Lori Harpoolian (John's sister) had the steely blue eyes that seemed to be a prerequisite for high priced corporate attorneys. Those eyes would bore into the soul of her managerial victims, forcing them to confess the most intimate secrets of their organization's shortcomings. Lori's victim, today, was Brad Diemer, President and Chief Executive Officer of Haney and Janney Toys, Inc. (HJT). HJT was a leader in the development and marketing of interactive dollsdolls that cry, wet their pants, walk, talk, and so forth. HJT had recently been sued by a disgruntled stockholder, Kim Gregory, who was convinced that Brad Diemer's management team was not extracting the maximum level of profit out of Haney and Janney's toy operations.

What irked Ms. Gregory the most is that HJT's profits had been declining as more competitors entered HJT's once profitable business. The profits of its chief rivals in the industry had also been declining, even though one of the competitor's newest dolls could drool. Moreover, none of the competitors in the interactive toy industry could raise its prices without losing customers. At the same time when one of HJT's competitors would lower its prices, it would result in lower profit margins for HJT. Even though, HJT's once profitable doll business seemed to be declining, it had accumulated substantial cash reserves, which Ms. Gregory feared would be paid out in perquisites, bonuses or stock options to Mr. Diemer's management team if she could not have him removed as CEO.

Ms. Harpoolian's job was to evaluate Haney and Janney's strategies for generating the maximum level of profits for its stockholders, and assess how effectively it had been implementing its plans.

Ms. Harpoolian began the questioning, "Mr. Diemer, let me start by asking you a few simple questions. First, what is your firm's mission?" Mr. Diemer felt a surge of confidence well up in his chest, as he answered "Our mission is to provide the highest quality interactive dolls to our customers, while still earning a profit and keeping our employees and suppliers satisfied." "Oh, that's nice," replied Ms. Harpoolian, "I assume that you have this mission written down in a form mission statement?" Mr. Diemer was crestfallen. Haney and Janney had no written mission statement. "Oh," chortled Ms. Harpoolian, as she jotted herself some notes. Ms. Harpoolian continued, "Well, Mr. Diemer, how do you try to implement this unwritten mission?" "Well, Diemer replied, again with renewed confidence, "Our goal is to keep close to our customers, to understand and even anticipate their needs in interactive dolls. We have a staff of fifteen child psychologists that work with numerous boys and girls to develop the kinds of dolls they might like. Our goal is constant innovation. We try to bring out two or three new dolls a month, and then use our marketing system to create demand. We spend a great deal of money on advertising, and while managing our costs is important, we tend to charge pretty high prices for our dolls and gain good margins." "Hum," noted Ms. Harpoolian, thinking to herself that HJT had not earned a profit for three and half years, "and I assume that all of these ideas and plans are detailed in a formal written strategic plan?" "No Ms. Harpoolian," replied Mr. Diemer, "we have none of those." "Well, exclaimed Ms. Harpoolian, "how can I possibly give your firm a positive evaluation if you don't have a strategic planning process in place?"

Does Haney and Janney Toys have a strategy? Which of the generic strategies discussed in class, if any, is Haney and Janney implementing?

		No, nothing is written down
		Yes, low cost leadership
		No, nothing is working
		Yes, product differentiation
		Yes, it has great marketing

Question 2

If HJT has a strategy, is it working? What supporting evidence for your position can you provide?

		It does not have a strategy so it cannot work.
		Yes, it is working based on its new dolls.
		No, it is not working because it has been losing money.
		It is too soon to know if it is working.
		It seems to be working but I am not sure why.

Question 3

What kind of generic strategy is being pursued by at least one of HJT's competitors?

		Low price
		Product differentiation
		Focus
		Imitation impeding
		Opportunistic

Question 4

Where is the interactive doll business in the industry life cycle? Choose all that could apply.

		Introductory
		Emergent
		Mature
		Decline
		Doomsday

Question 5

Should HJT remain in the interactive doll industry? Why or why not? Choose all that could apply.

		Yes, if you assume it can out-innovate its competitors.
		Yes, if you harvest it
		No, if you assume perfect competition
		No, if you assume adverse demographicsdeclining birth rate
		No, if you assume fierce competition from China.

Question 6

What level of earnings has HJT been generating?

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		NPi
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