HOW HASBRO RESPONDED TO NON-LINEAR CHANGE

From 2001 to 2015, a period that included the dot- com bust and the Great Recession, Hasbro’s stock price rose from $ 11 to $ 72, while that of its main competitor, Mattel, rose from $ 15 to just $ 25. Hasbro thrived by responding nimbly to the weak signals that heralded dramatic non- linear changes in the family entertainment industry. Below are some of them.

DISRUPTIVE TECHNOLOGIES

Monopoly and other board games dominated in the early 1990s, but new technologies soon disrupted the gaming space:

• Games found a new platform on digital and hand-held devices

• Games as apps created dramatically lower entry barriers

• Digital games spread virally and achieved global volumes, upending traditional revenue models

NEW DISTRIBUTION CHANNELS

In the early 1990s, toys and games were distributed primarily through brick-andmortar retail outlets. Then:

• Big-box stores began squeezing out mom-and-pop stores and boutiques

• Amazon and other e-commerce players emerged

FUNDAMENTAL CUSTOMER SHIFTS

In 1995, Hasbro’s primary target consumers were 15 and younger. Over the next two decades:

• Dual-career parents spent less time with their children but had more disposable income. Per capita spending on children increased

• Parents began to prefer toys and games with apparent “enrichment” value

• As children became increasingly hyperscheduled, competition for their time and attention intensified

• They were alone more often and preferred fast-paced video games

• Grandparents, who often cared for young children and now had more disp- osable income, became attractive target consumers

• More people were playing games while commuting on trains or buses

NON-TRADITIONAL COMPETITORS

Since 1995 new competitors have emerged:

• Technology and consumer electronics companies such as Electronic Arts, Microsoft, Sony, and Nintendo

• Smartphones and other products from the convergence of telecommunica-tions, computing, and consumer electronics

• Media and entertainment companies such as Disney

• Tech-savvy local gaming companies from China and India

• Big players that offer private-label store brands

GLOBALISATION

In 1995, Hasbro was primarily an American company. Now globalisation has provided new opportunities:

• Birth rates are rising in poor countries while declining in rich ones

• Emerging markets — with their differing concept of play, low affordability, and unique distribution channels — demand new competencies and new business models

• They offer a low-cost manufacturing base and are sources of inexpensive and highly skilled talent.