Hasbro Australia Ltd: PESTEL, SWOT, and Brand Extension Report

This report provides a comprehensive analysis of Hasbro Australia Ltd, a toy and entertainment organization operating in Australia. The report begins with an executive summary and an introduction outlining Hasbro's mission, key goals, and core customer groups. A PESTEL analysis examines the external environment, highlighting political, economic, social-cultural, technological, environmental, and legal factors impacting the company. The competitive environment is assessed, identifying direct and indirect competitors like Lego, Mattel, and supermarkets. A SWOT analysis evaluates Hasbro's internal strengths and weaknesses, as well as external opportunities and threats, such as seasonal market trends and increased competition. The report concludes with a new brand extension product line recommendation, suggesting the inclusion of robots and computing electronics to capitalize on market opportunities. References and figures are included to support the analysis.

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BUSINESS ENVIRONMENT AND MARKETING
Name
(Affiliation Institution)

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Executive Summary
Hasbro Australia Ltd is a toy and entertainment organization distributing hobby goods, toys,
media assets, games as well as supplies. The main products offered by the company includes
Playschool, PJ masks, Marvel Peppa Pig, Power Rangers, Baby Alive, Monopoly, Star Wars,
Play-Doh, Transformers, My Little Pony, the Gathering, Magic as well as Nerf. The PESTEL
Analysis examined the external environment in which Hasbro operates. The analysis showed that
toy companies in Australia have various opportunities such as political stability, economic
growth, low-interest rates, high population growth, and attractive age distribution for toy
products, the high safeguard of copyright, trends and patents as well as access to technology. The
challenges brought out by PESTEL Analysis included high taxation, increased in inflation rates,
strict labour laws, environmental laws as well as natural disasters. SWOT analysis examined
internal issues of the company. The analysis showed that ToyMarket is seasonal and has a low
differentiation. Strong brand customer loyalty and effective distribution networks are the main
strengths. Growth of internet, joint ventures and emerging markets in Australia and internationally are
opportunities existing in the industry. High competition levels and uncertainty over the future due to the
change in microenvironmental posed a challenge to the company. The competition in the Australian toys
and entertainment industry is very high. Direct competitors of Hasbro Company include Lego, Mattel,
and Moose. Spin Master as well as MGAE. The indirect competitors include John Lewis, Online as well
as supermarkets like Walmart. The new expansion product line recommended in the report includes
robots and Computing electronics such as smartphones, Smart tablets and computers. The report
concluded that penetrating the Australian market with a differentiation strategy can help a company gain
shares easily.

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Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Mission/ key goals and core customer groups.................................................................................4
PESTELE Analysis..........................................................................................................................4
Competitive Environment................................................................................................................4
SWOT Analysis...............................................................................................................................4
New brand extension product line recommendations......................................................................4
Conclusion.......................................................................................................................................4
References........................................................................................................................................4
List of figures
Fig 1. Products offered by Hasbro Australia………………………………………………….…..………..5
Fig 2. Competitive environment of Australia……………………………………………………………...8

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Introduction
Hasbro Australia Ltd is a toy and entertainment organization operating across Australia.
The company headquarter is suited at Macquarie Park, New South Wales. Hasbro Australia Ltd
was founded in 1955 and is an unlisted public company in Australia (Hasbro Company, 2020)
The mission of Hasbro's Company in Australia is to create the world’s best play
experiences. The company fulfil its mission by delivering creative products in Australia which
satisfy the needs and demands of its customers. The company has created its corporate culture
through storytelling.
Hasbro Australia Line of business includes the wholesale distribution of hobby goods,
toys, media assets, games as well as supplies. The company’s products are separated in various
categories as a result of diverse core customer groups in their target markets. The products are
categorized in segments of Dolls & Push (customer focus group are children over 4 years),
Electronic toys and games (customer focus group are children aged 1-15 years), games (targets
children and youths aged 5 to 25 years), sports and outplay (customer focus is youths 5 to 35)
and action figures and collectibles (targets boys aged 5- 15 years). Other categories include Art
and craft (targets children over 3 years), Action battling (targets children over 6 years), creative
and pretend play (Targets children over 4 years) as well as parts and refills (Hasbro Company,
2020). The most iconic brands developed by the company includes Playschool, PJ masks, Marvel
Peppa Pig, Power Rangers, Baby Alive, Monopoly, Star Wars, Play-Doh, Transformers, My
Little Pony, the Gathering, Magic as well as Nerf (Hasbro Company, 2020)

