Tonka Executive Summary Essay

1016 Words 5 Pages
Gevork Sarkisyan

Executive Summary
Tonka Corporation

The name Tonka brings back many childhood memories for a vast majority of people in this class. The word has become synonymous with its signature yellow trucks. Nevertheless, Tonka is much more than the toy truck that we all grew to love. Mound Metalcraft was created in 1946 in the small town of Mound, Minnesota by Lynne E. Bake, Avery F. Crouse and Alvin F. Tesch. The first products produced by the young company were two versions of a metal tie rack, and the founders had originally planned on manufacturing garden equipment. The former occupant of their building, Streater Company, had made and patented several toys. Mr. Streater was not interested in the toy business and
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Tonka’s main competitors were Coleco, Hasbro, Mattel and Kenner Parker. In 1986, despite having the lowest sales of the four larger competitors, Tonka’s produced a net income of 22.3 million, second only to Hasbro (99.2 mill), which was the largest toy company in the United States at the time. With the exception of games, puzzles, plush toys, and infant toys, estimated 1986 sales were down by as much as 25%. The overall industry was down over 27 million as a whole, with basic and technologically enhanced toys showing the best results.

Tonka Corporation was best known for its traditional line of sturdy metal toy trucks, bulldozers, backhoes, and construction vehicles, which were responsible for approximately $70 million of sales in recent years. However, over the past several years, the company had begun to diversify into other products that would be more appealing to younger girls. One of the more successful toys for Tonka over the past years was GoBots, which were small toy vehicle that could transform into action figures. These directly competed with Hasbro’s Transformers, which generally outsold the GoBots. GoBots contributed about $132 million in sales in 1985, or about 54% of Tonka’s total sales. The following year unfortunately, only $25 million worth were sold, despite over 40 new characters being introduced. Even more successful were the Pound Puppies plush toys, which appealed to a broader age range and to

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