Mega Bloks Swot Analysis

SWOT Analysis – Mega Bloks

Internal environment

• World market-share leader in the preschool construction toy segment (strength)

• a global well-known brand which makes Mega Bloks easier to enter new markets

• Has 3,000 employees and sells a line of 75 to 100 items in four sizes in 100 countries (strength)

• has intellectual asset, human capital, and resource for products developments

• Grown exponentially in the past five years (strength)

• had experience in international markets expansion

• Has licensed to use popular characters such as Hot Wheels and Barbie (Mega Bloks, 2014)  (strength)

• use of well-known brand names increases its acceptance in new markets

• Had work with three different Japanese distributors with only marginal sales success (weakness)

• need to look for a different strategy in distribution of products

•  Only one marketing director responsible for Asia, Australia, Africa, Eastern Europe, Middle East, and Japan (weakness)

• may not be able to focus on individual marketing needs

External environment

• Japan has the second largest toy market in the world (opportunity)

• Has huge room for sales growth

• Japanese retailers are more varied, fragmented, and relationship oriented (threat)

• Partner with a large Japanese distributor or manufacturer, or invest in direct sale

• Japanese consumers are quality oriented

• Require more control in product quality

• Japanese have strong sense of their culture

• Products must be modified to look and feel like Japanese to gain share of the market

• Smaller living space in Japan

• Need to customize packaging accordingly

• Exchange rate risk

• depreciation of Yen could turn profit into loss, risk management such as hedging should be considered

The four most important internal factors:

1. Mega Bloks is the leader in the world market-share in the preschool construction toy segment as well as the world second-largest construction-toy manufacturer, its brand name gives Mega Bloks an advantage head start in new market.
2. Mega Bloks has 3,000 employees and sells a line of 75 to 100 items in four sizes in 100 countries; it has the ability to develop a new product line by utilizing its experience, facilities, expertise, and resources.
3. Its past experience with small Japan distributors indicates that Mega Bloks required a more feasible way to distribute its products. Research has shown that Japanese retailers are more varied, fragmented, and relationship oriented; options for Mega Bloks include developing its own sales and distribution company (direct sale), or partner with a large manufacturer/distributor to take advantage of its existing distribution network.
4. Since Mega Bloks has the license to some well-known toy characters, such as Hot Wheels, Barbie, Power Rangers, etc (Mega Bloks, 2014); to successfully entering a new market, it’s always good for business to provide a familiar feeling for consumers; Mega Bloks might consider incorporating these already popular characters to launch its product lines in Japan.