The Team Toy Works Company New Venture Creation Exercise It was a warm, summer day a little over a year ago that the idea first began to emerge: A small start-up toy company would introduce a new line of unique concept toys for children ages 3 to 12. Even though the toys would be inexpensive to make and sell, the young entrepreneurs wanted to provide toys that would capture the hearts and minds of the children. Most of the team had been friends in school and others had joined in as the ideas grew and took shape. It was only fitting that the company was about to launch in this winter. While the team of entrepreneurs had made progress toward conceptualizing their ideas, a number of important questions still remained to be answered. As the target date to launch grew near, they began to summarize their progress to date: Company Name: The Team Toy Works Company (TIWC) Form of organization: To be determined. Now that they were a team they still needed to decide how responsibilities would be divided among them. They were still trying to decide if they wanted to be a partnership, if they should incorporate, or perhaps form a Limited Liability Partnership (LLC) or Company (LLC). Major Product(s): Still to be determined Vision: To become the premier provider of low-price toys for 3 to 12 year olds and the young at heart. Mission: To bring joy to children through our products, and foster an innovative and supportive culture for our employees. Strategy: Focus - low cost. Primary target segment - children ages 3-12 and their parents. Operations: Decisions still need to be made about what the toy line will be and whether or not they should manufacture the toys themselves or have the toys manufactured to their specifications. How would they control quality? Also, distribution was still in question - should they sell to retailers or try to open their own retail outlet (see Marketing section). Financing: Each partner had committed to raise a certain amount of money from personal sources (savings, family, friends), but that amount still needed to be set. Also, they still needed to determine how much startup capital they needed and where they were going to get it. Financing: Each partner had committed to raise a certain amount of money from personal sources (savings, family, friends), but that amount still needed to be set. Also, they still needed to determine how much startup capital they needed and where they were going to get it. Marketing: Once they determined the product(s) they would be selling, they still needed to decide how to go about getting sales. Who would their customers be? How would the toy(s) be distributed? Should they develop an Internet site to help promote and sell the toy(s)? Should they open their own retail store? Should they consider selling outside the United States? The Team Toy Works team called a meeting for Monday morning. Each member has been asked to provide brief answers to the following questions before the meeting to discuss how the venture would proceed at this point. Imagine you are a partner in The Team Toy Works Company venture. Please think about the following issues and make some notes for discussion. 1) What business should TTWC be in? Should TTWC be a toy designer, manufacturer, wholesaler, retailer or some combination of the above? Be prepared to support your choice(s). 2) How will TTWC be financed? Identify sources of capital that might be available to your team. Which are most likely to provide funding? How much money do you estimate TTWC will need to launch? 3) How should TTWC sell its product(s)? List one or two initial product ideas? How should TTWC go about selling these items? What forms of advertising should be considered? Should TTWC develop a web site? Should TTWC sell globally? 4) What other issues might TTWC be faced with now and in the future? "The Team Toy Works Company" Ó Dr. Charles H. Matthews " toycase5.doc "