryside in Yorkshire to a busy corner shop in Japan and to a sleepy fishing village in South Africa, the internet is the world’s shopping window for your products.
Flexibility
Run your online business from your home – you could even run your online business while on holiday. Hosting companies like UK2.net, owned by the UK2 Group, are creating software which makes it easy for someone to run their own business with ease. You could be creating and sending invoices while improving your golf swing.
Professional to the last
If a potential customer searches for your company online and can’t find your website, you will automatically lose credibility in the eyes of that customer. They will, in a matter of seconds, search for the product or service you offer and go straight to the competition without second thought.
Niche is Nice
Ebay started out because someone bought a broken laser pointer off a bidding program created by Pierre Omidyar, the founder of Ebay. Pierre contacted the customer to inform him that it was in fact a broken laser pointer he had just purchased, to which the customer replied: “I collect broken laser pointers.” Don’t think that if you have a niche product or service, there is no point to having it online. You are speaking to a global audience where your product could be more popular than you think.
3.2 DISADVANTAGES
Bringing the business online definitely benefit Maya Toys Inc to some extend provided they took precaution on possibilities such as;
1) Those who took part in “Say No To Maya” might open up a blog and when they do this, the whole world would be able to view it and again it might cause problem to the company.
To solve this problem, Maya Toys Inc should change their company name or open a subsidiary, for example like Dreamz Toys Inc. All online sales and marketing shall be carried with this new company name.
4.0 PROMOTIONS, SALES, DISCOUNT
In this world nothing attracts customer or lure them to buy a product like promotion or sales. We prefer to buy a pair of shoe for $120 after discount 50% (original price is $240) compared to another pair of shoe which is just $80 without any discount although both pairs made from same material and carries same brand. Buy one free one? This sounds attracting, but it’s already and old method. Now people are going for buy one, free three, something like our telecommunication giants like Maxis, Digi and Celcom offering. Another sample is AirAsia, who often gives us free sits to fly. We only need to pay the surcharges and complementary items that we need. By doing multiple promotion including giving free sits to customers are the main reason why AirAsia could remain its position on top in airline industry.
4.1.1 Sales Promotion
Sales promotion consists of the forms of promotion other than advertising,
personal selling, and public relations that increase sales through one-time selling
efforts. Sales promotion was traditionally viewed as a supplement to a firm's sales or
advertising efforts, but now it has become an integral part of the promotional mix.
Maya toys can advertise their sales promotion via local newspapers and magazines.
4.1.2 Point-of-Purchase Advertising (POP)
Point-of-purchase advertising (POP) consists of displays and demonstrations
promoting an item at a time and place near the location of the actual purchase
decision, such as in a retail store. Video advertising on supermarket shopping carts is
an example. POP can be very effective in continuing a theme developed by some
other aspect of the firm's promotional strategy. Maya toys could have their POP at local supermarkets such as Giant, Tesco or Carrefour for instance.
4.1.3 Specialty Advertising
Specialty advertising is the giving away of useful merchandise such as pens,
calendars, T-shirts, glassware, and pocket calculators that are imprinted with the
donor's name, logo, or message. Because the items are useful and are often
personalized with the recipient's name, they tend to be kept and used by the targeted
audience, giving the advertiser repeated exposure. Originally designed to identify and
create goodwill for advertisers, specialty advertising is now used to generate sales
leads and develop traffic for stores and trade show exhibitors. Maya Toys could give either balloons or soft toys such as small balls imprinted their name on it free to kids at any crowded place as supermarket.
4.1.4 Trade Shows
A trade show is often used to promote goods or services to resellers in the
distribution channel. Retailers and wholesalers attend trade conventions and shows
where manufacturers exhibit their lines. Such shows are very important in the toy,
furniture, and fashion industries. They have also been used to promote the products
of one nation to buyers from another.
L.A. Gear used a trade show extravaganza to let retailers know about its
diversified product line. The company, which originally produced a line of teenage
fashion athletic footwear, expanded its offerings to include 80 women's shoe styles, a
men's and a children's line, and an apparel collection. But most retailers carry a
limited number of L.A. Gear styles compared to those of nationally recognized brand
names such as Nike and Reebok. To build its brand recognition among retailers, L.A.
efforts. In some cases, however, public relations is used as a dominant element in a
firm's promotional campaign. For example, in addition to advertising, Paramount
Pictures developed a public relations program to promote the Eddie Murphy movie
"Coming to America." The program was designed to change Murphy's image and
broaden his appeal beyond his hard-core, young male fans. In the movie, Murphy
plays a romantic and humorous leading man, a departure from his familiar tough-guy
role in previous films such as "Beverly Hills Cop" and "Trading Places." To stress
the versatility of Murphy's talent, Paramount prepared publicity releases for
newspapers and magazines and sent electronic press kits to television stations. These
efforts resulted in extensive media coverage for the movie. For example, several
magazines featured Murphy in cover stories, and radio stations gave the movie's
soundtrack additional playing time.
