Up Close: Playmobil's Andrea Schauer
Steady Progress: Playmobil managed growth without corner cutting
By Peter Lang, Das Spielzeug magazine -- Playthings, 1/1/2008 12:01:00 AM
[Editor's note: An abbreviated version of this story appeared in the January 2008 issue of Playthings magazine.]A model of a new building set sits on Andrea Schauer’s desk—it is hinged, accessible from both sides and would be an ideal portable toy for children. It is a perfect example of how the Playmobil brand has advanced in recent years.
“Playmobil now gives greater attention to detail, and has become more complex,” states Managing Director Andrea Schauer. Today, even classical toys must be attractive and inviting for children to play with them; as a result, new play features and new themes such as dinosaurs and more electronics have entered Playmobil’s world. “We must make sure we develop along with our children,“ Schauer continues.
Children have responded by rewarding Playmobil with double-digit growth rates in the past year. Besides its strong position in Germany’s domestic market, the company can also be proud of its export business, posting growth between 5 and 35 percent. Even the challenging U.S. market shows promise: the Zirndorf-based firm’s products are now sold by Target and Toys "R" Us.
Having previously focused on items priced $20 or below, American consumers are increasingly turning their attention to Playmobil, perhaps partly in response to the most recent recall campaigns for products of inferior quality. The effect of this sharp jump in demand is that the company has struggled to meet its global orders. “Our aim is to deliver quality—as a result, we cannot open endless production capacities,” Schauer says.
Production at Playmobil’s factories in Dietenhofen, Germany, Malta and the Czech Republic can currently cope with an annual growth rate of up to 15 percent and still guarantee quality, the company believes. Unlike those who blame China for problems in the toy supply chain, Schauer does not believe that quality is linked solely to production location, taking a very balanced view of China as a producing country: “Many high-tech products are manufactured in the Far East. There is no doubt that we could achieve Playmobil quality in China as well.”
However, Chinese production would not bring about the cost advantages originally expected, she explains.“With Playmobil, the devil lies in the detail. The necessary controls would have pushed our personnel capacities beyond the limit,“ Schauer says, quoting company owner Horst Brandstätter who once said of his European workers: "If we wanted to produce in China, I would have to clone you all.”
Instead, Brandstätter chose to invest approximately 50 million euros in the firm’s European production facilities, and expanded its highly modern, mostly automatic production lines. Schauer believes that Playmobil’s business model only works so well because of the company owner’s readiness to invest. In the free capital market, she believes the funds would not have been made available.
Working its way into China
Playmobil’s constant commitment to achieving high standards also puts it in a position to sell its products in China in the future. Since the middle of 2007, all companies wanting to export products to China must meet the standards of the “3C"(China Compulsory Certification) safety and quality rating. For Playmobil, attaining the certification took four months of intense work.
Its products intended for sale in China, all of which had already been tested in Germany, had to be tested once more by Chinese laboratories. In the near future, Chinese inspectors will also examine the company’s production facilities. Playmobil does not expect any complaints—after all, the production facility in Franconia’s Dietenhofen was voted Landmark 2007 as part of the "Germany – Land of Ideas" government initiative.
As far as the Chinese market is concerned, Schauer has realistic sales expectations, believing that the main potential for growth lies in Europe. The Playmobil brand is in strong demand in China, particularly among people with a European background. The company’s main objective in China is to be represented in the major markets of Shanghai and Beijing.
Schauer strongly believes that the Playmobil consumer appreciates the high play value and versatility of products that can be combined in so many ways. “We do not go for cheap frills, but for long-term play value. And we invest a lot of time in development," Schauer states, confirming that it takes up to three years to create a completely new play world. Rashness is something the company prefers to avoid.
Although Playmobil is proud of the many awards it has received for its new developments, Schauer does not see this as an end in itself. “Our main objective is to reflect and respond to the desires of children," she says. This is something the company in Zirndorf works hard to achieve—just like the miniature workmen in Playmobil’s new building set.
