ENT 811: Case Study of 1uptoys in the Global Toy Industry

This case study examines 1uptoys, a startup focused on developing innovative toys, and its potential in the global toy industry. The analysis covers the attractiveness of the toy industry for new ventures, considering market competition, innovation, and seasonal sales patterns. It delves into 1uptoys' target market, competitive landscape, and government regulations. The study also explores the company's potential for global expansion, marketing strategies, and the company's inception, support received, and operational details, including employment, ownership, and industry associations. The case further discusses the company's competitive advantage, future plans, and the entrepreneur's perspective on the business environment, challenges faced, and entrepreneurial motivations. The assignment also covers the marketing strategies for the company to be applied on a global level. The analysis is based on the case study questions provided in the brief.

Case Study Questions:
1. Examine the international toy industry and give an analytic view regarding the
attractiveness of the toy industry for a new venture such as that proposed by
1uptoys.
The toy industry is believed to be full of innovation and high competition among the
participants. The innovation is in terms of the new technology as most of the toys do
not get acceptance from the market. The market performance is concentrated on the
holiday season and the sales shot up during the Christmas season because of extensive
gifting. The months of November and December together contribute to around 45% of
the total sales of the toys in the market. The market is very promising, provided that
the participant who wishes to enter the market, offers new and innovative toys in the
market and competes the other participants on price point and marketing. The best
part about the market is that if some product is categorised as a “must have” for
children and it gets the desired response from the market, it becomes a hit in the
market and can sell huge volume of units. Another very important aspect associated
with the market segment is that the selling point of the products is associated with the
“sentimental” aspect of the customer. Most of the customers are parents who are very
sentimental about their children, so “impulsive buying” supports the sales of the
products (Flynn and Jacobs 2016).

2. Discuss the target market in terms of number of established firms competing,
government regulations registration of patents etc for a company like 1uptoys.
The target market as planned and focussed by 1uptoys is a very niche segment and it
is not for the masses. The company has targeted a very planned and systematic market
segment, which involves participants that are large corporations. The advantage for
1uptoys is that the market segment is not very “Crowded” in terms of participants and
the players that form the part of the market segment are highly organized. The
competent members of the market segment are major players such as Toys R Us,
Mattel Inc. and Silverlit. The government regulations in the market segment are very
strict because of the nature of the products and that these products are aimed to be
used by children (Lin-Hi and Blumberg, 2017). All the major players in the market
segment are well organized and they comply with all the regulations that are laid
down by the government. The market segment involves great deal of innovation and
invention related to new toys and technology and this innovation is required to be
duly patented and registered under the firm’s name.
3. Should the company venture into global toy industry?
The structure of the company is very promising and the company has been formed in
a very organized manner from the very first instance. The company can venture into
the global market because it has the required exposure to the market functioning and
how the global players function. Ronald Mannak has great hold over the market and

knows how the market operates. Moreover, 1uptoys has signed a deal with Silverlit
since 2006 and it has the much needed technological as well as manufacturing
support. Silverlit can also support 1uptoys in terms of market distribution and sales, as
it has a huge network of sellers in Asia, Europe, North and South America. Ronald
Mannak has to rework the part of the deal that was almost agreed upon by both the
parties earlier (Chen, Hu and Muralidharan, E., 2016).
4. Effective marketing strategies to be applied in such a case.
The marketing strategies that are suggested for 1uptoys if it wishes to project its
products on a global level involve the aggressive communication of its unique
technology. The technology that is offered by 1uptoys is actually very distinct and
uncommon. The marketing strategy should revolve around communicating the use of
state-of-art technology to provide the best virtual music instrument technology
developed within the toys for children (Gallagher, 2018). The sales points also help
in communicating the brand with their target customers and major supermarket brands
such as Wal Mart and Kmart can serve the perfect sales points for the brand. Also,
there should be aggressive “discount” campaign revolving around the holiday season
in November and December, because that is when the majority of the sales is
achieved. Also, when the brand is communicated through “gifting”, it creates a long-
lasting impact among the target customers (Lin-Hi and Blumberg, 2017).
5. When did the company begin?

The company began with an offer which was propelled by an agency which offered to
give loan to the founder Mr. Ronald Mannak, back in 2006. Mannak had been denied
a bank loan by Dutch state bank, back in the day and this offer by the other financer,
SenterNovem, which is a government agency motivated the founder to pursue the
venture once again. The preliminary study and research related to the project and the
venture had already been conducted by Mr. Mannak which helped in formulating the
company plan and execute the required business plan in an effective manner
(Heljakka, 2018)
6. Did 1uptoys receive support from family/friends? Community organisations?
Government? Other businesses?
The major support that Ronald Mannak received was from his friend Patrick Grasso
and they both ventured into the company together. In the initial phase of the start-up,
both the partners invested their life savings into the venture because they could not get
the desired support from the government, finance agencies or other associations.
Patrick Grasso became part-time promoter of the company and did not withdraw any
management fees, but owned about 45% of the company. All other colleagues of
Ronald Mannak did like the idea of the venture, but did not get involved with the plan
or gave financial support to the idea (Flynn and Jacobs 2016)
7. How many people does 1uptoys employ?
The main promoter of 1uptoys is Ronald Mannak as the company is considered as his
“brain child”. Patrick Grasso has played a vital role in finding the company and thus
has been a 45% partner in the venture. In May, 2006, Martin Luxen was hired by the

company and has been responsible for heading the electronics division and has been
developing electronics for the new musical toys. The responsibility of designing the
products lies with Joris Beets who has been associated with the company since its
initial days.
8. Who are the owners of this company? Is it the sole owner?
The company has been a partnership company and Ronald Mannak and Patrick
Grasso have been the partners of the company. Ronald Mannak holds 55% of the
company ownership and Patrick Grasso hold 45% of the company ownership.
9. Which of the following organization forms apply to this business?
 Corporation
 Sole Proprietorship
 Partnership
 Non-profit organization
 Branch Plant/ Sales Office
 Co-operative
 Franchise
 Other
1. Is this company part of any industry association?
Example:
 Canadian Manufacturers and Exporters (CME)
 Newfoundland and Labrador Association of Technology
 Industry (NATI)
 Newfoundland Ocean Industries Association (NOIA)
 Newfoundland and Labrador’s Organization of Women

