Transcript Mattel - Weebly

Group 11:
Ahmed Al-Kadri
Nick Colarossi
Kechi Emelike
Reshma Parikh
Yena Soro
HISTORY OF MATTEL
• Mattel is an American toy manufacturing company that
was founded in 1945.
• Founders: Harold Matson & Elliot Handler
• It is known for manufacturing some of the top toy brands
including Fisher-Price, Barbie Dolls, Monster High
Dolls, Hot Wheels, and Matchbox toys.
• In 2002 they fully moved all of their manufacturing over
seas and outsourced all their jobs to China.
• In 2008 it was ranked 413 on the fortune 500.
CONCERNS CREATED BY MATTEL RECALLS
•
On August 14, 2007, Mattel recalled over 18 million products. Many of
the products had exceeded the US limits set on surface coatings that
contain lead.
• Additional recalls were because it was possible that some toys could
pose a danger to children due to the use of strong magnets that may
detach. Mattel re-wrote its policy on magnets, finally issuing a recall in
August 2007
Issues Included:
• Toys and products safety
• Quality control when outsourcing to China
• Toy safety inspection processes: Batch testing
WHY THE RECALL
• Lack of internal control
• The use of Lead Paint
• Mattel products integrity and corporate responsibility
• Toys and products safety
CSPC TOY SAFETY STANDARDS
• Companies must report defectives products and recalls
within 24 hours of discovery.
• Paint and other similar surface-coating materials
• The role of the CPSC.
SOCIAL RESPONSIBILITY
•
Global Manufacturing principle and ethical standards in
the factories
• Poorly designed magnets: Lack of control over the
material use.
• 35 % of Toys produced outside of China
MATTEL’S EXTERNAL ENVIRONMENT
Competition:
• Mattel’s stocks price declines due to the high competition
• The level of toys safety check have increase with CPSC
• Increase of outsourcing and subcontractors
Legal:
• Lawsuits
• Allegations of failure to disclose recall in timely manner
• CPSC standards
THE SAFETY STANDARDS OF MATTEL
• Children Health
• Promote the company integrity and loyalty to its
consumers
•
Legal requirements and industry standards for product
quality and safety
MATTEL’S OUTSOURCING
• China:
- Human capital : The foundation of Intellectual Capital
- Tremendous increase of its population
- Low average wage per month- $200 per month
- Chinese’s currency, Yuan, was undervalued
SWOT ANALYSIS : MATTEL
Primary factors
S
Strengths
W
•Weak online presence in the new
millennium
•Inability of traditional toys to hold modern
interest
•Product safety concerns and regulations that
have arisen since 1945 (Such as choking
hazard warning signs)
•Utilization of cheap 3rd world labor despite
large profit margins, questionable
management team decisions surrounding this
practice
•One of the largest toy producers in the
market
•High volume of sales per year
•Brand recognition and loyalty
•Company longevity has created iconic toys
•Leader in the production of traditional toys
•Diversification in global toy market,
providing toys for various ethnic backgrounds
O
Opportunities
•Development of new toys to support
technological changes
•Create stronger online marketing segment to
connect to new generation of consumers
•Increase quality control to decrease safety
concerns and subsequent recalls of popular
toys
•Reorganization of management team
Weaknesses
T
Threats
•Imitability of products in other cheap labor
markets by other low cost producers
•Advancing technology influencing consumer
tastes
•Company products run the risk of being
antiquated and viewed as less important
SWOT
ANALYSIS :
MATTEL
Due to the size of Mattel, they are able to stay
afloat on high sales volume even at lower costs
than modern video games, in large part due to
their utilization of 3rd world labor for cheaper
quality products. This has led to numerous
product recalls and hurdles complying with
government safety regulations. Their iconic
products such as the Barbie and Ken line, as well
as board games such as Scrabble have been
around for decades and have established a
reputation and brand loyalty that persists to this
day. While these lines can technically be
continued indefinitely, at some point they will
begin to languish in the face of advancing
technology and changing consumer
entertainment tastes. In order to survive, Mattel
must begin to develop its technology driven
segment and work on new age marketing tactics
to remain relevant.
Generic Strategy:
Mix Between Cost and Differentiation
Lower price by: Economy of Scales
Move Factories to growing countries with lower cost.
Licensing with Cartoon and Movie makers.
Internationalization and Cooperation Strategy.
Outsourscing: Toy Parts
Alliance: Walt Disney, Wal Mart, Toy R'us.
Global Strategy: -Invest Oversea
-Standard Products.
Mattel Strategic Business Strategy
1. Low Threat of New Entrants:
- Time & Capital require to establish a brand name
- Big Existing Players
- Economies of Scale
2 Medium Powers of Buyers:
- Effect to Price
- Effect to R&D, Strategy
3.High Threat of Substitute:
- Many substitute products
- Different from price to quality
- Different brands
4.Low Power of Suppliers:
- Low bargaining power
- Wide variety of Alternative
- Cost based decisions
Strategic Issues
1. They Outsourced without full quality control which led to Product quality.
However, in August 2, 2007 they had to recall over one million Chines made toys
because of the potential hazard of lead paint. Also in August 14 2007 Mattel
recalled over 18 million products due tot he possibility of danger to children from
detachable magnets.
2. Production/sales Geographic is not optimize which made different strands of
the Toys they were making that leads to a high risk.
3. No Diversification products type so it an not satisfy the market needs which is
also a High risk.
Recommendation
- Reevaluate Production facilities location & Diversification manufactures and
Suppliers.
-Rebuilt and strengthen Mattel Brand's image.
- Research and plan to invest in new technologies for a new product to fit growing
trends.
- Mattel would consider building new production plants in other growing countries.