Company name: Spin Master Ltd.
Headquarters: Toronto
Employees: 1000
Market: International
Industry: Children’s toys and entertainment
The Challenge: Six years ago Canadian success story Spin Master, whose toys are sold in more than 50 countries, made the decision not just to continue going global but to become a truly international company.
“It’s a necessity today. From a technological and people standpoint, the world is becoming flat and the U.S. is no longer the power and market that it was,” says Anton Rabie, the company’s co-CEO and co-founder. “If you want to build a great company today, you need to have an international focus that is an integral part of the blueprint of your organization.”
The approach: The company approached the challenge — and goal — in three fundamental steps. The first was to assess the international potential for Spin Master’s products, which includes the multi-award-winning Bakugan Battle Brawlers, a combination of action figures, board and trading card game. “You have to ask yourself what is the adaptability of your product or service from a purely cultural and behavioural standpoint. We knew that Bakugan, based on the history of other comparable products, is adaptable in 80% of the markets.” In fact, the company identified that 80% of their products were adaptable to markets across the globe.
The next critical step, says Mr. Rabie, was identifying top local people to lead their ventures in each market. “The people part is key. You cannot enter a country until you have the right people.”
Spin Master also decided to customize its approach to each market. There would be no one-size-fits all formula. “When you enter Europe, because of the European Union, you don’t enter it thinking about just one country,” says Mr. Rabie. “You enter one country knowing it is a piece of the larger puzzle and you have the end in mind. Even if you’re going to take your time over five or 10 years to expand across the continent, you always have to have that end goal in mind in your strategy.”
In Latin America, however, the approach is completely different. “Latin America is a complex kitchen sink. The best way to approach Latin America is to focus on Brazil and Mexico,” he says.
Asia also requires a country-by-country analysis and approach, at least from the perspective of the toy industry, he says. “Japan is very insular and many North American companies do not succeed there. And China is a bit of the wild west in that it’s so big, fragmented and so multi-layered and with so many factors.”
Implementation: In opening any of its international offices — which to date are in England, France, Germany, the Netherlands, Mexico, Hong Kong and China — Spin Master has prioritized finding the right local leadership.
When the company decided to open an office in France some five years ago, for example, “We hired someone who was very French and had been in the toy business for 16 years. He knew what to do, where to localize the product, when to localize it, how to build the relationships and how to win locally,” says Mr. Rabie.
So adamant was Spin Master about its focus on getting the right people that when it decided to open up an office in Germany, “we agreed that until we had a general manager in place for four months, we wouldn’t enter, even if it meant missing the opening date we’d set as the goal,” says Mr. Rabie.
On the other hand, the company opened its office in Mexico sooner than anticipated because the right person literally came to them. “We were approached by a man born in Mexico with the right experience who wanted to move his family back to Mexico and offered us the opportunity to expand there. We thought, ‘great, we can accelerate our entry into Mexico because we have the right person,’” says Mr. Rabie.
Part of Spin Master’s international strategy has been to provide very strong head office support for its international ventures. “From IT and accounting and systems and back-end, you need a team that really, really can execute world class,” says Mr. Rabie. “You can have executives who sit in the oval office and have great ideas and strategies and the right product but they’re not detailed and don’t have the team to follow them. We have been successful in the execution because we have a great team. Ian Kennedy is our COO and he’s done an outstanding job really supporting the operations.”
The payoff: “Our international business is booming,” says Mr. Rabie. “We’ve added an incremental US$100 million of invoicing per year for three years straight outside of North America. If you include Canada and international, 40% of our sales worldwide are now outside the US. Three years ago, that number was 20%. It’s not like our U.S. business has gone down, because it’s been going up over the years, with the exception of this year when it’s gotten a bit flat.”
In France, the company rocketed to the top 10 toy manufacturers in the country in less than five years. Its more recent venture into Germany is already booming. “We hired our first person on October 10, 2010,” says Mr. Rabie. “We started invoicing for the first time in January 2011 — and we’re going to do US$40 million in Germany this year.”
