Managing & Developing Innovations: Electronic Toy Car Business Plan

This report presents a comprehensive business plan for launching an electronic toy car and bike business, targeting the Tasmania region. The introduction highlights the growing market for electronic toys, driven by increased parental spending and technological advancements like remote control and mobile app operation. The market analysis focuses on the target demographic of children aged 1-20, with a strategic focus on Hobart, Launceston, and Devonport. The report includes a competitive analysis, identifying key competitors like Kidz Auto and Toy Universe, and a SWOT analysis evaluating the business's strengths, weaknesses, opportunities, and threats. A PESTLE analysis assesses the political, economic, social, technological, legal, and environmental factors affecting the business. Financial projections include initial capital, estimated sales, profit margins, and expenses, along with a break-even analysis. The report concludes that the business has strong potential but requires external funding to establish a market presence and compete effectively.

Managing & Developing Innovations 0
Title: Managing & Developing Innovations
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Managing & Developing Innovations 1
Contents
Introduction................................................................................................................................1
Market & Customers..................................................................................................................2
Target Market & Customers.......................................................................................................4
Competitive Analysis & Estimated Market Share.....................................................................5
SWOT Analysis.....................................................................................................................5
Pestle Analysis.......................................................................................................................6
Finance Forecast.........................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9
Image References.................................................................................................................10

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Introduction
With the changing times, there has been a humongous growth in the global electronic
children toy market, as the purchasing power of parents have increased, as they want to raise
the level of entertainment in their kid’s life. In the current times, electronic toys play a crucial
role in the early learning stage and in elaborating the imagination skills of children. Amongst
the different electronic toys, the demand for electronic cars and bikes in the current market is
immense, as it is available in different models and sizes. The electronic toy cars and bikes of
today are mostly remote operated, sensor operated, and also function through a mobile
application.
Image source: (i.ytimg.com)
Image source: (http://www.kidselectriccars.co.uk)

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Market & Customers
The most prominent factor that contributes to the current and future growth of the
electronic toy cars and bikes in the toy industry is the increase in the disposable income of
people and the digitalization of electronic cars and bikes with the help of latest technologies.
The electronic toy cars and bikes have utilized the sensor technology and another hi-tech
technology has increased the level of fascination to attract targeted customers. Also, the
continuous research in the electronic toy industry is going to transform the look of their
industry (Barker, 2017). The current market dynamics clearly states that from the toddlers to
the teenagers, the demand for this product in the market will accelerate with every new
addition. The other factors which have helped this market are various distribution channels
like different online platforms, stores, etc., and also the increasing utilization of online
shopping, which has helped the electronic toy industry to garner huge profits in a short span
of time. These two main factors will help in fueling the future market of electronic toy cars.
The current market of electronic toy cars has increased its customer base by providing
teenagers and older adolescents with ATV toy cars and bikes. This has helped in increasing
the customer base for the electronic toy cars and bikes. In the early childhood learning, the
parents have increased the utilization of electronic toys, thus, the market has also expanded to
newborn babies with various musical toy cars and bikes, which also have a push back feature.

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Image source: (www.lazada.com.ph)
Image source: (encrypted-tbn0.gstatic.com)
Target Market & Customers
The initial geographical region which has been finalized for the implementation of
this business idea are Hobart, Launceston, and Devonport. These three places have been
chosen for the commencement of this business, as they are small towns in Tasmania, who’s
45% of the population is children (Chang, 2017). Also, the big organizations of electronic toy
cars and bikes, do not dominate these regions. Thus, to commence a business it will an
appropriate approach to initially target the small regions and develop a customer base. Thus,
the business of electronic toy cars and bikes have a strong potential to excel as the maximum
population in these regions is of children (Sobel and Groeger, 2013). There are more than
150,000 children in the region of Tasmania. The business idea will target age groups from 1-
20 years, offering different electronic cars and bikes.
Regions Strategies Market Circumstances
Hobart Economical prices of
products to form a strong
Salamanca Market &
Toyworld Hobart has helped

Managing & Developing Innovations 5
market base.
The push and pull strategy.
in increasing the interest of
the people in electronic toy
products. Thus, the market
demand is growing.
Launceston Economical prices of
products to form a strong
market base.
The push and pull strategy
(Craig and Cunningham,
2017).
Toyworld Launceston has
increased the demand for
electronic toys in the region.
Devonport Economical prices of
products to form a strong
market base.
The push and pull strategy.
Toyworld Devonport has
also increased the demand
for electronic toys in the
region.
Competitive Analysis & Estimated Market Share
The biggest competitor of the business is Kidz Auto and Toy Universe. Both these
organization have been operating in the Australian market for years and therefore they have a
strong market base, which is their biggest strength. Also, both these organization have an
aggressive market strategy, which is very effective in attracting customers. Also, their
weakness lies in its after-sale services, which are very bad. The following analysis will
exhibit the different attributes of our new business -
SWOT Analysis
Strengths –
 New models of cars and bikes for all age groups from 1-20 years old.

