The various aspects of the market place and how they relate to W4K’s business have been discussed up to this point.  Now W4K will be compared with its close competitors in the market place.  The following table (Competition) will provide a synopsis of the competitive environment.

Wood Sellers for Less

The most formidable competitor that W4K faces is Wood Sellers for Less.  Wood Sellers for Less is a mid-sized wholesaler that, like W4K, markets custom-crafted small wood products.  The firm’s product line is more extensive than W4K, and includes children’s toys, household products, decorative shelving and jewelry.  Wood Sellers for Less produces several toy lines that compete head-to-head with W4K, including block sets and puzzles.  This competitor is larger than W4K and currently has a higher profile in the discount store/super chain arena, due to their low prices.  However, Wood Sellers for Less toys are made from a low quality of wood, and therefore do not have the durability or solid quality for which W4K toys are known.  In addition, Wood Sellers for Less toys do not have the unique, European styling of W4K products.  Another weakness of this company is that they have a diffused focus due to the breadth of their product offering.  This diffusion prevents them from effectively dominating any single product category.
While this competitor represents the biggest obstacle to winning new retail distributors, W4K believes that they are not a major threat.  With aggressive marketing and sales, W4K should be able to successfully compete for shelf space against Wood Sellers for Less, and perhaps even capture some market share away from them.  In the event that Wood Sellers for Less does prove to be a serious threat to W4K in the discount retailer/superstore channel, W4K has developed contingency plans (see the Description of Risks and Contingency Plans sections).

WoodenHead

This competitor’s primary business involves beautifully designed and crafted wood toys, including products similar to W4K as well as dolls, hand-painted letters, doll-house items, and miniatures.  The major distribution outlets used are boutique retailers and an upscale mail-order house.  This firm’s offering is more expensive, boutique-oriented, and well-known for quality and detailed craftsmanship.  The market space occupied by this competitor is clearly the high-end sector of the market.  While WoodenHead’s products are actually hand-painted versus W4K’s products, which are custom-crafted (i.e. a combination of machine work and finishing touches done by hand), most customers do not distinguish between these characteristics.  W4K toys represent a product that has the look and feel of a hand-made, European original, but the value and price of a mass-produced product.  The WoodenHead toys are typically the premier choice among collectors and designer-label shoppers, but for parents and educators seeking value, they are out of the reasonable price range.  When W4K was more heavily-focused on the boutique market, this competitor represented somewhat of a threat.  However, due to the nature of this company, they are not a major player in the new target market of discount retailers/superstores. 

EducaToys

EducaToys is a national wholesaler that markets a broad toy line based on a variety of materials, including plastics, metal, and wood.  EducaToys is a major player in both the toy store and the discount retailer/superstore channels.  This company is W4K’s most significant competitor among a whole segment of companies that provide educational-oriented products in all types of materials for toddlers through elementary-aged children.  EducaToys has a significant percent of marketshare in the toy industry (18%) and is well-positioned with most of the major retailers.  Even though EducaToys represents a challenging competitor, W4K believes it can effectively compete with the larger company in the wood toy market.  In the wood toy market, EducaToys’ marketshare (8%) is less than W4K’s (10%).  Comparable EducaToys and W4K products have similar price points, but W4K toys have a stylized, custom-made appeal that EducaToys’ mass-produced products lack.  In competing with EducaToys, W4K can capitalize on its home-grown history and specialized product line to attract customers who are looking for a value product with upscale, boutique-like appeal.

Toy Chests, Etc.

Toy Chests, Etc. is a regional chain that manufactures and sells wood furniture as well as
a limited offering of smaller wood items.  The firm’s primary product line includes various types of furniture, including children’s furniture such as toy chests, toddler beds and rocking chairs.  Secondary product lines include some kitchen utensils and a limited amount of children’s toys that are similar to W4K’s products.  In general Toy Chests, Etc. products are known for competitive pricing and strong quality.  However, their children’s toys are more expensive than W4K’s since they do not produce a large quantity of these products, and they do not have the exquisite detail of W4K toys.  Toy Chests, Etc.’s major weakness is their limited distribution channels.  Currently the firm sells its products only through ten large warehouses scattered throughout the Midwest region along with a few retail furniture stores.  Their children’s toys can only be obtained directly from one of the company’s warehouse or through phone orders.  The company, like W4K, has grown out of a family business and is still operated by family members.  The company’s growth has been strong but not well-planned, and the company executives have not done a good job of expanding marketing activities along with the company’s growth.  Most of Toy Chests, Etc. customers are either repeat customers, word-of-mouth customers, or drop-in visitors who happen to be driving by one of the warehouses.  Because of their limited marketing capabilities and their lack of distribution channels, this firm does not represent a serious threat to W4K’s targeted markets at this time.