HR Learning Center

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Driving Business Results

Talent Outcomes

Certified HR Analytics
Instructions
1. Identify the Strategic Style for your assigned case study – Toy Galaxy, Enchanted Forest or
Gigot’s Gadget.
2. You have been given a list of possible talent outcomes for an organization (Table 1). Based
on the business focus mentioned for your respective case study, work individually to identify
3-5 relevant talent outcomes for the HR function alignment with the business strategy, across
the 4 areas of HR (Table 2)

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Case Studies
Case Study A - Toy Galaxy
Introduction
Andy was a contented man. He just completed his final review of Toy Galaxy’s annual report. The
board would be satisfied with the performance of the firm in the last financial year. In fact, the past 5
years had been an exciting journey when the company had seen more ups than downs. Today, Toy
Galaxy (Headquartered in Dreamland) is the largest toy store in the world – a one stop shop for toys
and a dream come true for kids. At the end of the year, Toy Galaxy owned and operated more than
2,000 stores worldwide – most of them in the western hemisphere.

Challenges Facing Toy Galaxy

Growth brought about its own complexities and managing these new challenges was the secret of
success for Toy Galaxy. Although revenue had more or less stagnated of late at around USD 11
billion (an industry wide phenomenon that was attributed to the PC and cable TV), net earnings
continued to rise. In the previous year, Toy Galaxy successfully reduced its operating expenses by
10% - which resulted in savings of more than 320 million dollars.

Although Toy Galaxy was the first toy supermarket in the world, competition had almost caught up
with it. The toy retail industry was very fragmented. Toy Galaxy, in spite of being the market leader,
had a market share of only 20%. The nearest competitor Wal-Mart has a share of 15%. Further Wal-
Mart has access to greater financial resources.

Toy Galaxy Business Strategy

Toy Galaxy differentiates itself in terms of variety (in fact, in their marketing campaigns, they pride
themselves on having every toy that exists on earth). The logistics that have to be maintained to keep
this claim true across approximately 2,000 stores can only be imagined. In addition to this variety,
Toy Galaxy also maintains the lowest cost across all competitors for all products. This means that
they have to strike a hard bargain with their suppliers – the toy manufacturer which is easier said than
done. Manufacturers themselves are facing margin squeeze due to the competitive landscape.

Yet another challenge facing the toy retail industry is the ‘time to market’ of toys. One has to
remember that the end consumers of the products are children who would like to have the latest toys.
Toys have a very limited shelf life. Moreover, sales see a spike during the holiday season.

From the point of view of the customer who visits any Toy Galaxy outlet – be it in Mumbai or
Melbourne, the experience provided by Toy Galaxy must be the same. To fulfill this customer
expectation, uniformity has to be maintained from the look and feel of the store to the greeting of any
customer.

To maintain a strong bottom line, Toy Galaxy has had to continuously launch new initiatives that
impact day–to–day activities aimed at cutting cost. For example, recently Toy Galaxy implemented
software to track point of sale purchases and itemize them by category and time of purchase. This
helps store managers to staff the right people at the right department /product counter.

Supply Chain at Toy Galaxy

Toy Galaxy maintains an extremely efficient supply chain. The goal is to turnover inventory as quickly
as possible, while negotiating the best deals with suppliers. All this must be accomplished while
ensuring that a wide variety of toys are always available in each toy store.

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Information technology plays a significant role here. Be it product visibility, better warehouse
management systems or new logarithms for forecasting, everything is related and this is maintained
by the IT infrastructure. Everybody therefore has to use the same accounting and software systems.

Transition from physical to online stores

This IT backbone enabled Toy Galaxy to launch its online store 10 years back. This fulfilled the
buying, selling and shipping of toys in the cyber world. Yet, to their dismay, Toy Galaxy realized that
the expertise required to successfully run an online business was quite different from that of an in-
store business. The in-store sales and the effective way they had of buying, selling, serving their
customer continued to be their core strength. Hence, Toy Galaxy is looking to align people strategies
that will help them succeed in the foray of online stores.

