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Month: October 2013

Mattel and Hasbro Cope with Changing Market Demand

The toy industry is quickly learning how to best respond to a changing market.  The main issue cited is that women are starting families later in life and having fewer children.  Further, the medium for children’s toys is changing: physical toys are being replaced with electronic versions.  The changing market occurred faster than Hasbro and Mattel could respond, resulting in Hasbro’s year-on-year operating profit down 11% and Mattel’s net income down 24%.  The Economist  points out that despite the two companies’ losses, “global sales growth for all traditional toys and games was 5% in 2012.”  This further underscores the market shift toward a technological medium.  Smartphones and tablets have directly reduced the toy industry’s market share.

M&A

Merger and Acquisitions according to this article come in waves.

The Buyers Market generally occurs when the economy experiences a downturn. In this situation, companies which possibly may have to close up shop sell out for a small profit to the buying company. Deals can be struck, and after restructuring, a strong company can emerge with new management

How Will the Fishing Industry Deal with Future Increasing Demand?

A recent article in the Economist depicts the current market structure of the fishing industry.  As the costs of production – i.e. high oil prices – increase, the sale prices increase at a parallel rate in order to maintain profit.  Another facet of the current industry’s condition is increasing demand.

Increasing demand has been perpetuated unevenly between two types of fish production: “capture” which consists of catching wild fish and “aquaculture” which is fish farming. 

A US Default and the Global Economy

Barring Congressional action, on Thursday, October 17th the United States will default on its obligations to its creditors. In spite of the promise of John Boehner and others that the Republican Party will reach a solution to the debt ceiling crisis, the inability of the Congress to even reopen the Federal Government is an ominous sign for the next four days of negotiations. As great as the ramifications will be in the United States, their potential to upset the global economy is

The Benefits of Economies of Scale

Vestas, one of the largest wind turbine manufacturing companies in the world, sold one of its most important internal operations to an outside partner. VTC Partners, a German industrial group, bought the operations of the company that were in charge of producing the giant steel poles that hold the wind turbine in the air.. Why would a company sell such important operations?

Profits from Potash

In a September article from the New York Times, the editorial board wrote about “Collusion in the Potash Market”. In this article, the editorial board explained the recent drama that has occurred between two mining cartels that provide the world’s supply of potash (an important fertilizer) to farmers. The two cartels, one composed of Canadian producers and the other