Hasbro Inc Case Study

CASE SUMMARY

Hasbro Inc. was founded as Hassanfeld Brothers by Henry Hassenfeld in Pawtucket, Rhode Island in 1923. In year 1940s the company manufactured inexpensive products which are toys. In addition, Hasbri Inc. gained their successful in Mr. Potato Head product during 1951. Another achievement that Hasbro got when the company had smash hit G.I Joe and Hasbro continue to grow and went to public in the year 1968. After that, Hasbro start to acquire other company to keep the company growth. In 1984, Hasbro acquire one game company named Milton Bradley and Tonka (include Parker Brothers) in early 1990s. Besides, Mattel was one of the strongest rivals to Hasbro Inc where Mattel’s famous product at that time was Barbie and Hasbro was G.I Joe.

        On the other hand, Hasbro Interactive was established around 1990s. Hasbro Interactive was created as separate and independent division which was wholly-owned subsidiary of Hasbro. Mr Alan Hassenfeld at that time was a Chief Executive of Hasbro Inc appointed Tom Dussenburry to write a business plan, form a team and go to market. Basically, for Hasbro Interactive, all operational decisions were made by Dussenburry including other matters such as organizational structure, production selection and partnership agreement. As it iss stated in the Dussenbury hired outside software developer as he thought that Hasbro employees did not have skills to make the business successful. Then, Hasbro Interactive succeeds to generate revenue with Hasbro’s existing product.

        However, soon after, Dussenbury began to acquire several companies including software’s company in order to achieved Hasbro Interactive revenue target which was $1 bilion. As it is stated in the case, Dussenbury have lack of knowledge in financial and operational management. Therefore, he was always concern about acquisition and investment in other companies without conducting any further research and analysis on the background and the potential of those companies to Hasbro Interactive. This decision was made by Dussenbury because of the influence by the Wall Street analysis and pressure of growth form the Hasbro upper level management. Consequently, financial management system and risk management in Hasbro Interactive were neglected which lead to lose of the division in year 1999. At the end, in 2000 before Hasbro Interactive had been sold to Infrogramers which was French company, Dussenbury already started to find other career outside of Hasbro.

        Before that, earlier 1999, Hasbro had offer online games. This is because, they believed that, traditional games were suited with online gaming concept since they were no graphics-intensive. Besides, they mentioned that online gaming can help them to generate revenue more than $1 billion based on estimation of outside market research agencies.

        In the year of 2001 to 2003, which was after Hasbro Interactive had been sold, Hasbro began to execute a strategy that focus on the core activities of the company and generation of revenue for the company. During this time, Hasbro was led by Mr Verrechia as a CEO which was a COO of the company.

IDENTIFIFCATION OF THE PROBLEM

First thing that need to be done is addressing the decision maker of this case. Alan Hassenfeld, the Chief Exutive Officer of Hasbro Inc in 1995 until 2002 as a decision maker for this case. This is because, Alan is the CEO of the parent-holding company relationship at that point of time so that he has a power to make a decision regarding his subsidiary or independent division. Then, he was involved in this case from the establishment of Hasbro Interactive till that company was sold to Infogram. He might have better understanding on the overall situation of this case. Therefore, before we can come out with the major problem happened in this Hasbro Interactive case, there are several symptoms that we are noticed. The identification of the symptoms and problem of this case was assisted by Ishikawa fishbone diagram. Refer to Appendix 1 for the summarization of the symptoms listed below.

        First, it can be seen that the Tom Dussenbury made many acquisition of the companies in order to achieve the target of $1 billion revenue within three years. This is because he has no strategic planning before making a decision or taking an action. Besides, he is also not considering the future of the company in terms of financial and the operation. In addition, as stated in the case. There is no further analysis had been done by the Tom Dussenbury in term of the potential or opportunity that the acquired company can contribute for the growth of Hasbro Interactive.

On top of that, with the absent of strategic planning on the operation of Hasbro Interactive, it can be seen from the $1 billion targeted revenue that he want to achieve within 3 years. As it is known that, this targeted profit was impossible to be achieved within that short period of time. Consequently, as mentioned above, Tom Dussenbury made an investment in acquiring many companies. In the case also mentioned that, the loft goal can change the behavior and could directly affect the decision making. It is prove in the decision made by the Tom Dussenbury.

On the other hand, growth pressure also could lead to the poor strategic planning. This is because Pressure of growth from Wall Street made Dussenbury to hire dozen of product developers, signed several agreements with outsides developers and even expended the number of game platform. If a company have strategic planning it will not be influenced by the Wall Street growth pressure since the company already have its own activity or action plan that the company will conduct to help company growth. Then, the company should not concern about the information release by the Wall Street since it is based on the assumption only which is not necessarily correct. High product return and miss the product development deadline also happen due to no strategic planning. A company should have proper planning in producing the product and developing the product so that, the product can be produced based on the schedule at the same time have a good quality of product. The planning is not only about the financial but it also includes the quality management of the product. As stated in the case, Hasbro Interactive keep producing the product even the product contribute to low profit and Hasbro Interactive was not concern about the quality of the product as long as it can produce a new product.

Second, this symptom can be seen throughout the case which is leadership failure. It can be seen that, there was nobody stop or disagree with the decision made by Dussenbury despite the decision was unrewarding spending which contribute nothing to the Hasbro Interactive Growth. Then, the other case was continuous acquisition of developer’s company by Dussenbury during his leader time in Hasbro Interactive. This situation shows that there is no responsibility of leader when the leader ignores the action took by the employee which leads to lose of confidence in other employee. Loss of confidence in employee will give bad impact to the company because the employee might leave the company or commit unethical action which they think correct and should be done in that company which consequently can affect company performance. The symptom of leadership failure not applied only to Dussenbury but also to Alan Hassenfeld. This is because, Alan Hassenfeld was the CEO of Hasbro Inc which mean he has authority to disagree or stop the action of Dussenbury however he did not do anything. This thing happen because, Alan Hassenfeld gives Dussenbury to made all the decisions including the organizational structure, product selection and partnership agreement. Consequently, there was no supervision from Alan Hassenfeld towards the operation of Hasbro Interactive which was led by Dussenbury since all the trust and responsibility pass to Dussenbury.