...Mattel Cynthia D. Marshall BUS 250 Armando Nunez April 16, 2012 Mattel Mattel started its business in 1945 and company was incorporated in 1947. Company became publicly held in 1960. In 2007, with turnover of $5.6 billion and net profit of $592 million, Mattel was global leader in design, manufacturing and marketing of toys. At that time, Mattel employed more than 30,000 employees and company was selling products in more than 150 countries. Mattel’s portfolio of toys include some of the best selling and most popular toys such as Barbie, Hot Wheels, Matchbox, Radica, American Girl etc. Mattel was always considered as a responsible company. Mattel earned high reputation in the minds of consumers. Mattel was recognized by Forbes magazine as one of the 100 most trustworthy U.S. companies. Mattel was recognized as one of the 100 Best Corporate Citizens by CRO magazine. Mattel outsourced major portion of manufacturing to low cost production countries. In 2007, near 65% of Mattel’s toys were manufactured in China. Company also had factories in Hong Kong, Indonesia, Malaysia, Philippines and Singapore. Near 50% of the revenue of Mattel came from the toys manufactured outside USA. In addition to producing toys in its own factories, Mattel contracted production to 30-50 Chinese companies. Many of these companies in turn subcontracted the production/part of production to other subcontractors. In 1997, Mattel developed a detailed code of conduct - “Global Manufacturing Principles”. These...
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...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 toy industry. Mattel and its main competitor Hasbro held control of over a third of the toy market, even in an industry with over 900 manufactures. However, there had been shifting trends in the toy industry. New electronics and video games were becoming increasingly popular among older children. Since Mattel manufactured classic toys such as dolls, the shifting trend forced the company to focus on marketing towards young children under the age of 12. While this segment responds well to Mattel’s products, they also are the most at risk of endangering themselves. The younger the children, the more likely they are to put toys in their mouth. This behavior puts children at risk of choking or ingesting harmful chemicals. Even with new adversities in the toy industry, Mattel remained a global...
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...Study | Mattel’s Toy Recall And Supply Chain Management | | | 5/11/2014 | | 1) Why do firms contract overseas for production of products they sell? Answer: The firms contract overseas for production of the products they sell to gain certain advantages from the different countries. * One of the biggest advantages is cheap labor that cut down the cost of the products. * To get the advantage of the cheap fuel prices and raw materials to make the products at effective cost. * The companies can get the tax benefits and other government policy advantages by producing their products at overseas. * The companies can also get the lower cost suppliers from different countries. * The company can get the advantage of currency fluctuation to produce the products at lower currency rate. 2) What were the primary causes of Mattel’s recall problems? Answer: There were several causes for Mattel’s toy recall. But the primary causes are problems in manufacturing, design and usage. * Manufacturing Problems: One primary problem is the use of excessive lead paint in toys. Lead was commonly used in paint. However, it is a neurotoxin and is harmful to developing brains in children. Repeated exposure can cause serious brain damage. * Design problems: A second cause for recall was defect in product design. That was the result of increasing use of small powerful magnets in children’s toys. If the designs of these toys were deficient and...
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...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 toy industry. Mattel and its main competitor Hasbro held control of over a third of the toy market, even in an industry with over 900 manufactures. However, there had been shifting trends in the toy industry. New electronics and video games were becoming increasingly popular among older children. Since Mattel manufactured classic toys such as dolls, the shifting trend forced the company to focus on marketing towards young children under the age of 12. While this segment responds well to Mattel’s products, they also are the most at risk of endangering themselves. The younger the children, the more likely they are to put toys in their mouth. This behavior puts children at risk of choking or ingesting harmful chemicals. Even with new adversities in the toy industry, Mattel remained a global...
