Assignment 3

Kaleb Thibodeaux MARK 4900 Assignment 3: Hot Wheels What are the three strategies being contemplated by HotWheels? 1. Innovate within the Physical Product (die-cast cars) - develop a special edition 50th anniversary die-cast and track series 2. All out Digital - develop digital and virtual games in-house 3. Toys-to-Life/Mixed Play - blend physical play with digital play by creating “smart cars” that people can play with in the physical world and on an app List 2 strengths and 2 weaknesses of each strategy. 1. Innovate within the Physical Product: a. Strengths: i. Leverages Hot Wheels’ strong brand recognition and customer loyalty ii. Proven track record of success in die-cast cars b. Weaknesses: i. Limited potential for revenue growth ii. Vulnerable to market saturation - Might not effectively address the issue of changing preferences of older kids moving towards digital play and it would be challenging to maintain a connection with their evolving consumer base 2. All out digital: a. Strengths: i. Potential for high revenue from digital games with no variable costs, while also unlocking monetization strategies like subscriptions, ad placements in games, and sales of virtual goods through in-app purchases ii. Opportunity to attract and retain older kids that are transitioning to digital games b. Weaknesses: i. High level of competition in the digital gaming market ii. Requires significant investment of time and money to recruit expertise 3. Toys-to-Life/Mixed Play: a. Strengths: i. Differentiates Hot Wheels from its competitors ii. Utilizes NFC chips which are low-cost and already widely being used by other gaming platforms and smartphone companies b. Weaknesses: i. Uncertainty surrounding consumer adoption and willingness to engage in mixed play ii. Requires a major shift in product development and technology integration, and a significant investment in technology and talent acquisition