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Fig 1: Products offered by Hasbro Australia
Image source (Hasbro Company, 2020)
PESTLE Analysis
PESTEL is a framework that is commonly used by organization planning to enter the
markets or already operating to determine the opportunity and threats that exists in the potential
markets (Srdjevic, Bajcetic & Srdjevic (2012). Through the PESTEL Analysis, an organization is
also able to analyze the external environment of the market and make effective decisions as well
as strategies for sustaining that environment. PESTEL is abbreviated from Political, Economic,
Social-cultural, Technological, Environmental as well as Legal factors.
Political factors
(include government policies that impact the industry)
Economic factors
(includes macro-economies that impacts the business)
 Political stability- The political stability of
Australia has created a conducive climate for toy
and entertainment companies to operate. Besides,
the level of government integrity is high with little
corruptions hence creating a positive and compliant
environment for doing business.
 Inflations rates- The inflation rates are high 1.82
with a trend they will reach 1.97 in 2021 (Statista,
2020). High inflation rates have led to toy and
entertainment business raising products costs. The
high prices have in turn discouraging customers
from making purchases which in turn leads to low

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 Taxation- The corporate taxation of 30% in
Australia is very high (Australia Government,
2020). With high taxation, companies have
experienced a marginalized profit in Toys and
entertainment industry with others struggling to
survive.
sales.
 Economic growth- The GDP of Australia has grown
together with the country’s economy. Currently,
Australia experienced economic growth of 2.7%
(Australia Government, 2020). The growth of the
economy has created a disposable income among the
potential toys and entertainment consumers.
 Low-interest rates- The low-interest rates of 0.75%
has created an opportunity for toy businesses to
borrow and grow their business (Trading
Economics, 2020). Furthermore, the potential
borrowed increasing their levels of disposable
income which have facilitated them to spend on
luxury items like toys and entertainment.
Social-cultural Factors
(includes demographic and cultures that affects customer
consumptions of products)
 Changing buying habits- With the growth of the
Internet, customers have changed their purchasing
habits as children (main targets of toys) are opting
to play games online.
 High Population- With a projection that the
Australia population will grow from the current 25
million to 47.6 million, the demand for toys has
increased and will likely to rise in the future
(Australia Bureau of Statistics, 2020).
 Age distribution- Children between 0-14 years
forms 19.9% of the Australian population
(Australia Bureau of Statistics, 2020). The 19.9%
segment shows that the toy markets has an effective
opportunity.
Technological Factors
(Includes new technologies in the market that impacts the
markets)
 Innovation- Australian has experienced a high rate
of innovation in the toys industry. Furthermore, the
rate of technology penetration is very high and
therefore companies tend to spend much on research
and development to ensure their products are in line
with the latest technology.

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Environmental
(natural disasters impacting markets and product
consumption)
Legal
(includes laws imposed on a particular market or products
by the legislative)
Natural calamities- The natural calamities in Australia
such as Floods and fires have had a little impact on the toy
and entertainment industry. The rise of COVID 19 has
facilitated to low sales of toys products.
Environmental Acts- Toys and entertainment industry in
Australia has been criticized by Australian environmental
Agents and activists for polluting environment. The
criticism has resulted in the government imposing strict
environmental pollutions measures to the industry. The
measure has been costly to the company as they are very
expensive to impose on the companies as well as
maintaining them.
-Labour laws- There are strict laws in Australia when it
comes to labour issues. The minimum wage bill has
facilitated to companies paying more wages and salaries to
employees leading to profit marginalization.
Copyright, patents and trademark laws- The government
is very strict on the copyrights laws. Few companies have
fallen a victim of copyright infringement. Therefore,
bombing the market with product differentiation is key in
the toy and entertainment industry
(Table: PESTEL Analysis)
Competitive Environment
The Toy industry is very competitive with both domestic and multinational companies
dominating the market. Hasbro Australia faces both direct and indirect competition in the
industry. Direct competition includes companies offering the same products as Hasbro Australia
while indirect competitors include other business offering different products from the company
although they satisfy the same need (Fritsche, Sims & Monti (2010). The direct competitors of
Hasbro that has had a significant impact include; Lego, Mattel, Spinmaster, MGAE as well as
Moose Company. Lego is the most dominant competitor in the market with a market share of
17%, Hasbro 11%, Mattel 10%, Moose 10%, Spinmaster 6%, MGAE 5% while other
competitors have a market share of 41% (Muller, 2020).
Lego Australia has had high customer loyalty with the company generating high revenues
on construction toys. Lego Company has also adopted the same strategy as Hasbro;
diversification. Currently, The Company has strongly put its focus on in-house products
creativity which has capture momentum in the market. Mattel Company is projected to increase
its market share in the market despite its failure to focus on non-Barbie Girls Business. The

