Strategic Management: Hornby Hobbies (Book Review Sample)

Table of content
Introduction………………………………………………………………………………P.1
1. External Environment……………………………………………………………P.1-4
1.1 Political
1.2 Economic
1.3 Social-cultural
1.4 Technological
1.5 Environmental
1.6 Legal
2. Internal Environment………………………………………………………….…P.4-7
2.1 Physical
2.2 Financial
2.3 Human
3. Business Model…………………………………………………………………….P.7
4. Competition………………………………………………………………………...P.8-9
4.1 Peco
4.2 Bachmann Industries
4.3 Heljan A/S
4.4 Competitive Position Matrix
5.  Mission and Strategic Alternatives……………………………………..P.9-11
5.1 Business Level - Differentiation Strategies
5.2 Corporate Level – Growth Strategies
6. Change management……………………………………………………….P.12-13
6.1 A leadership team
6.2 Make the formal case
6.3 Simple, standard processes across all levels of the organization
6.4 Create ownership
6.5 Communicate the progress
6.6 Prepare for the unexpected
7. Hornby Today………………………………………………………………..….P.13-14
8. Conclusion…………………………………………………………………….. …P.14
References………………………………………………………………………………P14-15
Introduction
Hornby Hobbies, is like the life of human being, has come across its up and down in the turbulent environment - the toys world.   "You will forget your original aspiration sometimes and get loss when you walk on for a long time." Hornby Hobbies had its hey-day when it was formally known as Meccano Ltd with three winning products - Meccano sets, Dinky toys and Hornby Dublo trains and had its bottom in 1995 when they were over-diversification.  It then boomed again after successful strategic changes.  It has undergone the war times, economic recessions, drastic technology advancement, and serve competitions and is still alive in the UK toys market.  The purpose of this study is to use the strategic planning tools to analyze the strategy formulation of Hornby Hobbies - external and internal environments faced, its business model, competitions, strategic alternatives chosen, implementation and monitoring.  
1 External Environment
Political
The Hornby factory was commandeered for wartime production in 1910s and 1940s - World War I and World War II.  After the World War I, the UK citizens naturally resisted to the German products.  This was the beginning of the success story of Frank Hornby - the founder of Hornby Hobbies.
In the mid-1990s, two major transformation happened in the UK railway industry.   First, the industry was privatized.  Second, the Channel Tunnel opened to rail traffic.  These gave a golden opportunities for Hornby for producing a whole new range of different sets (McReavy 2002, p. 88).
The UK is a democratic country and it is relatively politically stable.  The trade unions are well developed and has influential power to the organizations (Montgomery, 1992 p. 158).
Economic
Economic recession plus a strong pound happened in UK in 1980s.  It resulted in many businesses going into receivership or liquidation.  Another economic recession happened in 1991.
The recession that occurred in one country may not affect the economies of another countries in 1980s and the early 1990s.  However, globalization results in close correlations between countries nowadays.   Both good things as well as bad things can be spread easily and quickly among countries.
The recession of European countries have been lasted for a long time.  The debt crisis in Greece, the impact of the slowdown of China economy and the high unemployment rates in the UK as well as other European countries etc. will also affect Hornby's strategic decisions.
Social-cultural
The demographic pattern of the post-war "baby boomers" entering 40’s and 50’s with more income and time gave a favorable environment for sales growths in the beginning of 2000.
On one hand children grow older younger but on the other hand adults become less maturer nowadays.   In additions, girls/women are educated, independent and influential in the societies.   These affect the toys market drastically.  Children shift from traditional toys to music, video and computer/apps games; adults buy toys for fun, gifts and collections and arguably women than men buy toys.  Also, the buying pattern of people change.  They no longer go shopping merely on festivals and so sale competitions happen everyday.
Technological
The pace of technological change extremely fast and is accelerating. The first iphone was launched less than ten years ago but has totally changed the lifestyle of people. Information technology has serious impacts on firms and their strategies and internet is a major new technology affecting the business world. Many companies now use social networks – Facebook, Twitter, and WeiBo - to launch and advertise their products. Technology affects both the productions as well as the marketing and distribution channels.  Marketing/Sales through Internet and Apps are increasing popularity and e-commerce becomes an important route for companies to market their products. Ebay, Taobo, Amazone and Alibaba are famous websites for online shopping (BurgeSmani and Wheelwright 2004, p.1).
Hornby was tremendously hit by the growth of electronic toys and computers in 1982.  However, nowadays they have developed the personal computer software "The Virtual Railway" and the software to support Scalextric. 
Environmental
Resources are scare and people pay more attention to the environmental influences than previously.  All including toys call for green and sustainability. Carbon emission from productions is big issue for factories. They also need to address to the raw materials used and the garbage disposal etc.
Legal
Different countries have different legal requirements on products.  The UK size restrictions on toys train were tighter than other European countries and hence they had no exports in the past.  Patent rights and licensing are very important issues as well. Hornby patented the design for Meccano in order to maintain his competitive advantage. 00 gauge Hornby Dublo was made of replicas of actual engines and has to deal with the issue of licensing (McReavy 2002, p. 88).  In the UK, no license fee for an engine is required if it has been in production and use for over 25 years.  However, some agreement has to be reached with the owners of the design within the time period.  Engine name is the other licensing issue.
2. Internal Environment 
Physical
Hornby Hobbies has 240,000 square feet building on the industrial estate between Margate and Ramsgate for offices and warehouses.
Much of the building is unused as the production is moved overseas.  It is around a retail park which are growing up.  Hence, Hornby Hobbies a...