Chapter 8 - Strategic Planning

Case 8.2: HASBRO INTERACTIVE

GROUP 8:
Amellia Samantha / 008201500036
Christiana Tjitradinata / 008201500108
Stephanie Angelica / 008201500095

Auditing - 2015
 SUMMARY

Hasbro created Hasbro Interactive, a new business unit chartered to develop video games for PCs and
other gaming systems based on Hasbro's many toy and game brands.

1923 1968 1995 1997 1998 - 1999 2000

Hasbro Inc. In 1968, the Hasbro Hasbro Hasbro Suffer &

(Hasbro) was company Interactive Interactive Interactive’s Hasbro sold
founded in 1923 went public. created. growth. failure begin. Hasbro
in Pawtucket, Interactive to
Rhode Island by French
Henry Company.
Hassenfeld
www.hasbro.com
 QUESTION 1

Describe Hasbro Interactive evolution

• Hasbro Interactive is a business unit initially to address market
conditions faced by Hasbro as Toy Company at that time. Originally,
Hasbro only produce action figures from all Hasbro’s top cartoon
characters, some of the created by Hasbro, and some through
license purchase from well-known filmmakers’ studio. During that
time, the market is demanding quite stiff conditions for Hasbro to
compete; and here Hasbro ‘sniffed’ the opportunity of growing in
the field of In Interactive game, which is very tempting.
• As a result, Hasbro Interactive was built as a subsidiary of Hasbro,
which focuses on the development of video games and interactive
gaming in market of Personal Computer, which has given the
company such a promising respond for further development
initiative.
 QUESTION 1

In order to become part However, from this

of the first mover case, Hasbro were less
advantage in cautious in the regard
Interactive Gaming,
Hasbro had to do
of capital investment
mainly for their RnD
The
several things at its
strategic planning;
Department. Talking
about Investment in
strategy of
including strengthening
its RnD Department
capital, there are two
things that must be
Hasbro
(Research and
Development). This is
considered as stated in
the theory, carefully:
Interactive
Hasbro Interactive • Net Present Value of
main strategy. As a the project
result, Hasbro’s RnD
• The Internal Rate of
were remarkable and
Return of cash
strategized in the
inflows and outflows.
beginning.
 QUESTION 1

How does the strategy of Hasbro Interactive differ from the strategy of the
traditional toys/games businesses of Hasbro?

• Hasbro Interactive strategy differ from the strategy of the traditional toys/games
businesses of Hasbro by the structure of the division that was totally decentralized
at the beginning to encourage the innovation sprit for this division as a key success
factor in very dynamic and innovative market.
They follow deferent strategy to achieve this goal:
• Acquisition with other interactive companies
• Agreement with outsider and promising vendors
• Creating their own product from the scratch/restructuring
• Internal and external licensing deals
 QUESTION 2

Are the organization and control of Hasbro Interactive consistent with the
strategy? How does the planning and budgeting system support or hinder
the growth of Hasbro Interactive?

Hasbro did many acquisitions through Hasbro Interactive once it saw the opportunities.
However, the acts weren’t followed by a well preparation.

The multi-business unit structure placed new and unfamiliar demands on senior leaders, who
generally agreed that strategic planning, budgeting, and business performance reviews were
not Hasbro’s strengths.
 QUESTION 2

• As Mr. Verrechia said : “I think the way we went about it was emotional rather than
strategic. I do not think we really sat down and tried to put together a plan. Tom
(Dusenberry) promoted it, and he got the support that he needed.”
• Hasbro Interactive was created as a separate and independent division.
• Hasbro Interactive followed Hasbro’s annual planning and review cycle without significant
interaction with other divisions
• Through 1998, to spur organic growth, the company became more aggressive in setting
revenue targets for each division.
 QUESTION 2

In conclusion, the strategic planning and the budgeting weren’t well prepared.
Hasbro should’ve followed the following strategic planning process:
1. Reviewing and updating the strategic plan from last year
2. Deciding on assumptions and guidelines (Management meetings)
3. First iteration of the new strategic plan
4. Analysis
5. Second iteration of the new strategic plan
6. Final review and approval
There must be a good control and contribution of all parties to implement the strategic
planned to support the Hasbro Interactive growth.
THANKYOU