Mattel Toys Recall Case Study

In order to get toys in its stores by October, Specialty places one-time orders with its manufacturers in June or July of each year. Demand for children’s toys can be highly volatile. If a new toy catches on, a sense of shortage in the marketplace often increases the demand to high levels and large profits can be realized. However, new toys can also flop,

In 2007, Mattel a California based toy company shockingly recalled 19 million toys that had been manufactured in China. Mattel was founded in 1944, and has produced iconic toys such as Barbie and Hot Wheels. The company had a long established trust with their consumers that had been forged from decades of reliability. However, when the company recalled 19 million toys due to health and safety violations, consumer confusion and outrage soared. The public wanted to know how such an established company’s safety regulations could fail, how Mattel was addressing the issue, and whether consumers could trust Mattel to produce reliable toys in the future.

recalls related to product quality problems. Observers felt the company would have lost even more

The purpose of this memo is to document and evaluate the business risks faced by Toy Central Corporation (TCC), as well as audit risks, accounting issues identified, and management assertions affected.

Use the sales forecaster’s predication to describe a normal probability distribution that can be used to approximate the demand distribution. Sketch the distribution and show its mean and standard deviation.

The biggest environment force affected Mattel recently has been legal and regulatory with the high levels of lead paint found in their die-cast toys in 2007. This issue created a voluntary recall from Mattel for over 2 million toys and created doubt in customers to the quality of their Mattel toys. Mattel responded by immediately implementing a check system to accept paint only from certified suppliers, tightened controls throughout the production process and testing every production run to ensure compliance. Mattel said that it is working in cooperation with the U.S. Consumer Product Safety Commission and other regulatory agencies worldwide. Mattel is also working with retailers worldwide to identify and remove affected products from retail shelves.

In this day and age consumers always want more and they want it at the lowest price possible, but are they willing to risk the danger that could derive from it? Hundreds of thousands of toys are imported daily from overseas countries, such as China, into the United States, some toys are inspected for irregularities, but most are not. This may not seem like such a problem but the truth of the matter is that it is one of the larger problems in the nation right now. Children’s toys imported from China are found to be contaminated with high levels of lead and infecting American children with lead poisoning. Some people may say that this is an unnecessary argument, that China isn’t doing anything harmful, maybe it was just a few faulty toys,

Organizational Hierarchy Structure- Toys R Us was a decentralized organization, which had a leadership type setting from country to country. This type of structure was difficult because all the leaders from different countries were not communicating effectively. The company knew they had to make some changes to the system, if they wanted to be successful. Therefore, after careful consideration, the company decided to move to a more centralized structure. This change was needed to strengthen their business with regards to their compatibility amongst countries and creating a more efficient workplace in the United States and abroad. In the company’s business in Europe, instead of their being different leaders across the continent, there will

Recently, the company commissioned Chinese companies to produce some of its toys. These Chinese-made toys were suspected of containing harmful aspects for children such as magnets which could be swallowed by children, hazardous lead paint, and plastic ignition key that kids can sit on or fall.

1. The decision facing Mattel is whether to continue to produce their products internationally where cost are low, or produce them in the United States where costs are significantly higher but quality is better. Mattel might want to even reconsider going global if there sales are decreasing more internationally than in the United States. Mattel needs to determine how many of the products produced internationally were recalled versus the amount of products produced in the United States that were recalled. Mattel also needs to decide how they are going to advertise their products in a way that will convince consumers in the external environment to buy their products, without having any

Through studying the entire retail toy industry, we have been able to understand the complexity of the industry in which Toys "R" Us operates. Upon completion of the analysis, we realized that the industry is growing stably,

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

In the contents of this case there are several management and safety issues and areas for improvement. One issue is Mattel, Inc.’s

As we can see Mattel does a pretty good job of of managing risk within its own business. However, it is some of these large multi national companies that often overlook managing corporate integrity risk in there supply networks. Companies have inserted clauses into their standard contracts with suppliers requiring them to comply with the rules and regulations applicable and materials used must exactly that which has been stated in the contract.

The only thing that Mattel could have done differently was to have a quality inspector at every level of production and shipping. Although more costly, it could have prevented from these products from reaching the retailers’ shelves. Another thing process that Mattel could have done to ensure that the problem would have not happen is to have a tighter control over the companies that it contracts with to supply the components and materials used in their manufacturing process. If they had tighter control over them, they