Entrepreneurial Opportunities Report: Novelty Toys - Market Analysis

This report provides an in-depth analysis of entrepreneurial opportunities within the context of Novelty Toys, a toy manufacturing company. It begins by exploring potential sources for innovative business ideas, drawing upon Peter F. Drucker's insights on management and innovation. The report then delves into the rationale behind entrepreneurial ideas, utilizing tools and techniques to identify market gaps and unmet customer needs. It differentiates between primary and secondary data collection methods to assess market potential, and further examines strategic data specific to the UK toy industry. A SWOT analysis is conducted to evaluate the company's internal strengths and weaknesses, as well as external opportunities and threats. The report concludes with an overview of external factors affecting the toy manufacturing environment.

Entrepreneurial
opportunities

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1 .................................................................................................................................................3
Possible sources for new and innovative business ideas.............................................................3
LO2..................................................................................................................................................4
The rationale and market gap for the entrepreneurial ideas using tools and techniques.............4
LO3 .................................................................................................................................................5
P3 Primary and secondary data for identifying the potential market .........................................5
P4 Strategic data to identify market potential.............................................................................6
LO 4.................................................................................................................................................7
P 5 SWOT analysis to collate evidence to support a specific entrepreneurial idea....................7
P 6 External factors that effect the environment of the toy manufacturing firm.].....................8
Conclusion.....................................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Entrepreneurial opportunities usually refers to the situations whee all the products and
services has been sold at greater price then the cost of production and manufacturing, but also the
problems with the notion of the entrepreneurial opportunity that are the entrepreneurship is all
future -oriented actions. Novelty toys manufacture all age groups toys for children and kids and
also licensed across multiple categories of toys such as teddy, bikes, remote control cars, dolls
etc. this report will examine the possible sources for the new and innovative ideas and also the
rationale and market gap of the entrepreneurial ideas suing tools and techniques. Furthermore, it
will describe the primary and secondary data for identifying the potential market and also the
entrepreneurial ideas in the context of competitors and market that makes an potential
viability(Davidsson, 2015).
LO1
Possible sources for new and innovative business ideas
Peter F. Drucker is basically known as the inventor of the modern management, which is
a valuable resources on the management, leadership and business innovation. It has been talk
about the power, necessity an systematic innovation of the business. There are some 7 sources of
the new and innovative business ideas.
The unexpected:- There are lots of surprises which is not only for the failures but also
for the unexpected success. For that its important to continue study for the current trends of the
market. Its important for Novelty toys for the expecting the unexpected success, failure and
surprised because business has to ready for anything and whole market can change dramatically
by the unexpected decisions of the people.
The incongruity:- it basically relates to the different thinking and new ideas where the ideas of
the Novelty entrepreneur has to think different from the society and market where it has to find
so many creative ideas for selling and also think different for discovering new invention which is
good for Novelty toys because it is a key to widely expand the business from new
tricks(Ramoglou and Zyglidopoulos, 2015).
Process needs:- its is one of the most important sources where the company has find out
the process needs of the company where the entrepreneur has to focuses on task rather then the
situations. This source is looking for the opportunities for the innovation which comes after

looking closely to the process of the Novelty toys where it is weak or strong and also where it
has to improved which has been fixed in the innovative ways.
Industry and market structure change:-There are so many changes has been regulate
the changes some products lines has been expand others and shrinks. The structure of the
Novelty can be stable for so many years with the development of the technology. In this the
leader keep eye on the changes and treat the changes not like threats but more lie the
opportunities for the Novelty toys.
Demographics:- It is essential for the changing population and it has been constantly
seen the changes occurs in the population such as the income levels, human capital and age
ranges of the Novelty toys. The changes affect the market which has been determined the
demands of the products and services about the quantity of buying, who is buying etc. the
changes of the demographic such affect the market of the Novelty toys.
Change in perceptions:- there are so many significant changes comes in the world of
customers and buyers. Perception has been changed over the time and nowadays due to the
involvement of the technologies and also the power of the social networks and the changes
happen faster. Changes of the perception open a road for the business for innovating and
developing the new products of the Novelty toys and also align the services with the new
perspectives for the customers(Prandelli, Pasquini and Verona, 2016).
New knowledge:- it is often used for the innovation and speed up of the technology
revolution has increases day by day as well as increases the opportunities which open up. New
knowledge of technology both scientific and non scientific where the owners of the Novelty get
in touch with the technology for ruining the business and also provide the online services to the
customers which impact positively in the market.
LO2
The rationale and market gap for the entrepreneurial ideas using tools and techniques.
Rationale
it is set of logical basis and reasons for the courses of actions and beliefs. It has been
analysed from the above resources that its important to understand the market and fulfil the
demands and needs of the customers. According to the Drucker's sources it has been showed
that its important have the systematic ways to run the new business which has been launched and