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Case Study B – Gigot’s Gadgets
Introduction
Stanley greeted the three other people sitting in the room. “Good morning everybody. Welcome to the
first meeting of the ‘Fast Forward to the Future’ team. The agenda for this team is twofold – to take
stock of the present and to suggest options to explore for the future. I would take this opportunity to
introduce Sam. Sam is an external consultant who will help us with our objectives. Sam, let me
introduce the other members of the team. Cecil is our marketing head. Since he plays the flute, he is
also called ‘Cecil, the Whistle’. This is ‘Mabel, the Rebel’, who looks after design and who is a
practicing painter. Of course you know me -- I am Stanley, the CEO. Sam, the floor is all yours”.

Sam, began “First of all, I want to familiarize myself with your company. Of course, I have done my
research, but I would be grateful if one of you can take me through your growth story.”

Business Model
“Well Sam”, said Stanley, “Gigot’s Gadgets is a fairly young firm – ten years old to be precise. We
specialize in selling state of the art technology products for girls. It was named after the character in
the French movie ‘Gigot’. When it was registered, its official address was my residential address. We
have come a long way. Presently, we are a multi-billion dollar company which is vertically integrated
from product design to customer sale. Our latest catalogue features the following gadgets – a
Valentine’s Day pink colored sonic boom heart shaped alarm clock, fun jewelry that is also fully
functioning USB ports, and even bi-lingual dolls which get girls started early on a second language.
Our newest innovation is a makeup kit where girls learn about chemistry by mixing their own
cosmetics. We make our sales through the internet, kiosks set up at strategic locations like airports
and our own shops that we operate in select cities.”

“That brings me to my next question.” said Sam. “Why do you use such a business model? Why
don’t you sell it to wholesalers and retailers? I am sure that you could gain wider geographical reach.”
“We don’t believe that middlemen add any value for us.” Stanley responded, “Our customers are a
select group of discerning buyers who want the latest in technology. They don’t mind going a bit out
of their way to buy the latest gadgets for their girls. In fact, our research shows that having our goods
only available at our limited shops and through the internet helps us to command a premium for our
product. Our customers don’t want the same toy as every other kid on the block. They are willing to
pay a premium to be one of the few kids with the new gadget.”

Product Development
“Tell me a bit about how you come up with your ideas,” asked Sam, “Do you do a lot of customer
research?”

“Well we certainly care about our customers. However, that doesn’t mean that they drive our design
process,” continued Mabel, “At Gigot’s gadgets, we just don’t react to needs, we anticipate them. It is
like Henry Ford said, ‘If we asked people what they wanted, they would have said a faster horse.’”
“Mabel’s team is amazing. They are constantly introducing products that are so new, that our
customers didn’t even realize that they wanted them.” added Cecil, giving Mabel a wink.

“Probably, this explains why you do not choose to outsource your manufacturing to low cost
locations.” said Sam.

“Precisely, cost is not on the top of our mind. Further, to maintain quick inventory turnover, we must
minimize shipping time. We cater to a clientele that sees value in our products and is willing to pay a
premium.” explained Mabel.

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“If I may add,” It was Cecil. “We do not play on volumes. For us, bigger isn’t always better. In fact, we
can never be sure about the success of a new gadget until it hits the market – hence, we usually ship
small lots to our outlets. Even if we don’t sell a single piece of a new product, we minimize our losses.

This also gives a sense of scarcity and heightens the excitement in the market. And bucking the
trend, we always maintain overcapacity in manufacturing. We are not unduly worried about
underutilizing our manufacturing facility. If a product becomes a rage, we can manufacture quickly to
easily recover our investments.”

Marketing
“Can someone tell me something about your marketing efforts?” asked Sam.

“I was wondering when you would ask.” said Cecil with a smile. “Marketing is critical to our business
strategy. Since most of our gadgets fall into the category what-we-think-people-need rather than
what-people-need, marketing is more than an exercise in communication. Moreover, it does not
usually make sense to run a marketing campaign for a particular product. A better alternative is to
promote Gigot’s Gadgets as a place where innovation thrives. You might recall the advertisement
campaign that we currently run is ‘You will find something new every day at GGs’. And mind you,
these are by no means empty words – you really will find something new.”

“Cecil, you mentioned the internet. How important is information technology?” probed Sam.

“Oh, very important” said Stanley. “We maintain an open line of communication throughout the
organization. We have a very active online community of interest running called the gg4g – Gigot’s
gadgets for girls. In addition to being a vehicle to socially network, it also provides interesting
business insights. It reveals how girls are currently thinking and whether the latest fads would
become a trend. It is also a window where we can test run our products and get immediate
feedback.”