4.2 Selecting a Promotional Mix
Selecting the appropriate promotional mix is one of the toughest tasks confronting marketers, but there are some general guidelines to assist in determining the relative allocations of promotional efforts and expenditures among personal selling, advertising, sales promotion, and public relations. These guidelines might be stated as a series of four rules.
The first guideline is the decision whether to spend promotional monies on advertising or personal selling. Once this decision is made, the marketer needs to determine the level of sales promotion and public relations efforts.
5.0 BPA Free Product
BPA stands for bisphenol A. BPA is an industrial chemical that has been used to make certain plastics and resins since the 1960s.
In particular, BPA is found in polycarbonate plastics and epoxy resins. Polycarbonate plastics are often used in containers that store food and beverages, such as water bottles, and baby bottles and cups. They may also be used in toys and other consumer goods. Epoxy resins can be used to coat the inside of metal products, such as food cans, baby formula cans, bottle tops and water supply lines. Some dental sealants and composites also may contain BPA. And certain thermal paper products, such as cash register receipts, may contain BPA.
Some research has shown that BPA can seep into food or beverages from containers that are made with BPA or into your body when you handle products made with BPA.
Consumers want full disclosure about the products they buy, and are increasingly demanding alternatives to food packaging that can leach BPA into food. By moving to BPA-Free toys, Maya Toys Inc can stand out in the marketplace, adopt business practices that help achieve sustainability and environmental goals, and respond to changing consumer demands and preferences.
6.0 Merge with Safety Toys
6.0 Merge with Safety Toys
A merger happens when two companies are combined and the resulting company takes the form of the company who bought the other company. Why does one company buy another company? In its simplest form, it is the same reason that a company buys any other asset. Why does a company buy a piece of equipment or make an investment in stock of another company? It is because they think it is a good investment and they will earn a positive return on the investment. The goal of any business in a capitalist society is to maximize shareholder wealth and buying a company that helps accomplish that goal is seen as a good thing.
When Maya Toys Inc merges with Safety Toys, it could be eventually saved from The Union and bad reputation that it faces. Safety Toys are more financially stable and they have many trained skilled manpower, these will help shareholder’s of Maya Toys regain their lost. Though Maya Toys will lose their trade name and identity by merging with Safety Toys but it is a clever move to make when the business is not surviving.
Will Safety Toys agree to merge with the now drowning Maya Toys? Definitely yes because by merging with Maya Toys, they would double up the workmanship, double their production, get more ideas and finally multiply their profits.
When UEM Land Bhd proposed a merger with Sunrise Bhd, the thought process behind that was a marriage of potential. UEM Land has a huge tract of land in Iskandar Malaysia but in terms of reputation as a builder of homes, it lags behind the established players in the market.
By merging with Sunrise, which has built its reputation on building high-end luxury homes, the gap in skill set in theory would be filled.
The same is with the latest proposal to merge MRCB and IJM Land. The scenario is nearly identical in this case too where MRCB, entrusted to develop the huge Sungai Buloh land, finds itself short in terms of having the skills to build mass housing.
Its highest profile development job was that as the developer of KL Sentral.
For IJM, having its subsidiary merge with MRCB would again theoretically open doors for the construction giant to tap into the large housing market and also maybe start getting more involved in government related jobs.- The Star Thursday November 25, 2010
7.0 Conclusion
We can conclude that there are few ways for Maya Toys Inc to rebuild the losses. Some of the suggested ways are;
1. Go online – web hosting, online marketing & eBusiness
2. To have promotion, sales & discounts to pull the crowd eg: warehouse clearance, buy one
free one, ect
3. Point of Purchase Advertising (POP) – eg; having small booth at supermarkets to promote
and sell the toys
4. Specialty Advertising – give away balloons or small balls with Maya Toys name imprinted
on it
5. Trade Shows – taking part in exhibition
6. Emphasize on BPA Free toys – safe for children
7. Merge with Safety Toys
I believe with the above choices, Maya Toys could reshuffle the whole company and even grow bigger.
5.0 REFERENCE
J.T. Childs Jr. Founder, Ted Childs LLC. Managing Human Capital: Global Trends and Challenges Available from
Margaret Rouse, Search Financial Applications, tech Target. Available from
SAS Human Capital Management. Available from
Tim D. Nelson, e-business (electronic business). Available from
The UK Blog, advantages on having an online business. Available from
Quick MBA, strategic management, SWOT analysis. Available from
Katherine Zeratsky, R.D., L.D. Nutrition and healthy eating, Mayo Clinic. Available from
Rosemary Peavler, About.com Guide, Why Do Companies Merge? Mergers and Acquisitions Explained. Available from
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