If Hasbro and Mattel merged they would transform the toy industry. Recently the two companies have been considering merging, though the decision has not been made official. Despite the small chance that this will become reality, the possibility has led many investors to consider the outcomes. The toy industry would still have a low barrier of entry even if these to companies were to merge. So this event will not have much effect on smaller companies. However, these two major companies will no longer be competing so they will have less incentive to price their products competitively. Also, Companies looking to make licensing deals with a major toy company will only have one realistic option. If Hasbro and Mattel merge they will create a huge impact on the toy industry.
This situation could look a lot like one of Hasbro's most popular board games. If the two companies merge the will create a monopoly similar to the situation found when a player owns same color properties in Monopoly. Though they will control only about %22 percent of the toy industry worldwide, they will still hold a monopoly because they will control their specific market. Toy prices will surely rise as an effect of this monopoly. However this merge may also give smaller companies more opportunities to catch up. They may be able to make licensing deals with companies such as Disney that would be reluctant to negotiate with the Hasbro-Mattel because of inflated prices due to the monopoly. If Hasbro and Mattel do merge, their situation will strongly resemble a monopoly.
https://www.wsj.com/articles/what-a-combined-hasbro-mattel-could-mean-for-the-toy-industry-1510655405
The consideration of a possible merging between Hasbro and Mattel will bring a significant change to the toy industry because they are the main two companies in the industry. Therefore, they will no longer be competitors of each other and could cause a monopoly that will affect not only them both also the smaller toy companies in the industry.
ReplyDeleteThe possibility of a merger between Hasbro and Mattel would completely change the toy industry. Hasbro and Mattel would no longer have to compete with one another to give consumers better deals. With price increases, consumers may seek out other toy companies willing to give better deals.
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