Porter's Five Forces
Tom: “I have a huge Cars collection!!”
John: “I have a huge Lego collection!!” The conversation among the kids goes on this way at most of the times about their toys collections. A piece of toy can make or break the relationship among the kids. Toys make kids world colourful right from the birth till their adolescence. One of the well-established and successful transnational firms in the Toy Industry is Toys”R”Us; the name itself brings the Stars, Smiles, Delights among the kids. Kids across many countries worldwide are lucky enough to have Toys”R”Us at the next door, but Indian kids are still longing for Toys”R”Us to be their next door.
This essay analyses the positives and negatives of India using Porter’s Five Forces and concluding whether Toys”R”Us can consider stepping into the country or not.
About India
Here is the statistical analysis done by World of Toys (Undated) on Indian toy industry:
India’s population is around 1.23 billion people and ranked as the second largest nation in the world. The average population growth is about 1.6 per cent per year. A particularly remarkable feature is the enormous population density in the cities: 40 cities had more than 1 million inhabitants in 2011. More than 10 million people live in each of the three largest metropolises of Mumbai, Delhi, Chennai, Bangalore and Kolkata.
Since 1991, numerous reforms have transformed the country into one of the fastest growing economic powers. India emerged from the strained world economy as one of the winners due to its strong domestic market. Between 2003 and 2011(except 2008-09), India’s Gross Domestic Product grew constantly by about 8.8 per cent annually (shown in Figure 1) and amounted to some 1.68 trillion US dollars in 2011.
Figure 1, GDP growth in India and other large emerging economies, OECD, 2011
India has the fifth largest retail trade in the world. Experts expect this to grow from 385 billion US dollars in 2007/08 to 405 billion U.S. dollars in 2009/10, and
John: “I have a huge Lego collection!!” The conversation among the kids goes on this way at most of the times about their toys collections. A piece of toy can make or break the relationship among the kids. Toys make kids world colourful right from the birth till their adolescence. One of the well-established and successful transnational firms in the Toy Industry is Toys”R”Us; the name itself brings the Stars, Smiles, Delights among the kids. Kids across many countries worldwide are lucky enough to have Toys”R”Us at the next door, but Indian kids are still longing for Toys”R”Us to be their next door.
This essay analyses the positives and negatives of India using Porter’s Five Forces and concluding whether Toys”R”Us can consider stepping into the country or not.
About India
Here is the statistical analysis done by World of Toys (Undated) on Indian toy industry:
India’s population is around 1.23 billion people and ranked as the second largest nation in the world. The average population growth is about 1.6 per cent per year. A particularly remarkable feature is the enormous population density in the cities: 40 cities had more than 1 million inhabitants in 2011. More than 10 million people live in each of the three largest metropolises of Mumbai, Delhi, Chennai, Bangalore and Kolkata.
Since 1991, numerous reforms have transformed the country into one of the fastest growing economic powers. India emerged from the strained world economy as one of the winners due to its strong domestic market. Between 2003 and 2011(except 2008-09), India’s Gross Domestic Product grew constantly by about 8.8 per cent annually (shown in Figure 1) and amounted to some 1.68 trillion US dollars in 2011.
Figure 1, GDP growth in India and other large emerging economies, OECD, 2011
India has the fifth largest retail trade in the world. Experts expect this to grow from 385 billion US dollars in 2007/08 to 405 billion U.S. dollars in 2009/10, and
References: Age distribution (2003), NationMaster.com, viewed 13 Aug 2012, < http://www.nationmaster.com/country/in/Age_distribution>. Economic Survey of India 2011(2011), OECD, viewed 11 August 2012, < http://www.oecd.org/india/economicsurveyofindia2011.htm>. Role of Agriculture in Indian Retail (2011), GLOBALG.A.P, viewed 11 August 2012, <http://www.globalgap.org/cms/upload/Resources/Presentations/TOUR2011-Delhi/GLOBALG.A.P_TOUR2011_Kumar-Spencer-Retail-low.pdf>. Stuart Wall, Sonal Minocha & Bronwen Rees (2010), 3rd Edition, International Business, Prentice Hall & Financial Times, London. Tazyn Rahman (2012), Organized Retail Industry In India – Opportunities And Challenges, IJRFM, vol. 2, no. 2, viewed 9 August, 2012, <http://www.mairec.org/IJRFM/Feb2012/6.pdf>. Toy Markets in the World (2010), ICTI, viewed 8 August 2012, <http://www.toy-icti.org/PDFs/ToyMarkets10.pdf> Toys (Undated), Tradeindia, viewed 1 Aug 2012, <http://www.tradeindia.com/Seller/Toys/>. Utku Tansel (2012), Euromonitor, viewed 13 Aug 2012, <http://blog.euromonitor.com/2012/03/with-worlds-largest-0-14-year-old-population-india-is-an-attractive-market-for-toys.html>.