Mattel Case Study Essay

Sales in Asia could help combat Mattel’s plateauing market in the United States. The company seemed like it was in a strong position.

An alternative strategy is for Mattel to expand into the technology market and add-on/re-innovate their existing product lines. Mattel has made many of the same products since it was established, with the exception of picture frames and doll furniture, which were short lived products. Barbie has changed a little bit, but other than that, the products have remained unaltered. In order to have a competitive advantage, Mattel needs to grow with the market. As of

Toys R Us is the world's largest children's specialty retailer. The company operates toy stores throughout the world and is publicly traded on the New York Stock Exchange. In this paper I will give a brief company history, cite where the competitive environment is coming from, strategies that were attempted, and where they stand today.

I will approach the process of exploring more technologically advanced and interactive toys within the American Girl core brand by pulling a team of people to complete the strategic planning process (Ferrell & Hartline, 2014). A strategic plan is a roadmap to grow your business (Lavinsky, 2013). The roadmap will detail what it will take the implement the new technology and interactive product (Ferrell & Hartline, 2014). The team will explore the new technologies and understand the current status of interactive toys that the Mattel has had success with and the pain points. This will help the team understand what works and what has not worked. Research and analysis will be performed to understand the new technologically that is available

The Walt Disney Company is an outstanding renowned entertainment and media corporation with business ventures in Media Networks, Parks and Resorts, The Walt Disney Studios, Disney Consumer Products, and Disney Interactive. Walt Disney Company is a diversified corporation with products all around the world. (The Walt Disney Company, n.d.)

There are many barriers to new organizations in the toy industry, making the threat of new entrants low. Lego and other big toy companies like Mattel benefit from economies of scale. An economy of scale is achieved by lower costs through large volume production (Textbook glossary). Economies of scale can occur in many departments within the organization including production, marketing, research and development, and finance. Some manufacturing of Lego products was shifted to Central Europe and Mexico in order to benefit from lower wages and to shorten product supply chains (p. 13 of case). The management of Lego additionally holds expertise on production, distribution and customer needs; which are absent in a new organization. To enter the toy sector a potential entrant needs to calculate the start of production at a level that will give a competitive position and production costs lower than the market.

In the past, the toy business was just an annex of the publishing industry. Little effort was invested in toys which were not even mentioned strategic plans. Now the toy industry is the second-highest profit maker in Marvel, generating over $20 billion in sales in 2003. The toy business is very promising in the future. However its percentage in revenue will still remain stable or slightly decrease, just as publishing will do, because licensing has such a strong possibility for growth. In addition, while the toy industry competition is too fierce to permit further achievements.

This paper researched the fact that the Toys “R” Us Company was displaying a weakness in financial related issues due to the lack of proper strategic planning. This made the company susceptible to many threats in the industry’s competitive environment. The research has shown that its main competitors Walmart, Target, and Amazon are functioning successfully in the industry while Toys R Us heads for bankruptcy. This research emphasizes the fact that Toys R Us has not taken steps to strategize its operations properly which resulted in a loss of revenue and opportunities in their environment. If the company does not take steps to better its strategic planning, the company will not

To achieve this about 65 percent of its toy manufacturing was moved to Asia where its products could be produced cheaper. In doing so Mattel now has to work within the culture of its manufacturing facilities to ensure healthy and safe operations to its employees. This means that wage, possible child labor, and other ethical issues could arise, thus as stated before the Global Manufacturing Principles were created and implemented.

Mattel’s three largest customers are responsible for more than one third of the company’s revenue. With such a large portion of the company’s sales dependent on the these three customers any changes such as purchase reduction, favoring competitors or private label expansion, will have a significant impact on Mattel’s revenue. Also, with this limited customer base Mattel is hindered in with its ability to change prices.

Both Nasdaq director independence standards and Corporate Governance Guidelines of Mattel have strict requirements or rules to evaluate and determine whether these directors on the board are independent members in Mattel. In terms of the Nasdaq director independence rules, independent or outside directors are not allowed to participate in any material and pecuniary management activities and transactions as managers or employees. In addition, executive officers and employees who work in a listed company are not able to qualify independent directors, and members who have intimate relationships with other directors or executive officers also cannot be outside directors. However, the Corporate Governance Guidelines determine that members who take part in the Audit Committee, the Compensation Committee, the Executive Committee, the Finance Committee, and the Governance and Social Responsibility Committee are independent with material transactions and executive managements. As a result, there are ten directors on the board in Mattel, and only Christopher A. Sinclair, the CEO of Mattel, is not independent with the exercise of independent judgement and has no evidence to satisfy requirements of Nasdaq’s and Mattel’s director independence standards. In the other words, there are nine outside directors (90%) and one inside director (10%).

Others felt that they should consider Indonesia as a way to take advantage of low labor costs and very attractive exchange rates. Mattel currently operated a plant in Indonesia that produced Barbie® dolls. Montalto had to decide whether Mattel should go forward with the new China plant, build a plant in Malaysia or Indonesia, expand one of the existing facilities, or outsource the surplus die-cast volume through VOA. Company Background Based in California, Mattel, Inc designed, manufactured, and marketed a broad variety of toy products. The company’s core product lines included Barbie fashion dolls, Hot Wheels die- cast toy vehicles, Cabbage Patch Kids, Fisher-Price preschool toys, and Disney toys. Most of these toys were made overseas, primarily in southeast Asia. Mattel had wholly owned manufacturing facilities in China, Malaysia, Indonesia, Mexico, and Italy. Mattel was founded in 1944 by Elliot and Ruth Handler. Neither Elliot nor Ruth had much business experience or capital, but they both had dreams. The post World War II demographics of a huge baby boom plus a virtually toyless marketplace provided a unique opportunity to gain a place in a growing toy market. Mattel’s first products, simple picture frames and doll house furniture, met with mixed success. The first really big hit was a music box. By partnering with another toy inventor, they developed a music box that could be

For opportunities, Barbie is a worldwide brand. So there is an opportunity for the company to use that reputation to increase its market share.

1. Do you believe that Mattel acted in a socially responsible and ethical manner with regard to the safety of its toys? Why or Why not? What should or could Mattel have done differently, if anything?

MATTEL TOYS RECALL CASE STUDY Product  recall:   On  August  14,  2007,  the  U.S.  Consumer  Product  Safety   Commission  (CPSC)  in  cooperation  with  Mattel  announced  five   different  recalls  of  Mattel's  toys.  On  September  4,  Mattel   announced  three  more  recalls.  Some  were  due  to  the  use  of  lead   paint,  while  others  were  due  to  small  magnets  coming  loose.             On  August  2,  2007,  Mattel's  Fisher-­‐Price  subsidiary  recalled   almost  one  million  Chinese-­‐made  toys,  including  the