Meridian Success Story: 4

Learning Curve International, LLC (now RC2 Corporation)

Stalled $54 Million Children’s Toy Company Sets a New Direction and Grows Annual Revenues to $130 Million in Four Years

• Client Issue: Whether and how to grow beyond the company’s primary customer base, specialty toy stores, which had experienced no revenue growth in recent years
  
• MAI Contributions:
  
  • Provided Strategic Counsel to LCI Executive Management in three areas:

1. The design of offsite strategy sessions for the company’s senior team that made building and implementing corporate strategy a collaborative team effort
2. Financial analyses that informed the strategy development process
3. Effective design and interpretation of industry and market research so results were much more useful in guiding decisions about corporate and product line growth strategy
• Identified A Breakthrough Expansion Strategy: Drawing on MAI strategic research, LCI management, in collaboration with MAI, identified an expansion strategy that:
1. Enabled LCI to enter successfully the mass market store channel with the highly-appealing, uniquely-positioned, “Take-Along Thomas” product line, resulting in a contribution of $14 million to the LCI top line within two years of launch **
2. Simultaneously accelerated growth of LCI’s core business by capitalizing on synergies between the core and the new channel entry
3. Redirected investment away from a newly-acquired but limited-potential (as identified by MAI) brand portfolio in favor of additional spending against company’s core business
4. ** Innovative “Take-Along” Positioning Concept, Originally Identified by MAI, Has Been Extended Even Further Under New Management: RC2 Corporation, which subsequently acquired LCI, has reaped continuing value from the “Take-Along” consumer concept first identified by MAI for the Thomas line. RC2 has since introduced: “Take-Along Bob” (the Builder), “Take&Toss” toddler feeding system, and the recently-introduced “Take-Along Nickelodeon” line
• Led Multiple Offsite Corporate Strategy Sessions that Improved the Context for Strategic Thinking, and Greatly Enhanced Collaboration, Among the Senior Team: Meridian’s offsite sessions guided the LCI team to:
1. Identify and prepare for a widely-unanticipated industry evolution that actually came to past – i.e., the disappearance of specialty toy stores such as Zany Brainy, FAO Schwarz
2. Identify and define action steps for new strategic growth opportunities, and
3. Agree to 3 Year spending priorities
• Provided On-Going Strategic Support: By monitoring industry developments and outcomes of LCI strategic actions, MAI was able to provide early-stage management guidance for revising spending priorities and implementation activities

• Results:

1. LCI Total Revenues More Than Double: The growth strategy partnership between LCI and Meridian Associates that had begun in 1998 when LCI revenues were considered “stalled” at $54 million, led LCI to deliver more than $130 million to the top line four years later.
2. LCI Is Acquired in 2003: The progress of LCI attracted the interest of Racing Champions Ertl, a firm then competing in a related industry. Racing Champions acquired Learning Curve in March 2003 and the combined entity was renamed RC2 Corporation.
3. Company Leaders Handsomely Rewarded: Leaders of LCI, who were ready to step down just prior to Meridian’s initial involvement, are generously rewarded on sale of the company. They attributed much of the company’s success over the four years preceding the sale to the support and guidance provided by our Meridian team.
   

Click here to read about an LCI Management Team Offsite Strategy Session structured and led by MAI