Competition winner: ENGINO Toys:
Staying in China or Moving to Europe?
Who – the protagonists
Costas Sisamos, Founder and Managing Director of ENGINO.
By 2011, ENGINO was offering more than 50 different toy products, suitable for different age ranges and available at various prices. The ENGINO toy system was one of the most versatile building systems on the market as it allowed 3D connectivity in all directions. The target market was girls and boys aged from 5 to 14+. The toys received numerous local and international awards.
Costas was facing a difficult challenge with his outsourced production in China. His Chinese subcontractor had suddenly imposed considerably higher prices for the coming year. Costas was furious and determined to resist the ultimatum.
A talented engineer and experienced primary school teacher, Costas set up ENGINO in 2004. His vision was to design and produce safe and innovative construction toys of the highest quality. After three years of research and development, the first ENGINO construction toys were launched at the Nuremberg Toy Fair.
The company grew rapidly gaining a presence in more than 15 countries including Spain, France, Italy, UK, Norway, Switzerland, Germany, Greece, Israel, Kuwait, US, Taiwan and Russia. Due to limited resources, Costas outsourced production to a Chinese subcontractor in Dongguan province.
‘Has the time come to withdraw production from China? Will it make sense to move it to Cyprus, where I have my home and family? Will my business be financially viable in Cyprus?’ – Costas Sisamos
Costas had believed for some time that moving production to Cyprus would better suit the company’s strategic goals. But there were multiple risks involved in such a move and he had to decide if they were worth taking. Would the company’s future be more secure in China or in Cyprus?
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Olga explains how case writing has become a passion and why she wanted to write about Engino.
Winning this competition means the world to me. I have used cases in my teaching for over ten years and writing my first case turned out to be a challenging yet enjoyable experience. When using this case in class, I saw a radical positive change in students’ learning. Case writing has quickly become my true passion.
Costas is an enthusiastic entrepreneur who cares passionately about his business and also about his home country Cyprus.
Costas became very interested to see, from my secondary research, that a discussion had started among economists about the benefits of western companies withdrawing their manufacturing from China and bringing it back home to the US or Europe. Costas thought that Europe in general and his own country Cyprus in particular needed to boost competitiveness to help the European economy recover.
I saw the Engino’s story as a very interesting real-life example of the strategic investment decision process. In the quantitative subject of finance, I wanted my master’s students to engage with a real company, to connect the numbers with an actual business situation, and use the numbers to help develop the right strategy while also taking into account non-financial considerations. This makes a positive impact on their decision-making skills.
It may be a matter of luck to come across a great story, but as they say, luck favours a prepared mind. My advice is to reach out: participate in professional development workshops for case writers, join professional societies in case research, follow case research and case writing publications, find ways to share your case via presentations at research conferences and by getting reviews from peers, and of course, run your case in class to see students’ reactions: they are priceless.
A big thank you
I would like to express a big ‘thank you’ to all those who helped me with their valuable feedback on this case: my students here at the Cyprus International Institute of Management, and fellow professors from Cyprus and from abroad, especially from the Society for Case Research. Special thanks to Costas Sisamos, Engino’s owner, whose cooperation made this case possible.
About the authors
Olga Kandinskaia is Assistant Professor of Finance at Cyprus International Institute of Management (CIIM).