Businessmodel of Hasbro

Customer Segments

Hasbro’s products are designed for consumption by general consumers, primarily children, who are able to purchase Hasbro products through various channels. While general consumers do make up a direct customer segment of the Company, its principal customers comprise a range of physical and online retailers and distributors, including wholesalers, distributors, chain stores, discount stores, drug stores, mail order houses, catalogue stores, department stores and other traditional retailers both large and small, as well as internet-based ‘e-tailers’.

According to its annual report, the Company makes the majority of its sales to large chain stores, distributors and wholesalers. During 2015, net revenues from derived from Hasbro’s top five customers accounted for approximately 39% of the Company’s consolidated global net revenues. This included revenue generated by sales to its three largest customers, Wal-Mart Stores, Toys “R” Us, and Target Corporation, which respectively represented 16%, 9% and 9% of net revenues for the year.

The US and Canada comprise Hasbro’s largest market, accounting for a little over half of the Company’s annual revenue. International sales, notably across Europe, Latin America and Asia Pacific, are also significant.

Value Propositions

Hasbro provides value to its customers in the following ways:

• The quality and breadth of its product offerings, including an extensive range of toys, games, television programming, motion picture content, and digital gaming content;
• Its brand reputation and industry standing, being one of the largest and most well-known companies of its kind worldwide, associated with quality and original content and products;
• Its global sales and marketing reach, with operations across North America, Latin America, Europe, Asia Pacific, as well as in other jurisdictions; and
• Its high-profile and popular intellectual properties and franchises, including lucrative and popular titles such as Monopoly, My Little Pony, Nerf, Play-Doh and Transformers. ### Channels

Hasbro operates  website at www.hasbro.com through which customers are able to find information on the Company’s various business activities and services. The Company also operates an online store hosted at the www.hasbrotoyshop.com domain, where general consumers are able to purchase toys and games directly from the Company.

As noted above, the majority of Hasbro’s sales are made to distributors, retailers and resellers. These sales are made by the Company’s own in-house sales teams that are organised by region across the world. Hasbro’s own direct sales force is supported by a network of channel partners that sell the Company’s products in jurisdictions that the Company does not itself maintain a direct presence.

In addition to its physical products, Hasbro licenses its properties for and creates its own television programming, motion picture and digital gaming content, which is distributed through various broadcast networks, digital on-demand platforms such as Netflix and iTunes, and gaming networks.

Customer Relationships

Hasbro operates an online sales channel named the Hasbro Toy Shop, where consumers are able to make purchases on a self-service basis, with no interaction with sales representatives required.

Hasbro’s sales to distributors and retailers, which comprise the majority of the Company’s business, are made primarily through the Company’s own in-house sales unit. This allows the Company to establish long-standing relationships with larger customers, consulting with clients to provide a tailored service. This approach is apparent in its ongoing relationships with high-profile customers such as Walmart and Toys “R” Us.

Hasbro operates a Consumer Care portal on its website, through which consumers are able to find a range of online resources, including FAQs, guides and recall information, instructions and safety information. They are also able to interact with customer support staff through an online chat service, email, and telephone assistance services.

Customers and consumers are also able to stay up to date with developments at Hasbro as well as across the industry more broadly by following the Company’s Newsroom portal – which includes press releases and articles, media events and email alerts. Additionally, customer can interact with Hasbro directly through its accounts with Facebook, Twitter and YouTube.

Key Activities

Hasbro is a global toy and games company.

It operates through four business segments: the US and Canada segment, which is engaged in the marketing and sale of the Company’s numerous products across the US and Canada; the International segment, which is responsible for marketing and sales to retailers and distributors across international markets in Europe, Asia Pacific and Latin America; the Entertainment and Licensing segment, which comprises the Company’s consumer products licensing, digital gaming, television and movie entertainment operations; and the Global Operations segment, which sources the production of the Company’s toy and game products.

Hasbro additionally provides entertainment offerings, such as original television programming and motion pictures, and other digital media products.

Key Partners

Hasbro partners with a range of companies worldwide, finding various different means of monetising its brand franchises and intellectual properties. Its partners primarily comprise technology companies, electronics producers, media and digital publishing agencies, programming and motion picture studios and software and application developers.

In recent years, the Company has launched tie-ups with partnerships with Panini to create a sticker collection for its My Little Pony content, with Kabam to create a transformers mobile game, with Shapeways to create Hasbro franchise-inspired fan art, with Xiaomi to produce Transformers-branded tablets, and with Paramount to create original content based on the Company’s franchise properties. In addition to this, Hasbro has a range of brand partners for which it produces branded toys and merchandise. This includes brands such as Marvel, Star Wars, Jurassic World and Sesame Street.

Hasbro also has a number of manufacturing and channel partners that assist in the production and distribution of its physical products. Notably, in 2015 all of the Company’s products were manufactured in third party facilities in Asia, primarily China, as well as in two located in East Longmeadow, Massachusetts and Waterford, Ireland.

Additionally, Hasbro has a number of social corporate responsibility partners, including GenerationOn, Toys for Tots, Operation Smile, Give Kids the World, and SOS Children’s Villages.

Key Resources

Hasbro’s key resources are its intellectual properties and franchise brands, its sales and distribution networks, its various partnerships, its manufacturing and production networks, its warehousing and logistics chain, and its personnel.

Hasbro protects its products and intellectual properties in a number of jurisdictions, through registered trademarks, copyrights and patents. Searches of records published by the US Patent and Trademark Office identified 17 patent applications filed in Hasbro’s name, including patent applications entitled ‘Projectile launcher with rotatable clip connector’, ‘Multidimensional alignment spacing for toy building elements, and ‘Device and method for an electronic tag game’.

Cost Structure

Hasbro incurs costs in relation to its product development activities, the sale and distribution of its various products, fees relating to the manufacturing and production of its products by third parties, the storage and transportation of its products, the creation of original programming content, and the retention of its personnel.

At 27th December 2015 Hasbro employed around 5,000 members of staff worldwide, all of whom represent costs in the form of salaries and benefits. Hasbro also operates a network of offices and facilities across its operating jurisdictions, accruing costs in the form of rental and utility fees.

Revenue Streams

Hasbro generates revenue through the production and sale of various physical products, such as toys and games, and the sale of media content and licensing of its brands. The Company organises its offerings into the following categories:

• Boys, including revenue generated from the sale of products and offerings based on its franchise brands targeted at boys, including Nerf and Transformers, and products related to partner brands for boys such as Marvel and Star Wars;
• Games, comprising revenue generated from the sale of the Company’s games face-to-face, board, off-the-board, digital, card, electronic, trading card, and role playing games;
• Girls, including revenue generated from the sale of products and offerings based on the Company’s franchise brands aimed at girls, including My Little Pony, Furby and Littlest Pet Shop; and
• Preschool, comprising revenue generated from the sale of the Company’s products aimed at preschool age children. In 2015 Hasbro generated $4.45 billion in annual net revenue, up on the $4.28 billion recorded in 2014. Of this revenue, the Boys product category was the largest revenue generator, accounting for $1.18 billion of the Company’s total net revenue for the year. Games accounted for $1.28 billion, while Girls and Preschool accounted for $798.24 million and $596.82 million respectively.