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...Mattel Recalls 2007 Communication Implications for Quality Control, Outsourcing, and Consumer Relations [ABSTRACT] In August 2007, America's largest toy manufacturer announced the first of what would become five recalls involving 21 million toys—most of which were manufactured in China. This case study and teaching note examine a corporate response to a global crisis and consider the unique communications challenges facing a corporation that operates in an international, crosscultural arena. The teaching note critiques the response’s suitability to the level and impact of the crisis and recommends alternatives. It illustrates that communicators should be cognizant of their international stakeholders and should proactively manage global issues of public concern such as outsourcing and product safety. An example would be that to avert future recalls, Mattel should work closely with its Chinese suppliers and government agencies to implement realistic quality control solutions for which it can be held accountable. The company must reassure stakeholders that outsourcing to China does not mean sacrificing quality. Regaining consumer confidence and controlling the dissemination of product safety information requires strong corporate communicators who can delicately and deliberately balance complex relationships. Table of Contents I. Case Study 1. Overview 2. Company History 2.1 Beginnings 2.2 Reorganization as Mattel, Inc. 2.3 Products 2.4 Accolades for Ethics 2.5 Financial Performance...
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... 2014 Case Study 5: Mattel & Consumer Protection In 2007, Mattel, a global leader in the design, manufacture, and marketing of toys, issued a voluntary recall of 1.5 million Chinese-made toys. A majority of as a result of such carelessness, children’s health and safety were at great risk due to poor toy design, such as loose magnets, and substituting lead free paint for a fatal amount of lead paint on Mattel’s toys to cut corners and save money. As consumers we are naive to believe that boards of directors and higher management in manufacturing companies are highly concerned with our safety. In reality, Mattel has a serious lack of crisis management as well as failing to meet proper safety procedures violating consumers right to safety. As a result millions of children are in harm’s way and are susceptible to life-altering health risks. Having a lack of regulation on imported toys has resulted in high levels of lead paint and loose magnets. Government regulation or a lack of government regulation has also caused many companies aside from Mattel to cut corners and look more at the bottom line as opposed to the safety of consumers. According to Lawrence and Weber, stakeholder theory “argues that corporations serve a broad public purpose; to create value for society”. It can be assumed Mattel was acting unethically with regards to producing unsafe products for their consumers; as a result, devaluing our society in terms of safety. Within the Mattel case the primary stakeholders...
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...The Mattel and the Toy Recalls integrative case poses six questions (four from the case and two from the professor) which will be addressed in this analysis. 1. What went wrong with Mattel’s recall strategy? The strategy used by Mattel in the toy recall was focused on passing the blame to China’s work practices and materials used. Mattel prematurely placed disproportionate blame on Chinese manufacturers and appeared defensive and somewhat fearful. In addition, the toy manufacture delayed reporting to the CPSC by a month and a half after they found out that the toys contained lead paint, even though the CPSC guidelines state that a re-call should be issued in 24 hours. 2. Who are Mattel’s stakeholders, who did Mattel cater to in the recall? Mattel’s stakeholders are the parents buying the toys, the retailers, the employees, the shareholders, management, China, business partners, CPSC, the government and third party contractors. The recall catered to the shareholders thus putting the bottom line ahead of the customer safety. 3. What values did Mattel exhibit during the recall? How did it affect Mattel? By waiting over a month to make a potential toy hazard public, Mattel evaded the truth. Even though a little late, Mattel did work with the CPSC to launch an external media blitz to alert the customers. Also the CEO of the company Robert Eckert apologized to parents in a video posted on website and expressed Mattel's emphasis on family when he spoke to parents from his perspective...
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...INDIVIDUAL CASE STUDY PRESENTATION ON MATTEL This is an ‘open-book’ presentation that is designed to assess your ability to apply the essential theories, principles and techniques of supply chain and operations management to a realistic business situation. The questions will draw on material from the other modules in the MSc Supply Chain Management programme. You will be expected to demonstrate your knowledge and understanding of relevant theoretical principles, concepts and techniques; to apply these appropriately to the particular situation described in the case study and; above all, to make sound decisions. You will not gain marks by presenting a general essay on the topic. Please note that all work should be your own. Copying or plagiarism will not be tolerated and could result in no marks being awarded. If quotes or short extracts are used they should be attributed or the source of the information identified. Play Fair The core values of Mattel, the world’s largest, branded toy manufacturer, appeared on its company website, and on its literature, under the heading ‘Play Fair’: “Act with unwavering integrity on all occasions. Treat each other with respect and dignity. Trust each other to make the right decisions. Be accountable for all that passes in front of us.” In 2007 these values would be put to the test as never before, when it was discovered that substantial numbers of Mattel branded toys had been contaminated with lead paint with global signature...
