Hasbro 2015 Annual Report Download - page 32

requirements and our monitoring and testing of compliance with them, there is always a risk that one or more of
our third-party manufacturers will not comply with our requirements and that we will not immediately discover
such non-compliance. Any failure of our third-party manufacturers to comply with labor, consumer, product
safety or other applicable requirements in manufacturing products for us could result in damage to our reputation,
harm sales of our products and potentially create liability for us.
If we are unable to successfully adapt to the evolution of gaming, our revenues and profitability may
decline.
Recognizing the critical need for increased innovation and a change in the way we go to market with
gaming products in order to remain successful in the gaming business in the future, we began implementing a
strategy in 2011 to reinvent our gaming business. The objective of this plan was to stabilize our gaming business
in 2012, and to position it to grow over the long-term. Our strategy to drive our gaming business in the future
involves substantial changes in how we market our gaming products to consumers and how we position them at
retail, a focus on understanding consumer insights and in delivering industry leading innovation in gaming, a
change in our allocation of focus across gaming brands, greater penetration of our brands into digital gaming and
the successful combination of analog and digital gaming. Our strategy also involves making changes in how we
design and develop our gaming products. We recognize the need to provide immersive game play that is easy for
consumers to learn and play in shorter periods of time, as well as offer innovative face to face, off the board and
digital gaming opportunities. People are gaming in greater numbers than ever before, but the nature of gaming
has and continues to evolve quickly. To be successful our gaming offerings must evolve to anticipate and meet
these changes in consumer gaming. Our failure to successfully implement our strategy and to keep up with the
evolution of gaming could substantially harm our business, resulting in lost revenues and lost profits.
Our success is critically dependent on the efforts and dedication of our officers and other employees.
Our officers and employees are at the heart of all of our efforts. It is their skill, innovation and hard work
that drive our success. We compete with many other potential employers in recruiting, hiring and retaining our
senior management team and our many other skilled officers and other employees around the world. There is no
guarantee that we will be able to recruit, hire or retain the senior management, officers and other employees we
need to succeed. Additionally, we have experienced significant changes in our workforce from our restructuring
efforts and the recruitment and hiring of new skill sets required for our changing global business. We have added
hundreds of employees in our global markets, in licensing and in entertainment and storytelling capabilities,
while reducing our overall workforce over the last several years. These changes in employee composition, both
in terms of global distribution and in skill sets, has required changes in our business. Our loss of key
management or other employees, or our inability to hire talented people with the skill sets we need for our
changing business, could significantly harm our business.
To remain competitive we must continuously work to increase efficiency and reduce costs, but there is no
guarantee we will be successful in this regard.
Our business is extremely competitive, the pace of change in our industry is getting faster and our
competitors are always working to be more efficient and profitable. To compete we must continuously improve
our processes, increase efficiency and work to reduce our expenses. We intend to achieve this partly by focusing
on fewer, more global brand initiatives and through process improvements, including in global product
development. However, these actions are no guarantee we will achieve our cost savings goal and we may realize
fewer benefits than are expected from this initiative.
Our business is critically dependent on our intellectual property rights and we may not be able to protect
such rights successfully.
Our intellectual property, including our trademarks and tradenames, copyrights, patents, and rights under
our license agreements and other agreements that establish our intellectual property rights and maintain the
confidentiality of our intellectual property, is of critical value. We rely on a combination of trade secret,
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