Demand and the holidays

As far as supply and demand I think a great example is the holidays more specifically Christmas. Toys R Us has announced that it will be hiring 35,000 for the holiday season. Toys R Us will also be opening 350 pop up stores in malls around the country. Toys R Us also bought FAO Schwarz earlier this year. All the preceding things lead to great positioning to lead the market for toy sales. They seem to be creating a monopoly if not control over the majority of the market by purchasing FAO Schwarz and the opening of the “pop up” stores in malls.

I think the main idea behind all of this is to increase demand and increase supply at the same time to make it hard for competitors to compete with their prices and convenient supply of products available all over during the holiday season. Concerning the increase in employees for the season, I believe that is a clear indicator that there are forecasting a large increase in demand for the holidays and they want to be prepared.

I kind of got off track from what my original thoughts. The point is as the holiday’s approach many stores are ramping up on employees to deal with the imminent increase in demand. This might seem like a simplistic post but I thought it was the perfect example of demand and some of its effects on business. Many articles inspired this topic but one I mentioned throughout was “Toys R Us Will Hire 35,000 Holiday Workers”.


Dr. Tufte said...

Except that Toys R Us and FAO Schwartz have both been through bankruptcy because toys are just not a profitable retailing niche.

This is a little outside our current area of study, but an important point worth emphasizing is that monopolies are not a license to print money. Monopolies are everywhere and most of them are money losers, which is why you don't actually see them. For example, you have a monopoly over your next hip hop release, or your autobiography. Having the monopoly doesn't make those profitable.

The same can be said for Toys R Us. I have a hard time seeing them make it as a viable concern over the next decade. It's just too easy to buy cheap toys at Wal-Mart or online.

Paige said...

I think your post makes a lot of great points. The main idea of the post was to show how holidays can create an increase in demand. Obviously if a company is willing to hire an extra 35,000 employees they are expecting an increase in their demand and therefore supply. As would any other company around the Christmas time (and probalby thanksgiving, black friday.) More demand has to equal more supply for the stores, right? I liked the main concept of your post, something I hadn't thought much about, but will in the future!