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 The utilization of sensor technology and operating through a mobile application.
Weaknesses –
 The huge dominance of large organizations.
 The growing demands for video games and smartphones (Healey and Mendelsohn,
2018).
Opportunities –
 The new inventions in the field of technology.
 The increasing disposable income of people.
Threats –
 The sensor video games are entering the market with better services.
 The low-profit margin.
Pestle Analysis
Political Different political pressure can affect the
purchasing power of customers.
Economic The increasing taxes on electronic products.
Social Many people still consider these products as
wastage of money.
Technological The new advancement in the field of
technology will help the organization.
Legal The different legislations that the
organization can curb the organization’s
profits.
Environmental These products are mostly made of plastic

Managing & Developing Innovations 7
which is bad for the environment.
The distribution strategy which has been finalized for the organization is by opening a
store in all three locations and also, through the online shopping. The organization will also
launch its mobile application (Plowman, 2014).
Finance Forecast
Initial Capital $500,000
Funds from Stakeholders $800,000
Estimated sale for 1st year $1,500,000
Estimated Profit Margin for 1st year $700,000
Expenses for the Initial one year
(Production, Planning, Marketing, After
Services, licenses, Transportation,
Infrastructure – three stores, salaries of
employees, social media expenses,
development of the mobile application and
official website)
$800,000
The business idea will require external funding as it is crucial for the organization to
develop a strong niche in the market and thus, the organization has to incur huge expense on
marketing and other activities (Reece, 2019).

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Image source: (i1.wp.com)
According to this break-even graph, it is crucial for the business idea to attain a huge
sale and also, the selling price of the product should be more than the variable cost. For
instance, if the cost of one electronic toy car is $480 and the variable cost is $230, then the
contribution that is made to the organization per unit will be $250. And the fixed cost is
around $100,000, then the organization will have to sell 400 units (250*400) in order to break
even (Richards, 2010).
Conclusion
Thus, from the complete analysis, this can be formulated that the business idea of
electronic toy cars and bikes, is effective to enter the electronic toy industry and will help in
creating a strong niche by offering distinctive services, which will help in attaining a strong
market share. But for making a mark in the current competitive environment, it is crucial for
the organization to attain funding from external sources.

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References
Barker, G. (2017). Diminished Creative Industry Growth in Australia in the Digital
Age. SSRN Electronic Journal, 1(1), pp.10-20.
Chang, R. (2017). Educational Toys Market Expected to Grow 10 Percent through 2021 --
THE Journal. [online] THE Journal. Available at:
https://thejournal.com/articles/2017/07/18/educational-toys-market-expected-to-grow-10-
percent-through-2021.aspx [Accessed 12 Apr. 2019].
Craig, D. and Cunningham, S. (2017). Toy unboxing: living in a(n unregulated) material
world. Media International Australia, 163(1), pp.77-86.
Healey, A. and Mendelsohn, A. (2018). Selecting Appropriate Toys for Young Children in
the Digital Era. Pediatrics, 143(1), pp.10-20.
Plowman, L. (2014). Researching Young Children's Everyday Uses of Technology in the
Family Home. Interacting with Computers, 27(1), pp.36-46.
Reece, S. (2019). Spielwarenmesse: An insiders view on toy markets: Australia & New
Zealand. [online] Spielwarenmesse.de. Available at:
https://www.spielwarenmesse.de/magazine/article-detail/toy-market-australia-new-zealand/
language/1/ [Accessed 12 Apr. 2019].
Richards, G. (2010). Christmas under control [toy industry]. Engineering & Technology,
5(18), pp.42-43.
Sobel, L. and Groeger, L. (2013). Management Summary - Design Thinking: Exploring
Opportunities for the Design Industry and Business in Australia. SSRN Electronic Journal,
1(1), pp.5-15.

Managing & Developing Innovations 10
Image References
Child's Battery Ride-on Toys. (2019). Kids Electric Cars Buying Guide. [online] Available
at: http://www.kidselectriccars.co.uk/blog/kids-electric-cars-buying-guide/ [Accessed 12 Apr.
2019].
Encrypted-tbn0.gstatic.com. (2019). [online] Available at: https://encrypted-
tbn0.gstatic.com/images?
q=tbn:ANd9GcS0yq0ZSJMUT69xpBv894_dvxl7almtwx22XmEwm5Vctd0Apsrl [Accessed
12 Apr. 2019].
I1.wp.com. (2019). [online] Available at:
https://i1.wp.com/technewsrprt.com/wp-content/uploads/2012/11/11.27.12-jared-mo-break-
even-point.gif?fit=500%2C321 [Accessed 12 Apr. 2019].
I.ytimg.com. (2019). [online] Available at:
https://i.ytimg.com/vi/gLvotsLm0FE/maxresdefault.jpg [Accessed 12 Apr. 2019].
Lazada.com.ph. (2019). [online] Available at: https://www.lazada.com.ph/shop-kids-ride-ons/
[Accessed 12 Apr. 2019].