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...surrounding Mattel Inc., one of the world’s largest toy companies, is their mismanagement of international subcontractors and vendors and the production of certain toys (the manufacturing process), as well as their inability to adapt their marketing strategy or product to the constantly changing “demographic and socioeconomic trends” (Ferrell, et. all 466). This is supported by Mattel’s legal battle with Carter Bryant and MGA, their forced recall of certain toys that were manufactured overseas, and the increasing rate at which traditional toys are becoming less appealing to today’s young audience. Essentially, Mattel’s mismanagement and oversight lead to violations in terms of ethical and social responsibilities and safety standards. Issues Relevant to the Problem: Mattel’s problem of mismanagement can be divided into several issues that need to be considered: legal issues, international supply chain issues, and an increase in technology-based toys. In regards to legal issues, Mattel has been involved in prolonged litigation with Carter Bryant and MGA over a breach of an employment contract and copyright infringement. Due to Mattel’s poor management of its overseas manufacturers, in which unauthorized subcontractors and third-party suppliers were hired and unsafe materials used, several toy products were recalled. Advances in technology and changes in socioeconomic and demographic trends have created marketing, privacy, and product development issues for Mattel. Analysis...
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...that influence profitability potential in the toy industry. Potential entrants Threat of entry in toy industry is moderate. To develop, produce, and market a new toy takes large capital investment in research, development and marketing a product. Within the toy industry, there are large economies of scale, specifically in the marketing segment. Mattel has many well known brands in the marketplace such as Fisher-Price, Hot Wheels, and Barbie. To have the buyers informed, the company has to invest large capital in advertising and marketing. Without having this done to each product, these toys wouldn’t be successful as successful as they are exactly because of the popularity of these products, it is extremely difficult for new companies to compete in this industry. This advantage decreases the threat that new entrants for Mattel. ------------------------------------------------- New entrants may have problems setting up distribution channels because large, established companies already dominate them.. For instance, Mattel has set up numerous relationships with big companies such as Wal- Mart, Target and Toys R Us. ------------------------------------------------- A barrier that new entrants must surpass is the legal barrier. In the toy industrymany products are being patented. Many potential products like ones related to the movie industry, have patents that only certain companies have the rights to. For example, Mattel holds the exclusive right to produce the Barbie...
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...CHILDREN: MATTEL’S TOY RECALLS AND SUPPLY CHAIN MANAGEMENT We apologize to everyone affected by this recall, especially those who bought the toys in question. We realize that parents trust us with what is most precious to them—their children. And we also recognize that trust is earned. —Robert Eckert, CEO of Mattel, Inc.1 On August 2, 2007, Mattel announced a voluntary worldwide recall of 83 products in its Fisher- Price toy lines, including characters such as Dora the Explorer, and the Big Bird and Elmo characters from Sesame Street. The recall, which applied to approximately 1.5 million toys sold worldwide after May 1, 2007, was due to the use of excessive lead paint.2 Over the next month, Mattel announced six more recalls that covered toys with lead paint, as well as small magnets that could become loose and be ingested by children. In October, Mattel made yet another recall for lead paint contamination.3 All of the toys recalled had been manufactured in China. Two weeks after the August 2nd recall, the owner of the Chinese factory that had used the lead paint committed suicide. This series of recalls attracted widespread publicity, as well as political and consumer concerns that sometimes bordered on hysteria. Newspapers and television networks jumped on the story, interviewing concerned shoppers and showing toys being removed from shelves and parents bringing toys to stores for lead testing. Mattel‟s brand image took a serious beating. The toy recalls reinforced...
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...Mattel Toys. Just the thought of those two words brings to mind fun, a trusted brand, and children playing happily. Right? Maybe not. In 2007 there was a massive recall of toys, eighty-percent of which were made in China and coated in leaded paint (Lawrence/Weber). These were toys for little children. Little children usually put toys in their mouths, the toys get slobbered on, the leaded paint chips, little children obviously eat the paint chips and little children get become very ill. While Mattel had policies in place, it did not meet its ethical responsibility to its stakeholders and customers. Mattel has an ethical and corporate responsibility to manufacture a product that is safe for children, to take responsibility when their products are found to be unsafe and to follow government and company regulations to ensure safety. Mattel was believed to be one of the most trusted toy companies around the world that operated in 155 countries. They produced some of the most famous toys for children, such as Barbie, Cabbage Patch Kids, Fisher-Price, and many, many other amazing toys. Beyond concerns about marketing to children, Mattel, Inc. was making a serious commitment to business ethics. For example, Mattel started a code of conduct called "Global Manufacturing Principles” (Mattel.com). These philosophies required all business partners to commit to ethical standards that relate to safety, wages, and adherence to local laws However, recently Mattel was involved in a product...
