Children's Educational Toys Business Plan

ToyLearn will leverage its two competitive edges (educational and engineering expertise) to produce educational toys that are fun to use and at the same time successful at building important skills for youngsters. By recognizing and exploiting its core competencies, ToyLearn will quickly gain market share as well as develop a reputation for making effective teaching toys.

5.1 Competitive Edge

ToyLearn has two competitive edges which are based on their core competencies, education and engineering. Please refer to the Management summary for more detail, but basically ToyLearn will be leveraging what they do best to create a product that is in demand by the market.

5.2 Marketing Strategy

The marketing strategy will emphasize the fact that ToyLearn’s products are truly educational devices that are fun. This is an important message because parents will want their children to play with this type of toy. The element of “toy” in the product is used to keep the children engaged in the product, something often difficult to do with most educational devices.

The marketing strategy will recognize and account for the fact that there are two distinct customer groups that must be attracted. To capture the awareness of both groups, ToyLearn recognizes that the groups are very different regardless that they are buying the same product.

ToyLearn will use advertisements and direct mailings. The advertisements will be placed in magazines or journals chosen specifically recognizing who the target audience is. Magazines will be used for the individuals market and a combination of magazines and journals will be used for the businesses segment.

5.3 Sales Strategy

The sales strategy will be tailored for each customer group. The sales strategy for individuals is to create enough awareness of ToyLearn so that customers are asking their retailers to carry ToyLearn for them. To address the business segment, it is ToyLearn’s goal that the businesses are not just buying one or two of the products but that they are buying all of them addressing different skills, all of which are important. This is especially important as businesses are generally repeat customers, meaning that if the customer is happy with the product, it is more than likely that they will become a long-term customer and not look for new vendors.

5.3.1 Sales Forecast

The first three months will not see any sales as the organization will be ramping up production and establishing sales channels. The first year is forecasted to have a fairly slow sales forecast because of the fact that ToyLearn is a start-up organization. Growth for year two and year three should be fairly steep. After year four it is forecasted that growth will continue, but at a more sustainable rate than during the second and third year.

5.4 Milestones

• Business plan completion;
• First prototype complete;
• First standard production run;
• Monthly sales over $10,000;
• Profitability.

5.5 Operations Strategy

ToyLearn will outsource the manufacture of all of its products. Jen and David opted for an outsourcing model for a number of reasons.

1. Neither of them have a manufacturing operations/supply chain experience.
2. Outsourcing will keep overhead costs to a minimum, making all production costs variable.
3. Outsourcing will allow the management team to focus on marketing and new product development.
4. Reducing the financial risks by not committing to the expense of a manufacturing facility.
5. Increasing the scalability of the business model.