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New Venture Development in the Toy and Furniture Design Industry Report (Assessment)

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Updated: Jan 1st, 2022

Introduction

Analysis of business plan and marketing performance of the company engaged in toy and furniture design industry requires the in-depth analysis of the business plan and business opportunities that are available for the company. This analysis will be based on the review of the company’s performance intentions, as well as the volumes of the market in general. Considering the actual aims of the company, the opportunities and capabilities will be analyzed from the perspective of market demands and the consuming capability of the target audience as well as the competitive advantages of the company in comparison with other companies.

Internal Analysis

Type of business involves two business spheres: furniture and toy design, and manufacturing of toys and playroom furniture. This type presupposes the involvement of talented and skillful designers, as the sphere of design is rather specific, and requires application of creative thinking.

The target audience of the company includes young parents and families with children of pre-teen age. In fact, the audience may be extended if families where the birth is expected are included; however, they are not the main part of the target audience. Anyway, these people expect to see the non-standard approaches towards designing toys and furniture, as well as high quality and application of ecologically safe materials.

The needs, that business meets are associated with proper strategic approach as well as the thorough planning of marketing performance, resource allocation and promotion principles. Hence, Pikolino needs to develop a thorough plan aimed at analyzing the needs of the target audience, outline the key requirements of designing approaches, and develop the supply chain plan in order to have the approximate retail structure.

As for the competency advantages of the production, it should be emphasized that the company aims to pursue the implementation of several features. These are:

  • Multi-purpose. This presupposes the ability to modify the furniture in accordance with the changing needs of the growing “consumer”. It is intended for liberating parents from the necessity to buy new furniture regularly as a kid grows.
  • Functionality. Maximal ergonomics and maximal use for children. This is not a miniature adult furniture as numerous companies prefer manufacturing, but a high-functional set of furniture modules.
  • Education and Fun. Kids need to have an opportunity to study and develop. Hence, there is an opportunity to unite fun and education principles.
  • Safety. Ecological safety of materials is combines with safe shapes and absence of sharp parts that may injure an active or inattentive kid.
  • Beauty. Functionality and safety are the parameters that attract parents. However, this is the production for kids, hence, they should like it, and use with pleasure. (Hess, 2006)

Hence, the sense of the article is explained by the opportunity to perform the in-depth analysis of the business opportunities and target audience requirements associated with the design requirements, as well as the necessities to perform the thorough sphere analysis.

External Analysis

Business competency presupposes the opportunity to act in the circumstances of the extended competitive struggle. In fact, this will be difficult enough for Pikolino Company, as lots of other companies also involve the innovative approaches in design, and pursue the aims that are enlisted in product analysis part. Nevertheless, thorough analysis of the business plan helps to come to conclusion that business competency potential is rather high, and the company has chances to become a leader of the industry. (Paisner, 2006)

As for the team, it should be emphasized that the managerial part of the company involves experienced workers, as most of them have sufficient managing experience and huge ambitions as for starting the new furniture and toy design business, as the existing players do not satisfy the needs of the target audience.

Resources that the company needs are mainly associated with human resources and skilled workers, as the company needs creative designers as well as financial managers. Additionally, the company will need a reliable supplier for satisfying all the needs of materials.

Considering the effectiveness of business model in general, ineffectiveness of outsourcing manufacturing is highly doubted, as the design department is not linked with the manufacturing powers directly. This may create additional difficulties if new models are implemented and launched. (When Do I Need to Hire a Business Plan Consultant, 2005)

Overall Potential

  • Strength:
    • Ability to create a team of experienced professionals
    • Innovative design approaches
    • Ability to perform sustainable managerial principles
  • Weakness:
    • Inability to manage financial resources properly
    • Weak outsourcing manufacturing strategy
  • Opportunities:
    • Highly potential sphere
    • High demand for the manufactured production
    • Weak competition
  • Threats:
    • Restrictedness of the target audience
    • High requirements towards the innovations
    • Suspicious treatment of new players
    • Competitors in business
    • Unplanned delays due to certification, approval process etc.

In general the opportunities that are common for this sphere may be analyzed from numerous perspectives, however, there is no necessity to analyze the business environment using PEST matrix, as the company needs to solve internal problems first.

Recommendations

The venture itself is highly potential, as the target audience is ready to pay for the high quality furniture and toys for their children, nevertheless, it should be mentioned that this is not the high-priority production for the consumers. Additionally, most consumers make a purchase with the aim to use it for several years, hence, there is strong necessity to perform the financing of the promotion activity. Hence, I would not invest the creation of furniture venture industry, as the potential of financial returns depends on the speed of market development. Furniture market develops very slowly. (Manne, 2004)

If this was my own business, I would stop at toy venture structure, as toy market is more potential in comparison with the furniture sphere, nevertheless, it is less stable. Toys are regarded as the less demanding product, and the target audience of this product is larger in comparison with playroom furniture. As for the matters of diversification, the opportunities are few, however, there is more space for creativity and network development, as independently on the sizes of the city, the sales volumes are linearly proportional to the population volumes, while sales volumes of furniture are non-linear.

Conclusion

Finally, it should be emphasized that the actual value of the analyzed business plan is closely associated with the necessity to perform the detailed study of the market, and then provide the properly composed strategy associated with resource allocation principles, as well as the clear analysis of the business situation and the opportunities of the company. As for the internal analysis of the company, business plan helped to reveal that there are essential weaknesses in outsourcing strategy, as it requires proper control of the outsourced department.

References

Hess, E. D. 2006. The Successful Family Business: A Proactive Plan for Managing the Family and the Business. Westport, CT: Praeger.

Manne, A. S. 2004. Economic Analysis for Business Decisions. New York: McGraw-Hill.

Paisner, M. B. 2006. Sustaining the Family Business: An Insider’s Guide to Managing across Generations. Reading, MA: Perseus Books.

When Do I Need to Hire a Business Plan Consultant?. 2005. Public Relations Quarterly, 50(1), 6.

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"New Venture Development in the Toy and Furniture Design Industry." IvyPanda, 1 Jan. 2022, ivypanda.com/essays/new-venture-development-in-the-toy-and-furniture-design-industry/.

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IvyPanda. "New Venture Development in the Toy and Furniture Design Industry." January 1, 2022. https://ivypanda.com/essays/new-venture-development-in-the-toy-and-furniture-design-industry/.

References

IvyPanda. 2022. "New Venture Development in the Toy and Furniture Design Industry." January 1, 2022. https://ivypanda.com/essays/new-venture-development-in-the-toy-and-furniture-design-industry/.

References

IvyPanda. (2022) 'New Venture Development in the Toy and Furniture Design Industry'. 1 January.

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