how to manage it according to the time and also according to perception of the
customers(Davidsson, 2017).
It also show the overall objective for the purpose of doing new business and also the aim
and goals of achieving something. It helps in achieving the task and objectives which has been
refers by the sources of doing the new and innovative business. It control the things and also
helps in doing the business and find the logic behind doing the business. It helps in adopting the
new technology which develops the business. It underlying the reasons which creates conflicts an
problems in the growth of the business.
Market gap
an unmet needs of the customers and groups which has potential customers for
purchasing the goods and services not yet but in future. Gap of the market means the gap which
has been not fulfilled by the Novelty not yet but in future. It means there are so many
opportunities which has been arises at the time of doing the business. Its important to take the
changes as the opportunity rather then threats because it helps in developing the business and
also fulfilling the gap of market(Walliman, 2017.).
Novelty toys is leading suppliers, distributor and manufacturer of the branded and
licensed toys for kids in multiple categories which has been supply to so many retailers and it
promote their business as the world play to the children's and kids for all the age groups. The
team of the Novelty supported by the all big brands.
There are so many challenges which has been faced by the Novelty toys because its not
easy to adopt the new changes in technology because it takes he cost and time for understanding
the new technology. It takes so much time to reach other retailers of the toys industry because it
takes time for expanding the business and understanding the market.
LO3
P3 Primary and secondary data for identifying the potential market
Research methods
It is a process which used in collecting the data an information about the relevant topics
and task. From collecting the data and information helps in making the decision of the
business(Prada-Ramallal and et.al., 2018.). There are two types of data collection for observing
the potential market for the business such as;
Primary data

This data has been collected by the researcher from the first hand sources, from using this
methods helps in collecting the data through, surveys, interviews, experiments etc. it has been
collected for the particular research project in the mind and directly from the primary and
original sources. This term has been used in the contrast of the secondary data.
Secondary data
The term secondary data has been refers to the which has been collected by the third
person or someone else who is other then the user. The source of the secondary data is for
including the social science of the potential marketing and also the information has been
collected by the other sources such as information collected from internet, television, books and
journals, records of organisation for the purpose of identifying the potential market.
In this research methods the entrepreneur of Novelty has been used the secondary data
method for collecting the data and information about the potential market because it helps in
identifying the potential market for the new start-up of the Novelty toys and it helps in observing
the current market trends and also current situations of the market. From collecting the
information from books and journal helps to take the proper knowledge about the potential
market. It also find the place of establishing the business where it grows faster and also visible
for the customers(Johnston, 2017).
P4 Strategic data to identify market potential
The toy industry in UK has a proud history of development and manufacturing the toys
over the last hundred years and still it is one of the largest toy markets which has highest per
capita spend in Europe. The united kingdom is the fourth largest market for toys in the world
today. The British Toy and Hobby association links manufacturers and suppliers and include
members hornby,Lego,Mattel Hasbro. The toy industries of UK has well connected with this
members to build the growth of toy industries by including retailers and traditional wholesalers.
The retailing structure of UK is also very unique and reflects the importance of toys in children's
life(Ramoglou and Tsang 2016). Toy retailing in the UK has generated GBP 2 billion in revenue
to support the local economies and after 2013 to 2018 the annual growth of toy industries of UK
has reached market average of 1.3%.(IBIS World).In 2010,GBP 16.5 billion was spent on
games ,toys and in 2016 it was reached to GBP 21.83 billion. And there are more than six
hundred retailers who are currently operating with the sales chain of the UK toy industry. Over
thirteen thousand people of UK are employed because of this toy industry. The toy industries of

UK sold four hundred million units each year. There are several uncertainties which has given a
negative impact on the UK toy industry. The coming up of toys Brexit from Asia pacific region,
the toy industry faced struggle to maintain their position in market. Because of this issues the UK
toy industry showed an average decline of 0.2%.After several years combining with electronic,
gaming consoles, and mobile devices has provide a big boost to the industry(Berglund and
Korsgaard 2017).
The companies of UK are very much confident to produce innovative toys which has
build the interest of children .and the industry introduced 63,400 branded new toys to the market
in 2016.And this industry creates products which helps to develop the skills and knowledge of
children .In UK the toy industries generate thirty six percent sales from online but sale from
stores have been increasing at a rate of 14% which means physical stores are still important for
the industry. the Toy retailer association normal generate maximum income within the eight
weeks before the Christmas holiday. There are about 564 enterprises who has contributed in toy
industry. And 99% of the companies which are working with toys sectors in UK are considered
SMEs and 885 of the companies are considered to be a micro enterprises which has employing
10 peoples. The toy industries of UK will rise 16.2% over the next five years. And will achieve a
string growth in electrical toys ,arts and crafts with low price and fast delivery option. This will
result to gain the most market share over the next five years.
LO 4
P 5 SWOT analysis to collate evidence to support a specific entrepreneurial idea.
Swot analysis refers to a study undertaken by an organisation to identify its internal strengths and
weakness as well as its external opportunities and threats.
Strengths: Novelty toys company has the wide range of toys and games which increase
knowledge of children under the age of 10 to 15 years. And has improved company websites
which serves as an online shopping centre .It has a strong presence in the online websites of UK
and provide high level of customer satisfaction. It manufacturer different types of toys as
compared to other which has different affordable prices. And has a strong dealer community. It
is expertise at entering new markets and this expansion has helped the novelty toys company to
build new revenue (Reuber and et.al 2018).
Weaknesses: It has lack competitive advantages against big retailers. Novelty toys company
sales amount is always depend on seasonal sales .They generate maximum sale only on