Competition
“Who do you think are your main competitors today?” asked Sam.

Stanley smiled, “You know Sam, we have asked ourselves the same question – but are unable to
come with a definitive answer. Think of it, how would you categorize a USB mass storage device in
the shape of a heart that can be worn around the neck? Is it is a technology product or jewellery?”

Building a sustainable business model

Gigot’s Gadgets needs to have a more expansive business model so that they cater to a larger
audience, can have better insight into their product strategy and have a sustainable model to justify
economies of scale. Will Sam be able to help them?

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Case Study C – The Enchanted Forest
Management Team
Ross – CEO
Reubin – CFO
Susan – Marketing
Mary – Operations

History of The Enchanted Forest

Prior to founding The Enchanted Forest, Ross spent over a decade in the fine dining restaurant
business. When he became the father of twins, he had identified a potential gap that wasn’t being
serviced by the major toy manufacturers and retailers of the day. Invariably, almost all of them had a
well-funded research and design department that decided what toys would sell in the market. The
manufacturing division then just churned them out in large numbers – billions and billions of uniform
toys. Ross liked to call them McToys.

Ross realized that just like the clients who visited his fine dining restaurants, most children are unique
and this translates to unique interests and demands. There was nobody catering to families who
wanted a toy to be unique and special. Seeing an opening here, he set off on his own and launched
the Enchanted Forest. It is essentially, the fine dining of toy stores.

Ross outlined his vision for the Enchanted Forest in these words – “I basically want Enchanted Forest
to be the place where children can come, design and create their own stuffed toys/dolls”. On the
basis of the initial market research carried out, he foresaw that most of the customized dolls would be
duplicates of family members (e.g. size, shape, hairstyle, and even clothing). He also anticipated that
there would be very high repeat business (varying from once a week to once a month). Market
research also revealed that most of the repeat business would be in the form of modifying the already
customized toy – for example, creating a new dress or hair style.

Unique and Enchanted Experience

From the very beginning, the team was clear that the whole concept of The Enchanted Forest would
be centered on both parents and children. This is not such an easy task given that most of the
customers are children who might not be able to articulate their need. For Enchanted Forest, the
customer is prince/princess; hence CRM (Customer Relationship Management) is of utmost
importance.

Every possible customer touch point, however remote, has to be managed. The store design was
critical in this aspect. The name Enchanted Forest was decided after Mary wondered, “Why don’t we
design the store such that it is laid out like a magical forest?” Going with the theme, the sales
representatives were to be fitted with wizard costumes. The idea was that the sales representatives
would be able fulfil the wishes and dreams of the children – however hard it might seem.

Design & Development

The employees are skilled in understanding the requirements of the customer and translating it into
designs. They are all able to produce enchanted dolls using plastics / moulds / fabric and other raw
materials. Simple manufacturing processes are in place which allows the Wizards to produce the
actual dolls in each Enchanted Forest store.

Every employee of The Enchanted Forest goes through a training program called Granting Wishes.
During this training, the Wizards learn how to use their eyes and ears to understand the family’s

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unique desires and how to create that very special toy. The Wizard stays with the family through each
stage of the experience, usually helping them load their valuable cargo into their transportation home.
As a result of this special experience, over 80% of clients return. This could be for a small purchase
(e.g. new clothing or longer hair) or to purchase a new enchanted doll. It was not uncommon for a
child to want a new puppy for their original enchanted dog or a ‘sister’ for an existing enchanted baby
doll. This repeat business is fundamental to the success of The Enchanted Forest.

Personalized Service
From the technology perspective, being sensitive to customer touch points means that there should
be lesser dependence on Interactive Voice Response System and greater reliance on customer
service representatives when any child dials the toll-free number.

Every customer is paired with a Wizard who would interact with the customer whenever he/she visits
The Enchanted Forest. Having the same person cater to the needs of a particular customer gives The
Enchanted Forest the chance to deeply understand the customer and build a long-lasting relationship
with the customer.

Expansion to Europe
Enchanted forest is now looking to expand to more geographies, starting from Europe. It is very
important for them to they maintain their customer-centric culture, and would like to ensure that this
remains their differentiation factor irrespective of growth and expansion.

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Questions
Part 1: Identify the strategic style (operational excellence, product leadership, or customer intimacy)
of your case organization
Strategic Style: