Case Study Analysis: Case 25 - Mattel’s China Experience: a Crisis in Toyland Introduction Over the years, Mattel has established a distinct reputation in the toy industry for its strong commitment to product quality and safety. It was the leading toy manufacturer both in the U. S. and globally in 2007. There had been a number of management turnovers before Robert Eckert, its present CEO, assumed the position. Mattel has had its share of remarkable industry breakthroughs and downfalls from the time it was founded in 1944. In 2007, an incident occurred that had threatened the once exemplary reputation of Mattel under Eckert’s leadership.
Mattel issued a recall for over 19 millions of toys made by its manufacturing partner in China. The said recall was due to the discovered lead paint content in the toys that is above the acceptable U. S. standard level. Thus, Mattel is now facing the challenge of restoring its reputation and regaining the trust of consumers. Key issues The key issues here are the failure of Mattel to carefully evaluate its toys before distribution considering its rigorous efforts of securing the quality and safety of its products; and the company recovery plan that should be undertaken not only to recover its significant revenue loss, but also to redeem consumer and global trust.
Moreover, 2.2 million of the recalls made were not solely due to lead content but some of them were due to faulty design and hazardous small magnets content. An effective strategic plan must therefore be worked on to take the company out of the disarray it has unexpectedly entwined itself into. Strengths 1. Leading in sales in the U. S.
& globally 2. Mattel utilizes the Global Manufacturing Principles (GMP) 3. Mattel had been renowned for its commitment to product quality and safety Weaknesses 1. Lower sales with children 10 yrs. and up 2. Significant increase in costs due to recalls 3. Largest competitors were in the U. S. Opportunities 1. Low manufacturing costs / “China price” 2. The toy industry was integrating into entertainment business Threats 1. Children’s toy preferences were shifting 2. Mattel has already depended on China for manufacturing 3. China had several incidences of recalls in 2007 4. Very limited presence in electronic entertainment SWOT Analysis Analysis & Recommendation: Based on the SWOT analysis, Mattel has established a stable position in sales and an outstanding reputation in their products.
However, Mattel has a limited market and product line, factors that the company might lose to competitors. It had also incurred significant loss due to the recalls. Nevertheless, Mattel should not disregard the great advantage of the cheap manufacturing partnership it had found in China. Therefore, it is but wise that Mattel retain its assets and reinvent its product line as well. However, the quality monitoring should be scrutinized and improvements on policies should be implemented strictly.
A more effective network among local and offshore partners must also be worked on. Mattel should ensure the public that all affected toys are completely removed from the market. Reference: SiteGround. (n. d.). SWOT Analysis Template. Retrieved January 6, 2012, from http: //swotanalysistemplate. com/