Mattel Case Study

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Introduction and Background
Mattel was started in 1945 in a southern California garage workshop. It reached global share leadership through the growth of Barbie in the late 1980’s and early 1990’s. During this time Jill E Barad leveraged her marketing talent to build Barbie from $250 million in annual sales, in 1980’s to $1.9 Billion in 1998. This success gave reason for Jill Barad to ascend to the CEO of Mattel in January 1997, which was the height of the company’s success. A little over a year later, Mattel’s stock reached a ten-year and record high of $45.625, which was a big jump from the $27.75 it was at when she took over.

Problem Identification
The troubles began in 1994 when Toys from new companies started taking the market
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For example, Mattel said their earnings for the fourth quarter of 1999 would be 70 to 80 cents per share, but instead they reported a loss of $184 million. The declining sales at the Learning Company was the main reason for the loss. Ms Barad continued to over promise and under deliver. In the three years that Ms Barad was CEO, Mattel went from double-digit revenue and earnings growth into two consecutive quarterly losses. In 1998, Mattel announced a $500 million revenue shortfall. Mattel surprised Wall Street analyst four times, while she was CEO. In 1998, Mattel announced their earnings growth for 1999 would be 9-12 percent, instead of the anticipated 18 percent. Three months later, in December of 1998, Mattel warned that revenue would fall short by $500 million and earnings would be 30 percent below previous estimates. The last one was the steep losses in the third and fourth quarters of 1999. Each time Ms Barad reassured Wall Street that their problems were over. In October 1999, she told analyst that Mattel continued to be confident in their future and even mentioned expanding sales Internationally. Her continued confidence was proof that she was reluctant to gain a full understanding for the learning Company’s problems and a refusal to accept responsibility. Mattel lost $171 million in the first quarter of 2000, which included severance packages for Ms Barad and other senior

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