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

1280 Words May 24th, 2014 6 Pages
Mattel’s China Experience: A Crisis in Toyland 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. Mattel had been a long time leader in the …show more content…
Sales in Asia could help combat Mattel’s plateauing market in the United States. The company seemed like it was in a strong position. As early as the 1970s Mattel was manufacturing products in China in order to take advantage of lower costs and enable corporate resources to focus on establishing the brand. By 2007, nearly 65% of Mattel products were produced in China. Mattel used a combination of company-run plants and a network of contract manufacturers. Exhibit C displays a simplified example of Mattel’s supply chain after moving production to China. Global production obviously had major benefits for Mattel, the country factors of China gave it a comparative cost advantage over producing in the U.S., and outsourcing enabled Mattel to remain profitable in an increasingly competitive toy industry. However, outsourcing does have disadvantages, a global supply chain increases the challenges to regulate and enforce quality. While Mattel had been a leader in safety standard and regulation, even collaborating with the American Society for Testing and Materials (ASTM) as well as establishing Global Manufacturing Principals (GMPs) the regulatory standards in place were not thorough enough. In 2007, quality issues surfaced within Mattel as various products were found to contain levels way beyond U.S. federal toy safety regulations. During the year, other issues surfaced with Mattel products surrounding the safety

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