Essay on Mattel’s China Experience: a Crisis in Toyland

Although Mattel has its challenges, Mattel’s market in Asia has created opportunities for outsourcing as a

Rather than having the most responsive supply chain possible, Mattel has attempted to design a leaner supply chain as evidenced by the use of POS data sharing and combining shipments.

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

Global retailers are managing manufacturers in making decisions about product quality, type, and price. A flaw in the United States-China trade relationship is the United States can afford to buy Chinese goods, but Chinese do not have the means to buy from the United States. Eighty percent of Walmart’s six thousand suppliers are from China, the biggest producer of high-tech products in the world. The Chinese company, TLC, is the largest producer of televisions in the world with the majority of all United States exports going to

In today’s modern society, outsourcing is common. Some common outsource jobs are manufacturing, recruitment, and web programming. Even though outsourcing is common, it has a positive and a negative effect to different people. Big businesses see outsourcing as a great opportunity. Apple, for example, outsources to multiple countries such as China, Mongolia, and Korea (“Apple’s iPhone”). Apple has different parts of the iPhone developed in different countries. In Mongolia and China, the company used raw materials such as Yttrium and Europium to create the iPhone’s color screen. Also, LCD panels and batteries are made in Taiwan (“Apple’s iPhone”). If Apple produced the iPhone in the United States, the price of the phone would be outrageous to

Mattel designs and manufactures toys that are treasured by boys and girls all around the world. They believe in the influence of play and the power it has on children to grow and learn. This paper will look at who was responsible for Mattel initiating the recall of its toys, whether Mattel acted in an ethical, responsible manner in regards to the safety of their toys, and also look at ways society can protect children from harmful toys.

Years passed before the Mega Brand Agency and Consumer Product Safety Commission (CPSC) began to read the reports and concerns about their popular Magnetix toy. However, they were working behind the scenes in order to keep the reports and concerns unknown to reporters so they would have to take responsibility for their action. When Mega brand and CPSC finally started taking action, the first recall they had performed barely made a difference. Many children still encountered the toy, many parents still had access to the hazardous product. CPSC still pushed 3-4 more recalls that had the same outcome as the first. After many failed attempts to recall the broken toy they stated that they had been putting caution label in the new improved

It is interesting to look at the Mega Bloks case for several reasons. Firstly, Mega Bloks has not yet made the move and therefore the results of this venture are not yet known. We can presume, however, that Mega Bloks has done careful diligence on many of the issues we will propose before entering into such an agreement. The prospective nature also means we can now observe the actual impact in their business versus the outcome Mega Bloks has predicted. Also, the toy industry is going through significant changes that make it more and more necessary for producers to compete on price and innovation. Specifically, children are becoming more tech-savvy at a younger age and have far more toy options . Innovation and low cost are becoming the keys to success for toymakers. By Mega Bloks shifting production to China, they are hoping to reduce costs and be able to focus on their core competencies, which they describe as "new product development and superior customer service " This move to China will have a tremendous impact on their supply chain and Mega Bloks will face many important issues and problems as they move ahead. Finally, the toy industry is one with established offshoring practices, Shenzhen China now being known as the toy production capital of the world.

Mattel’s response to the lead tainted toys crisis exemplifies the importance of having a strong, updated crisis management and communication plan that reflects the company’s culture and values. Companies, in the future, should look to Mattel’s response as a model for planning and responding to

The opportunities-strength is much heavier than the threats-weakness of Mattel that there will be more generated profit than losses and identifying their weakness and the threats of the environment can provide strategies for further improvement of their product (Tacbobo,

Mattel, the world’s largest toys company, had been faced with some rough challenges due to some safety scandals revolving toy design and manufacturing in China. During August 2007 Mattel was forced to extremely recall toys due to loose magnets and excess lead found in some of the Mattel toys that posed immediate danger to the children that played with them. “Mattel voluntarily recalled 1.5 million Chinese made, Fisher-Price product, after the company learned that they contained too much lead.” A second recall of Mattel’s most popular items such as Barbie, Batman, Polly Pocket and Doggie Daycare play sets. The items contained small magnets that could fall out of the toy and be swallowed by young children.

Industry leaders Mattel and Hasbro have recently implemented similar strategies that involve selling unprofitable businesses such as the sale of each company’s software division in the same year (2000).11,13 Predicting they would not be able to directly compete with the software entertainment industry, both companies began focusing on their core brands to gain efficiencies in more areas of the value chain and exploit the total profit-pool. The focus on core brands that have already proven to have sustainable advantages will show steady returns and improve sales to total assets, which is a discouraging number for both companies being in the bottom 25% of the industry in generating sales from assets. Focusing on a few core products increases efficiencies throughout the value chain from the experience of doing similar activities. Products that have already stood the test of time allow the corporation to cut costs normally associated with new products such as R&D and advertising. The enormous R&D cost

Manufactures must understand the obstacles and challenges they face, understand their jobs to fit into larger organizational objectives (Kazmer 2014). Global challenges for the managers is to understand the process of suppliers and getting their feedback. Motivating them to exploit new manufacturing technologies and establishing close relation in work (Olausson, Magnusson and Lakemond 2009). One of the main global challenge for the manufactures is the two available outsourcing strategies. Advantages can be gained with respect to cost when domestic outsourcing option remain competitive across the globe. Understanding the challenges in domestic versus international outsourcing options and at the same time managers have the challenge in how to reach a particular decision (Pearce 2014). Another global challenge for Chinese manufactures is how to optimize their gross profits.

The shifts in the jeans manufacturer Levi Strauss’s global strategy could vividly demonstrate how global sourcing strategy works and affect its supply chain. At first, the company was created in the USA. As it developed and became a global company, they began to employ workers all over the world. However, in face of fierce competition, Levi Strauss started to shift its operation to lower-cost countries in the late 1980s. By the year 2003, Levi Strauss closed the last four plants in North American and ‘has become an entirely offshore producer’ (Dicken 2011 p.318). The German fashion company Hugo Boss also provides similar example. In face of high production cost, namely high labor cost in domestic market, more and more fashion retailers choose to outsource their production. Moreover, some fast