Funskool India: Defend, Lead, and Counter Rivals
(8 pages of text)
In April 2017, the chief executive officer of Funskool India Limited (Funskool), was formulating a growth strategy to increase the company's annual revenues from ₹1.9 billion in 2016 to ₹5 billion by 2020. The Indian toy manufacturer had primarily catered to the local market while also exporting toys to developed markets. In 2006, the company expanded its line of products, set up an exclusive design department to develop new products, redesigned its advertising and promotional activities, and expanded into retail outlets. However, Chinese importers were upgrading and moving up the product segment ladder, where Funskool had a strong presence, and video games, which Funskool did not produce, were seeing exponential growth. How could Funskool augment the revenue obtained from the sale of its own brands? With Chinese competitors targeting consumers higher up the segment, should Funskool target customers in the lower economic levels? Should it enter the digital space to prevent a growth stall and catapult itself to the next stage in the growth cycle? The company needed to make some decisions and take steps to face these emerging challenges.
This case is suitable for use in strategy or marketing courses on industry analysis, growth, and competitive approaches at the MBA and EMBA level. Students can apply Porter's Five-Forces framework to evaluate the attractiveness of the Indian toy industry and use other analysis frameworks to understand growth strategies. The case explores a range of issues concerning the various phases of a company’s growth and its strategies to counter competition. After completion of this case, students will be able to
- analyze an industry, evaluate its attractiveness, and understand forces shaping its competitiveness;
- understand the challenges of growing in an industry that is highly fragmented and dominated by unorganized players;
- understand the different strategies that can be adopted by a company to counter the competition—both organized and unorganized competitors; and
- evaluate the pros and cons of various growth opportunities.
India, Large, 2017
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