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...The 2007 Mattel Toy Recall RESEARCH About Mattel Mattel, “the world’s premiere toy company,” began in Southern California in a garage workshop that manufactured picture frames. When the company started selling dollhouse furniture made from picture frame scraps, they realized the market potential and decided switch to toy manufacturing. In 1959, Mattel created their most popular toy, the Barbie doll. Inspired by paper dolls, Barbie was a three dimensional doll with which “little girls could play out their dreams.” Throughout the decades Mattel has continued to create and market popular toys, (Hot Wheels and He-man) merge with successful manufacturers, (Fisher Price and Tyco) partner with children’s program companies, (Disney, Sesame Street, and Nickelodeon) obtain licenses and rights to manufacture popular lines (Cabbage Patch Dolls and Harry Potter merchandise) and acquire other companies (Pleasant Company). Since its conception, the Mattel Company has done a lot to make sure it is considered a trustworthy company for children and the community. The corporation established a children’s charity, called the Mattel Children’s Foundation. In 1997 the company created the Global Manufacturing Principles, making them the first company to create a framework to ensure manufacturing would be conducted through consistent standards on a global level. In 1998 they started a $25 million multi-year donation to the UCLA children’s hospital, which is now called the Mattel Children’s...
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...Ashley Solomon Case 7: Mattel: Overcoming Marketing and Manufacturing Challenges 11/01/2010 Marketing Management 6800 Section 004 The Problem: The problem surrounding Mattel Inc., one of the world’s largest toy companies, is their mismanagement of international subcontractors and vendors and the production of certain toys (the manufacturing process), as well as their inability to adapt their marketing strategy or product to the constantly changing “demographic and socioeconomic trends” (Ferrell, et. all 466). This is supported by Mattel’s legal battle with Carter Bryant and MGA, their forced recall of certain toys that were manufactured overseas, and the increasing rate at which traditional toys are becoming less appealing to today’s young audience. Essentially, Mattel’s mismanagement and oversight lead to violations in terms of ethical and social responsibilities and safety standards. Issues Relevant to the Problem: Mattel’s problem of mismanagement can be divided into several issues that need to be considered: legal issues, international supply chain issues, and an increase in technology-based toys. In regards to legal issues, Mattel has been involved in prolonged litigation with Carter Bryant and MGA over a breach of an employment contract and copyright infringement. Due to Mattel’s poor management of its overseas manufacturers, in which unauthorized subcontractors and third-party suppliers were hired and unsafe materials used, several toy products were recalled...
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...Mattel is recognized as the global leader of toys design, manufacturing and marketing. Company’s product lines includes the brands such as Barbie®, Hot Wheels®, Matchbox®, American Girl®, Radica® and Tyco R/C®, as well as Fisher-Price® brands family. Mattel has been putting significant focus on corporate responsibility resulted in the recognition in the various rankings, including FORTUNE Magazine's "100 Best Companies to Work For" and Corporate Responsibility Magazine’s "100 Best Corporate Citizens". Despite company's efforts towards the product safety, between August and November 2007, Mattel discovered the serious safety issues related to its products: excess lead in paint of some of Fisher-Price products and unreliably fixed small magnets that could fall out of the toys. These issues could produce a significant harm to the kids and after the internal investigations Mattel decided to issue voluntary recall on potentially dangerous products. This paper offers the analysis of Mattel’s actions in view of social responsibility and ethics. Additionally, it suggests specific roles and responsibilities of other stakeholders such as government, industry organizations, and the society that are also involved in assurance of the safety of children’s toys. Analysis of Mattel’s actions and Suggestions for Improvement Corporate social responsibility assumes that companies hold accountability for any of their actions that impact people, communities and environment. With regards to the...
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