International Business Term Paper Example | Topics and Well Written Essays - 1500 words

International Business - Term Paper Example Toy industry is one of the growing industries of the world. It encompasses both electronic and non electronic toys and games. The global toy industry is not just associated with games and fun, rather it is dubbed as one of the hypercompetitive industries. The sector is characterized by secret product development practices and occasional indictment of corporate surveillance. Some of the major players in this industry are Hasbro, MGA Entertainment, Matteland, LEGO, Namco Bandai, Sanrio, Barbie and Steiff among others. In addition, the gaming hardware division sometime also comes under the toy industry. In this segment, Nintendo, Sony and Microsoft are the major players. The industry is driven by product innovation and strategic licensing. The reason behind strategic licensing acting as one of the key drivers of the industry is because most of the revenue of the toy industry generates from exporting or overseas marketing activities. On the other hand, product innovation is the only tool through which thousands of toy manufacturing companies differentiates themselves from the others. The surge in the population of children of below 12 years of age is playing a decisive role in increasing the demand for toys across the globe. As a result of that, the industry is growing at a steady pace. According to reports, in the year 2012 the toy industry was estimated to be at a value of 84 billion U.S. dollars. Out of the total industry value, around 20 billion is attributed to the US market only. Hence, it is obvious that in terms of total turnover USA is the leader of global toy industry. However, majority of the toys being used in the country is imported. Apart from the US, another major player in the toy industry is China. Some of the cheaper plastic toys that are found in stores, restaurants, daycares centers, fairs, homes and cereal boxes that are found across the globe are mostly manufactured in China. In terms of production, the Chinese toy industry is the largest in t he world. The industry generates billions of dollars and also employs millions of people across the globe. Hence, from the points made above it is believed that the scenario of the global toy industry is clear to the reader. (Source: Pierstransportation, 2012) In this report, a comparison of the South African toy industry and Seychelles toy industry will be carried out and do to the same, the study will make use of the different strategies and frameworks proposed by Michael E. Porter. Once a comparison between the two countries is drawn, the report seeks to provide a summative conclusion and recommendations pertaining to the caveats of investment and the business activity required to operate efficiently in that market place. South African Toy Industry Overview The overall scenario of the toy industry in South Africa is pleasant for the business owners as well as the government. The high turnover of the industry is playing effective roles in strengthening the national economy of Sout h Africa. The toys and games section witnessed a strong growth in terms of the value achieved. However, during the year 2009 when the country suffered a major economic downturn, the toy industry was negatively impacted. As per reports, the sales of traditional toys reached US$72.4 in the year 2009, thereby reflecting a decline of 3% from the previous year. One of the reasons for this is the shifting trends of consumers. The construction toys and activity toys accounted for the largest share of 18.5%. On the other hand, the sales figure of dolls and figure toys declined by 5%. In the similar way, the sale of indoor games also declined by 3% (Euromonitor, 2009). Furthermore, the recovery rate was also extremely slow due low spending of consumers in such products. As a result of that the industry is still in the process of recovery. The secondary research about the South African toy industry has shown that the country has been a major toy exporter (Hill and Jones, 2012). Furthermore, r eports have also suggested that the