CASE STUDY: TINY KYKES TOYS

1. Internal Environment

Tiny Tykes Toys manufactures toys for infants and toddlers. It recently voluntarily
recalled one of its crib toys, a plush animal doll with a shiny nose. When babies chewed
on the nose, it secreted an indelible green dye into their mouths and on their faces that
lasted for several months. The dye was harmless, but the consumer lawsuits (minor)
and resulting publicity (major and sensationalized) have caused a decrease in sales of
other

Tiny Tykes toys. The company has 130 union workers and 27 management staff. It also
has a two-person public relations/marketing staff. Unrelated to the recall, but happening
around the same time, a small but vocal group of employees began agitating for
increased pay and shorter working hours.

2. Public Perception

The recall endangered the company’s reputation for quality among stockholders,
consumers, pediatricians and other interest groups. The defect has been eliminated in
new versions of the toy. The company perceives its image as fun, low tech,
inexpensive, beneficial and safe.

3. External Environment

The business environment for children’s toys is highly competitive, and it has become
more so due to increasing international rivals and the expansion into the toy market of
domestic companies once associated primarily with children’s clothing.

Tiny Tykes has several competitors, some of them nationally known companies

with huge promotional budgets. Several of these companies have products of similar
quality and cost to Tiny Tykes’; they currently enjoy a more favorable reputation
because of the recall. The overall business environment for toys is a growing and highly
competitive market. The dissident employee faction has the potential for contributing to
a wider consumer backlash against the company