Fisher-Price's competitive advantage derives from a number of factors(the "fun value" of its toys, their sturdiness, its play lab testing concept, the company's differentiation and positioning, and its market segment. Fisher-Price ensures that children find its toys sturdy and fun to play with by testing them in its play lab: the "Smart Toy Lab" designed jointly by Mattel and Intel ("History of the Smart Toy Lab and Intel® Play Toys," 2001, p. 1). The Smart Toy Lab enables Fisher-Price to test its toys and those of its competitors, and the lab has "matured into a fully staffed business unit" whose combined efforts "have produced coordinated sales, marketing and merchandising efforts to broaden awareness of the Intel Play products" ("History of the Smart Toy Lab and Intel® Play Toys," 2001, p. 6). According to Falcioni (2002, p. 4), "By watching how youngsters play, designers get a kid's eye view of whether what they've come up with appeals to the younger set...If a preschooler pushes the toy away, it's a sure sign that it needs to go back to the drawing board." No other toy company has this high-tech play lab. Fisher-Price's innovation, with user input into the designs; safety; and licensed characters are also key components of the company's competitive advantage, particularly where they are difficult or impossible for competitors to duplicate.
Fisher-Price's differentiation and positioning are critical to the maintenance of the company's sustainable competitive advantage, which stems in part from customer familiarity, with 100% of parents familiar with the brand. The other vital component of its competitive advantage is the trust accorded by parents to the Fisher-Price brand due to its reputation for safety and durability. In addition, the parent segment is an important factor in Fisher-Price's success, since today's parents are highly educated about the products they purchase for their children, and produ...