 Entrepreneurs (NLOWE)
 Chamber of Commerce/ Board of Trade
 Newfoundland and Labrador Environmental Industry
 Association
 Other, Please Specify
1uptoys has been associated with Stichting Nieuwe Bedrijvigheid Rotterdam, which is
a foundation that supports promising start-ups and upcoming business ventures.
Stichting Nieuwe Bedrijvigheid Rotterdam had assigned Bart Blokhuis as a mentor
for 1uptoys to provide advice and support as and when required.
2. How did the business start? Where did he get the idea?
The business begand with the idea that was conceived by Ronald Mannak and the idea
was based on the promising market segment of children toys and the viability that it
promised.
3. Did anyone inspire him to start his own company?
Ronald was inspired by the viability options that were promised by the toy industry
and the rave reviews and feedback that he received from the audiences where he
showcased his prototype.
4. Tell me about what your company does? What products or services do you offer?
The company is a children toys company which offers new age toys and technology to
the children and it provides virtual music instrument experience to the children that
use it.
5. Who are his customers? Where are the markets? How did he reach these markets?

The customers are parents who wish to give their children something new and
promising. The product is innovative and different from the regular gifts and this is
the major reason that it receives widespread acceptance from the market. The product
is acceptable in international market and is not confined to any particular class of
people (Lin-Hi and Blumberg, 2017). Ronald observed major toy companies very
closely and saw their market trends that were very promising and thus the idea of
1uptoys was born. Ronald reached the markets with strategic partnership with the
Silverlite group, which already had a wide international network of sellers and
resellers across Asia, Europe, North and South America.
6. Does he export any of his products? If yes, where do he export? If he exports to other
provinces in Canada or the USA, indicate the provinces or states. If no, is he
interested in exporting in the future?
1uptoys does export the products and the sales in USA, majorly depend on the La
Grande Récré, and more generalretailers, such as Carrefour and Wal-Mart. Ronald
Mannak is interested to venture into global market more aggressively and wishes to
partner with Silverlite to expand the market channel internationally.
7. What is his company’s competitive advantage/how are he positioning his company?
The competitive advantage of the company is that it depends majorly on the new-age
technology that develops virtual music instrument based toys for the children
(Goodchild and Toy, 2018). The company has great advantage in comparison with the
other competitors of the market and it can expand aggressively on the patented and
self-developed technology. The company is positioned strategically and it is well
received by the market, because of the effective sales channel (Flynn and Jacobs
2016).

8. What is his future plan for this company? Any plan for expansion?
Ronald Mannak thinks of expanding the company aggressively in international
market. Ronald has experienced challenges earlier in the initial phase of the start-up
which was related to the funding of the organization. Now that the financing function
is projected to be stable, it can rapidly expand in the market.
Business environment questions:
1. To what extend has he the attitude toward doing business in this provice changed
during his business career? ‘
> Becoming more positive
>Becoming more negative
> No change
2. What has caused his change in attitude?
The market response that is received by the company has helped Ronald develop a
more positive attitude for the business.
3. What challenges do he face starting and operating the company?
The major challenge was associated with the financing function of the company
that was earlier experienced in start-up phase of company.
4. What do he feel is the potential for this industry in the future?
The venture is very promising and it has a lot of potential in the market with the
children toys industry being highly organized.

Entrepreneurial details questions:
1. Why did he want to become an entrepreneur?
Ronald wanted to become the entrepreneur to materialize his dream of adding
value to his life and the people around.
2. What are the benefits of being an entrepreneur?
One does not have to depend on others, and one enjoys complete freedom to
expand on personal ideas.
3. What do he enjoy the most about owning his own business?
The freedom that it offered and the amount of creativity that can be involved
without any restriction from the bosses.
4. What advice would you give to another would-be entrepreneur?
To follow one’s dreams and be confident about the market findings and the
observations that you make while researching the concept.
5. Why do you need to feel your company is successful? Remember, success can be
defined in many ways.
The company is successful because it offers something new to the monotonous
market and it is well received by the target customer.
6. What lessons have he learned along the way?
Lessons learnt; never rely on others to realise your dreams and never take things
easily. Consider a challenge as a challenge.
Public relation questions:

1. Has the company received any media attention (Magazine or newspaper articles?
The company has garnered great impact from the market via print media as the
technology is well-communicated in the market.
2. Have he or the company won any awards or gotten special recognition?
Partner company Silverlite is an ISO recognised company which is recognised for
its quality and it helps 1uptoys as a brand.
Labor market questions:
1. What skills do you look for when hiring an employee?
The candidate must be loyal and possess a “learning attitude without any rigidity
that can form a challenge for personal as well as organisational development.
2. Please list the positions that make the business function.
The major positions are top management, marketing team, sales team and the most
important in case of 1uptoys is the technology department.
3. Does he have difficulty in securing or retaining certain positions? If yes, which
positions? Why do you think is a difficulty in recruitment?
Retaining the marketing position has been challenging because of the involvement
of major sales companies for the role of product sales.
4. What is the most memorable business moment? A business highlights.
The most memorable moment has been the invitation by government agency to
fund the idea, because it was the moment which propelled the whole business idea
forward.

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