A Seven-S Analysis of the Four Horsemen Toy Design Company

The Four Horsemen Toy Design Studios is a toy company based in New Jersey that creates highly detailed action figures for Mattel while making its own toys that are sold online to adult collectors.

Therein lies the problem. The Four Horsemen's overall strategy - the direction they wish to take to gain a competitive advantage in their industry - is to utilize the strengths of their staff and design their own toys, selling them independently. The company's core competencies lie within their ability to create very well designed toys and sell them at a reasonable price while still garnering excellent margins. The company has always been very capable at accomplishing their design strategies, but when the Four Horseman Toy Co. started out, they were struggling to gain brand awareness, and were not selling any toys.

Early on, as a struggling toy design start-up, Four Horseman Co. made a critical decision that both gained the company brand awareness, and at the same time misaligned two of their S's, Strategy and Structure. The company was offered a contract by Mattel that would employ them to design Mattel's toys according to Mattel's specifications. They would be well paid, and the bills would be covered. Work was suddenly plentiful, and the whole company was employed in the designs and creation of Mattel's toys.

Strategy: When possible, Four Horseman would design their own toys and offer them for sale to collectors and online. Their independent designs sold out a year and a half before they were even finished. The Four Horseman, thanks to their work with Mattel, had better brand awareness and were able to easily sell their own designs. They had finally become capable of completing their core strategy: to utilize the strengths of their staff and design their own toys, selling them independently. Although they were finally able to capitalize on their strategy, they were not doing it.

Structure: The Mattel contract had in fact changed everything. The organization of Four Horseman was structured to complete the contract with Mattel. The employees, work load distribution, and overall business was structured around their $500,000 contract to make Mattel's toy designs. Even though Four Horseman was finally gaining profits and popularity from their designs, the company was structured to handle the Mattel contract, not their own designs.

Until the company structure or company strategy changes, the misalignment will continue to create stress within the company. I think that if there exists a high demand for their own designs, then the company should take the leap of faith and discontinue their contract with Mattel to pursue the original core competency and strategy of the company. Four Horseman should realign their structure with their strategy.

Verizon + Redbox

February 6, 2012: Recently, there's been a large shift in the entertainment industry, specifically in DVDs. Not long ago, Blockbuster and Hollywood Video reigned supreme as the superpowers of the industry, but a paradigm shift brought in by Redbox made DVD's more available to all. Based on Porter's Activity Based Advantages, Redbox introduced themselves as a the low-cost comparative advantage with a broad scope of reach.


Redbox experienced extreme success very quickly. This was mostly due to their very easily accessible kiosks that operated with lower overhead than having a full staff and a building to supply DVD rentals. The DVD's were new releases and cost only one dollar. Becoming the 'Walmart' of DVD rentals allowed Redbox to capture the majority of the market within a very short amount of time.


After reducing the competition, and creating barriers to entry by making contracts with local grocery stores, Redbox was in a great position - until online streaming sites made Redbox's threat of substitutes a very real one. Online streaming from Netflix and Hulu brought in new opportunities for customers to get their DVD's even quicker and easier than having to the grocery store. With little online presence, Redbox did not introduce any online services.


Recently, Redbox and Verizon began talking about working together. In my opinion this is an incredible idea and here is why:


Redbox is the low-cost broad-scope superpower of it's industry. Verizon is the broad-scope differentiator of it's industry with massive access to the customers that often pick Netflix and Hulu over Redbox: mobile users. Verizon and Redbox would be able to offer both online streaming with access to mobile devices and internet TVs, as well as a physical DVD rental service that makes Redbox already very successful. With Redbox's DVD services and physical kiosks in place, Verizon could differentiate itself from the competition it faces by offering actual DVDs to rent. Likewise, Redbox could offer an Online service that reaches mobile customers, their largest threat. Their activity based advantages compliment each other very well.


my advice, go for it.

Verizon Teaming With Redbox for DVD and Streaming Service By Amy Chozick. New York Times

Twitter Tweaks it's Tweets

Friday, January 28, marked a change in some of Twitter's strategies.


In an effort to continue expanding, Twitter will now begin a censorship program for tweets in certain countries. Twitter has always been proudly know for its freedom of speech propagation. Recently, however, feeling that there is more opportunities to tap larger profit pools, Twitter is going even more global.


To offer a more globalized Twitter, certain requirements are imposed by countries that restrict what people for the U.S. see as freedom of speech. Twitter explained that eventually they would have to enter "countries that have different ideas about the contours of freedom of expression." I want to know if this is Twitter changing their strategy to continually propagating freedom of speech, or of it is just modifying their definition. Or, is freedom of speech even part of their strategy?

For reference material, see the wall street journal's article titled, 'Twitter's Censors Provoke Backlash' January 28, 2012

Apple's Strategy

NyTimes, Apple Unveils App and Tools for Digital Textbooks

On Thursday January 19, 2012 Apple released their newest strategy to conquer the world one less text book at a time. In their recent education announcement in New York, Apple declared their intentions to make textbooks available on iPads for a fraction of the cost. 

This includes not just a fancy PDF of the textbook pages, but a full suit that permits textbook writing, developing, and enhancing. Teachers and writers can create interactive graphs, and searchable text for the textbooks developed through Apple. Likewise, Apple is launching a survey building software that could link into these textbooks, making it easier for teachers to create assignments, and for student to understand them. To student and teachers, this is all pretty cool stuff. In a business strategy sense, though, I think it's even cooler. Here's why:

Problem: By most estimates, Apple has not captured as much of the electronic book market with the iPad and its iBookstore as its chief rival in the business, Amazon, has with the Kindle e-reader.

Strategy: while Amazon was a much earlier entrant into the e-books business, it has been less successful in the education market. Education is where Apple has an advantage against Amazon. Apple has a deep and longstanding connection with the education market that could serve it well as it enters the textbook business. Even as its Macintosh computers were shunned by big purchasers of technology inside corporations in decades past, Apple found success selling them to K-12 schools and colleges.

Before he passed away, Steve Jobs told Walter Isaacson that he wanted to hire well-known textbook writers to create electronic versions of their books. He said that Apple could sidestep the state certification process for K-12 textbooks by making them available free for iPads.

Conclusion: Considering the "Pepsi/Coke" wars, I think it is interesting that when considering the Porter's 5 forces model, the largest factor making the softdrink industry unattractive to new entrants is the rivalry among competition - specifically among Pepsi and Coca-Cola. Pepsi and Coke entered a marketing war that has turned them literally into american icons. Virgin Cola's failure to enter the U.S. market illustrates this perfectly. Among the largest failure of Virgin Cola was the inability to topple what people have come to long consider an american icon. Virgin's marketing campaign was not clear, and buyer loyalty was already too great. I find the E-reader Vs. iPad battle to be panning out in a parallel fashion to the Pepsi/Coke war. Amazon has used its sheer brute internet immensity and customer base to sieze the digital book market, but Apple hasn't bowed out.


Apple has an interesting strategy: Continually target the education sector with innovative, remarkable, and sometimes just really cool products. Although Apple does not control the market, they have consistently made themselves iconic among younger users. Apple is working against its competitors by using its key strengths: the ability to become an icon on campus.

“Education is deep in our DNA and it has been from the very beginning,” 

Philip W. Schiller, Apple’s senior vice president of marketing

source: Apple Unveils App and Tools for Digital Textbooks. NYTimes. By Brian X Chen and Nick Wingfield | January 19, 2012