Christmas holidays. And it also has high prices of toys as compare to other companies. Novelty
toy company merged with many other company because of weak financial position and low
budget. As compare to the other organisation the Novelty toys company has a high attention rate
in work force and has to spend a lots of money compare to its competitor on training and
development.
Opportunities: The novelty toys company websites can be more improved by making it more
informative and user friendly to reach more customer. And has opportunities to expand the
business all over the world like US,china and Germany. Novelty toys company has the
opportunity to get ideas from professional inventors, freelancing designer and also including
children about describe new toys which they would like to see made. And the employees of
novelty toys company has the opportunities to work together on the entire process of developing
and marketing a toy from beginning to the end(Davidsson 2015).
Threats: The company has a threat of intense competition from other competitors of the market.
Big online retailers like Amazon is giving tough competition. And other companies are offering
toys at low price. Rise in raw material also considered as a threat for Novelty company. children
are attracted towards digital media at earlier age and mostly preferring television. Variations in
currency and fluctuation in economy creates instability to the brand operations. And children's
are also preferring online. Robbery attempts and other threats leads to property loss. compititors
has higher quality of raw materials.
P 6 External factors that effect the environment of the toy manufacturing firm.]
Political factors- Today maximum number of toys are manufactured in china. As many of the
countries safety guidelines and regulation(bio-plastic, more environmentally friendly) on toys.
This makes the country to have some control over the import of the Chinese goods in there
country. So novelty firm sales will increase as the toys will be produce in the UK only. The
domestically produced gods will be in more demand. There will be the expensive regulatory fees
in this sector. This sector will include high labour cost involvement(Datta and et.al 2017).
Economic factor- major competition will be faced by the novelty firm from the big retail
companies in the market. Due to the big firm the cost of the toys manufactured by them is low as
compared novelty firm. So the sales of the novelty firm will be affected. Seasonal cash flows of
the products will there which add the harm to the overall performance of the industry. The

market of the toy industry is the high fragmented so the novelty firm will face competition.
There trends in the toy's industry so the novelty firm has to cope up with these challenges.
Social factors- there is the faster maturity of children as they are more moving towards the
mobile and other electronic gadgets. The product life cycle is very short in this industry as the
character of the toys move with trends. Women in UK have children at there later age when they
have more money spend little more up on toys. So the sales of the firm will high as women wants
there children to be happy.
Technological factors-technology plays an important role in the development of the product in
the toy industry. The toy manufacture are more quick to accept the change in the environment.
From the hand held toys the generation have moved toward the technology based toys. So the
novelty firm can face the tough competition from the technology based toy firm(Datta and et.al
2017).
Environmental issues- for the safety of the children many groups are forcing the firm to become
more eco friendly. The firm are suggested-to use the eco friendly products in manufacture will
increase the sale of the novelty firm.
Legal issues-some of the legal issue are used to be faced by the toy industry firm due to some
data protection laws and legal procedure for the patents, copyrights, and other IPR rights.
Porters five model-
It is the holistic strategy framework that helps in taking strategic decision by analysing the
present competition. The porters 5 force model analyse on the basis of 5 determinants-
 threat of new entrants
 bargaining power of suppliers
 Bargaining power of suppliers.
 threat of substitute products
 rivalry among existing product(Davidsson P 2017).
So now we will discus what impact is there on the novelty firm-
Threat of new entrants- as this industry have the higher impact of the technology the demand of
the customer will increasingly shift toward the advance products. So for the SME like novelty
there is high threat of the new entrants.

Bargaining power of suppliers- companies of buy raw material from the various suppliers so
there is the pressure on the company to maintain the healthy relationship with there suppliers so
that they cannot eat there margins. So the novelty have the high threat from the suppliers.
Bargaining power of buyers- buyers are many times very demanding with firm. They ant the best
quality of product at the minimum cost possible. The bargaining power of the buyers are high in
the SME firm novelty. Higher the power of the customer, higher will be the ability to seek for
discount are offers.
Threat of substitute products- when a new product meets a similar customer needs in some
different ways, the profitability of the form get affected. As fast as there is the change in the
technology there is the fast shift towards the electronic gadgets from the traditional toys. So the
threat is high for the novelty firm for the survival in the market.(Lima and et.al 2015).
Rivalry among the existing products- if the rivalry firm among the existing competitors is intense
then it will knock down the prices to decrease the overall profitability. For the SME firm like
novelty it is very difficult to survive within the competitors as they produce in large quantities
and the rate would b cheap. So the rivalry from the competitors will be high.
Conclusion
From the above study concluded various sources which has helped the Novelty toys company to
established their business .And has discussed the various strengths ,weakness,opportunities and
threats for Novelty toys company. This report has illustrated the market potential of UK toys
industries. And also identified gaps which creating barriers for the establishment of business and
applied different techniques to fill the gap. This summary has also included various factor which
has affected the environment of company such as technological,economical,political and
social .Report has done a marketing research to expand the business and find various sources to
earn maximum revenue.

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