Toys R Us is a big name in kids and baby stuffs. The company deals in baby products, clothes, toys etc. It is known as one of the biggest children’s product retailer. The company was formed in United States in 1948. It also runs the portfolio of an e-commerce sites. The company is operating in multiple countries. The company is successful in making its prominent image in the industry (ToysRUs, 2020).
This article is about the Ansoff matrix of Toys R Us. This matrix is a marketing tool used by the company to identify the growth strategies in combination of products and markets. This matrix has four quadrants or four strategies: Market penetration, Market development, Product development, and diversification. Here is the detailed Ansoff matrix analysis of Toys R Us.
Market Penetration
Market penetration is the strategy suggested by the Ansoff matrix in the first quadrant. This strategy focuses on encouraging companies to increase the market share and market growth in the industry. This could be possible if the company penetrate in the market deeply with the existing products. This will help the company in increasing the consumer base, which further helps in increasing the revenue by selling more of the current products. Toys R Us has penetrated in the market with its various discounts and offers. The company offers different deals and packages on its toys and other stuffs. Toys R Us also make sure to make people aware about different uses of their toys and stuff to attract more and more consumers (Ocansey, 2019).
Product Development
Product development is the strategy suggested by Ansoff matrix, where it motivates the company to introduce new products for the current market. This is also known as product expansion, as company’s product portfolio is expanding. This could be either new product or the different version of the existing product. It might be possible that company introduce a completely new product line for the existing market. Toys R Us used this strategy as after dealing in toys, it introduced baby clothes and other products. The company was able to gain more consumers because of this and earn good revenues. It is more helpful for the people to buy different stuff from one place rather than stopping on different places for various products (Harvey, 2018).
Market Development
Market development is the strategy suggested by Ansoff matrix. This is also called as market expansion, as this strategy motivates the company to explore new markets for the current products. This growth strategy helps the company in market growth by making its presence in different markets among new consumers. This expansion could be geographical or demographical. As the Toys R Us only deals in kids and baby stuff, it expanded itself in different countries and areas. This helps them in gaining consumers across the globe. However, it can expand itself demographically. It should start focusing on children more than 7 to 8 years. They can focus on elder kids or teens too, for increasing the market growth (Ocansey, 2019).
Diversification
Diversification is the strategy suggested by Ansoff matrix in the last quadrant. This is the riskiest strategy among all the growth strategies. As this focuses on company’s operating in new market with new products in which it never dealt before. The company has to attract new customers. this requires lot of research and investment, to identify the consumer needs and which market will be beneficial for the company. If the strategy gets hit, company will be able to achieve multiple benefits from it. Toys R Us can diversify itself in baby food, fresh foods, etc to make more consumers. This is a necessary item for babies, and if the company is successful in making qualitative baby food, it will be able to grab huge market share. For example, nestle introduced Cerelac as baby food. Moreover, it can also diversify in providing baby room stuff and provide the service of setting the whole baby room with every needs and proper theme (Williams, 2018).
References
Harvey, M. 2018. Marketing strategies for Toys R Us. [Online], Available at: https://www.essay48.com/marketing-strategy/12847-Toys-R-Us-Marketing-Strategy, [Accessed on: 23rd February, 2020].
Ocansey, A. 2019. Using management tools to drive organizational performance. [Online], Available at:https://www.academia.edu/12573508/Using_Management_Tools_to_Drive_Organizational_Performance, [Accessed on: 23rd February, 2020].
Toys R Us. 2020. About us. [Online], Available at: https://www.toysrus.com/about-toysrus/about-us.html, [Accessed on: 23rd February, 2020].
William, P. 2018. Toys R Us a case analysis and case solution. [Online], Available at: https://www.case48.com/case-analysis/16360-Toys-R-Us-A, [Accessed on: 23rd February, 2020].