PEST Analysis Of Threats In The Toy Industry

PEST Analysis

The PEST analysis strategic tool is a valuable system for recognizing opportunities and threats in the full scale environment. It works through the different segments of the full scale environment and prompts the organization to look at the particular ranges in depth. PEST stands for Political, Economic, Social and Technological. PEST is useful tools to the organizations because it can help the organizations to determine the opportunities that the organizations have and inform the organizations about the threats that it face. It helps the organization to characterize the way the business is formed, so the organization could change it.

PEST Analysis apply in toy industry

Political

Political factors decide the degree to which a

The advancement of technology is benefits to the organizations because it help to save costs and save a lot of works. It presents the most efficient methods for communicating with the customers (Jim Makos, 2015d). In order to compete with electronic games, traditional toy industry would need to improve new technologies to their products (n.a., 2015). Although advancement of technology could help to save cost but the transmission from traditional toys to high-technology toys will increase the cost of production (Ellen Crocker, 2014b).

Ansoff’s growth vector matrix

The Ansoff growth matrix is a marketing planning instrument which normally help a business in deciding its product and business sector development. This is typically determined by concentrating on whether the products are new or existing and whether the market is new or existing. There are four alternative of marketing strategies in Ansoff’s growth matrix which includes Market Penetration, Product Development, Market Development and Diversification.

Market

This shows that the company want to increase their sales by using the original marketing strategy (Ansoff, 1957). To attract more customers to purchase their products, the company needs to do more on advertising and promotions. Toys industry could sell the products that are not selling well in lower price to reduce wastage and it is easier to attract existing customers due to lower price (Chris Joseph, n.d.). Another ways to attract customer is the company could do a minor repacking on the existing products, so that the customer can feel something new to the products. Invite a famous celebrities to promote the products is also one of the ways that could increase sales.

Market Development

Choosing market development means the company want to reach new customers by using existing products to develop in the new market (Todd Ballowe, 2010). This would need to expand their market to new countries or add stores in country or state that with no or less competition (Neil Kokemuller, 2010). In the case of toy industry, it is difficult for toy industry to use this strategies because toys is known all over the world.

Product