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company has also offered diversified products in the market with toys being backed up by
movies which have generated high income for the company. With the consideration that Matt
does not have a strong movie release, the company is not of great threat to Hasbro. Moose has
emerged to be a great competitor to Hasbro with the company experiencing high sales from its
differentiated products that included Pikmi Pops, Grossery Gang, Treasure X as well as Shopkins
Muller, 2020). Spinmaster is also a threat in the industry with the company doing excellent with
products such as Luvabella, wide range of broad games Hatchimals as well as Paw Patrol.
Fig 2: Competition environment of Australia
Image source (Muller, 2020)
Indirect competitors of Hobson Company include supermarkets in Australia such s
Walmart and Sainsbury’s as well as John Lewis and Mothercare. Furthermore, indirect
competition from consumer electronic with handheld devices has led to high competition. The
supermarkets have impacted the industry due to their dominance in the market as well as
economies of scale leading to low prices.
The competition forces that have influenced the industry includes entrant of new entrants,
substitutes availability, high competition rivalry, as well as the high bargaining power of
customers and suppliers. The Australian is a trade free zone which has created an avenue new
entrants. Besides, the barriers of market entry are low leading to the market being flooded with

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competitors. The threat of new entrant is medium in the market with consideration the industry
is already dominated by the key players. The bargaining power of customers is very high as
customers have alternatives which have led to low prices of products offered by the company.
There are few suppliers in the market and therefore they have dictating prices for the companies.
The availability of substitutes has led to low switching costs of customers. The high competition
rivalry between the existing firms has led to low costs of products.
SWOT Analysis
Strengths
 Wide reach due to its broad spectrum of
merchandise
 Strong brand name and customer loyalty
 Efficient distribution networks and availability of
toys from different-able kids.
Weakness
 The Australian market is seasonal with 40% of toys
sales occurring in the last quarter (Muller, 2020).
 Minimal differentiation (unique offering of new
products) is experienced in the market with
companies focusing on diversification.
Threats Opportunities
 Increased competitions from supermarkets, online
as well as direct competitors.
 Change in macroenvironment such as the
introduction of new policies impacting the industry.
 Joint ventures and alliance business is growing in
Australia
 Expansion to emerging markets in Australia and
other countries like Australia
 Growth in technology fuelling online sales.
(Table 2: SWOT Analysis)
New brand extension product line recommendations
With consideration of the microenvironment, competition as well as macro-environment
factors impacting the toy industry, the expansion of products to include robots will explore the
opportunities that exist in the industry. The demand for robots has increased rapidly in the
Australian market due to the growth of technology and the internet. Therefore, expanding the
product line to include robots will increase the market segmentation. Currently, the current
market segmentation shows that Hasbro Company has a high focus on individuals particularly
children and some youths as compared to corporates. With Joint venture and alliances
opportunities as well as changing behaviour of corporates towards robots, the company can
expand its business activities using the strategies to emerging markets of China as well as

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Australia. The joint venture strategy will assist in sharing of risks that are associated with macro-
environment factors such as microeconomics as well as high context and avoidance cultures.
Expanding the product line to offer electronic such as smartphones, computers and
SMART Tablet for children will assist to address the problem of competition. Currently, the
growth of the internet has stimulated online e-sports which is driving a huge amount of interests
in Australia. The online games are played with smartphones and computers and further has been
ranked low in terms of environmental pollution. Therefore, expanding new line products to
include the electronics will make a significant impact on the industry.
Conclusion
The Australian toys and games industry is very competitive with the dominance of both
international and domestic companies. Companies penetrating in the industry must come up with
effective strategies for them to sustain competition. Differentiation of products is an appropriate
strategy for penetrating in the market with consideration of micro and macro environment factors
that has influences the industry’s profitability, decision making as well as performance.
References
Australia Government. (2020). Robust Economy. Retrieved from Australia government:
https://www.austrade.gov.au/International/Invest/Why-Australia/robust-economy

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Australia Bureau of Statistics, 2020. Population Clock. Retrieved from ABS:
https://www.abs.gov.au/ausstats/abs%40.nsf/94713ad445ff1425ca25682000192af2/1647
509ef7e25faaca2568a900154b63?OpenDocument
Fritsche, U. R., Sims, R. E., & Monti, A. (2010). Direct and indirect land‐use competition issues
for energy crops and their sustainable production–an overview. Biofuels, Bioproducts and
Biorefining, 4(6), 692-704.
Hasbro Company. (2020). about us. Retrieved from Hasbro:
https://shop.hasbro.com/en-us/product/zoops-electronic-twisting-zooming-climbing-toy-
birthday-snake-pet-toy:D532528A-EBC7-4E23-8B58-1658EC3A314B
Muller, L. (2020). The Australian Toy Market: Large, Growing and Welcoming. Retrieved from
Seeking Alpha: https://seekingalpha.com/article/4234696-australian-toy-market-large-
growing-and-welcoming
Srdjevic, Z., Bajcetic, R., & Srdjevic, B. (2012). Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a
water intake structure. Water resources management, 26(12), 3379-3393.
Statista (2020). Australia: Inflation rate from 1984 to 2024. Retrieved from Statista;
https://www.statista.com/statistics/271845/inflation-rate-in-australia/
Trading Economics. (2020).Australian Interest rates. Retrieved from Trading Economics:
https://tradingeconomics.com/australia/interest-rate

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