1. Discuss why the supply chain is so important to Hasbro? Supply chain is defined as the marketing channels that consist of distributors (suppliers), retailers, and others who connect the company to its buyers. Thus, the supply chain describes a longer channel, stretching from raw materials to components to final products that are carried to final buyers – distribution channels, demand chain either going upstream or downstream, i. e. manufacturers suppliers wholesalers retailers consumers. The supply chain is so important to Hasbro for numerous reasons.
First reason is due to the loss of sales from empty shelves (especially during the holiday season). Toys are in high demand during the holiday season and if shelves are empty consumer demand would be extremely high due to a low supply and in turn Hasbro would not be making any profits due to the lack of sales. Second reason is due to the loss of profits from excessive inventories of unwanted product (especially returns from retailers). Hasbro sends their retailers inventory when requested and in time for consumers to purchase them, therefore the retailer’s inventories are not overstocked or under stocked.
Thus, Hasbro supplies them at a timely basis. Thirdly, high costs of inefficient, ineffective, or erroneous logistics because of the fact that toy making is a high-volume, low-price-point industry (just $1 of added handling costs to $19 toy can kill profits). This point refers to the price of distribution and logistics costs added in order to maximize profits and customer service, not sales. In order for Hasbro to achieve maximization in profit and customer service the company has to consider prices when it comes to warehousing, inventory management, transportation and logistics information management.
Lastly, differentiation creates added strains on the supply chain as the number of SKUs (Stock Keeping Units) increases. Having this differentiation means an increase in buyers and a greater demand amongst consumers, however in turn increases profits for Hasbro. 2. How should Hasbro manage competition between different channels and avoid channel conflict? What does a toy store think when a toy is on sale in a clothing store? What if the same toy is on sale in different locations for different prices?
Hasbro can differentiate on many dimensions, such as product design; the assortment offered various retailers (different toys to ifferent channels), guarantees for full allocations or timely delivery of popular toys, or exclusive deals on some toys in exchange for carrying other toys found in other channels. 3. If you were Hasbro (or the retailer) how might you differentiate the toys to avoid pure price competition with Wal-Mart or other retail chains? Options might include: bundling (or unbundling) accessories with the toy; creating special-edition toys; creating special packaging that highlights the retailer’s brand; co-marketing the product; creating special end-of-aisle displays or shelf-units; creating exclusive retailer-themed accessories, etc.