Mattel Case Study Essay

1824 WordsNov 15, 20118 Pages
Introduction Mattel, the world’s leading toy and children’s good manufacturer has cultivated a strong portfolio of well known brands and products while being recognized has a highly responsible corporate citizen that makes ethics and safety a priority. The company must build on its heritage, while defending itself from threats. At the same faced with maintaining its market position in the face of many changes in their target market. Situational Analysis STRENGTHS      Strong Products and Brands Global Presence High ethical standards High safety standards Highly influential market segment WEAKNESSES      MGA lawsuit Product Recalls High Dependence on Few Customers Declining Market Share Other litigation and legal…show more content…
It is unknown at this time, if there will be any appeals of the recent decision or additions lawsuits to be filed; but recent Wall Street speculation has indicated that Mattel plans on reducing its legal costs significantly in 2012 (Dividend.com Staff). Product Recalls In the past four years, Mattel has had to recall nearly 30 million of toys due to safety concerns such as lead level in paint, magnets and dangerous toy parts or design. High Dependence on Few Customers 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. Declining Market Share Mattel’s market share has been declining over the last four years, the company growth rate during this period is less than one percent The average growth rate for the industry during this period is closer 10 percent. Other litigation and legal issues Product recalls have opened the company to numerous lawsuits from consumers that were hurt by the recalled products. Opportunities Online and Video Game Markets Children are becoming technology-savvy at a young age and enjoy using the computer and

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