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The Mattel Company
The Mattel Company, which is one of the major toy manufacturing, designing, and
marketing companies for a majority of family products and toys, has been able to face various
challenges, has its weaknesses, opportunities as well as threats to its operations. The Mattel
Company, started by Elliot Handler and Harold “Matt” Matson, in the year 1945 has been able to
operate in a changing world, where there is tough competition, among other issues affecting the
markets and the global economies (Cincotta et al., 2007, 3). This study case shall analyze the
various external (by analyzing the five Porters model, the PEST analysis)and internal factors (the
SWOT analysis) to evaluate business strategies and marketing opportunities for Mattel Inc.
First, I focus my External analysis of Mattel Inc. with the PEST and the Porter’s Five
Forces Model. The PEST Analysis focuses on analyzing the various political factors, economic
factors, the social, as well as the technological factors (Ho, 2014, 6479). Mattel Inc. has put into
consideration all the political factors, by establishing a major connection between the company
operations, and respecting the local as well as the international laws. The company has also put
into consideration all the economic factors, by ensuring that it produces highly competitive
products, such as the Barbie and the American Girl dolls. The company also respects the rights
and privacy of its employees, as well as its customers. The social factors also play a major role in
Mattel’s Plan, where the company has sponsored various social activities such as the Mattel’s
Children Foundation, Mattel’s Children Hospital (UCLA) at Los Angeles, as well as the Mattel’s
Volunteers; Happy to Help Program. Mattel has also considered the technological factors, by
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putting into consideration all the technological safety of its clients, as well as in its production
processes (Abdullah &Shamsher, 2011, 4).
The Porter’s Five Forces Model is usually based on five major issues, which include the
entry barriers to the market, rivalry in the market, the threat of substitutes, buyer bargaining power
as well as the supplier bargaining powers (Indiatsy et al., 2014, 78). There is an intense rivalry in
the production of dolls, especially between the Bratz Company and Mattel Inc. which threatens
the company operations. The economy has been open for a long period, and so, it is easy for other
companies to venture into the production of products, related to the ones produced by Mattel Inc.
Moreover, the buyers have a major bargaining power, which is based on the availability of other
activities, which can create a similar satisfaction, such as the availability of the internet, and other
related products. There are issues, such as the ones directed to Mattel Company by its suppliers,
who want an increase in their revenues and even the demand to recover their spent money
(Cafferky, 2005, 8). The major threat to Mattel Inc. is the availability of rival products, which act
as substitutes, especially the ones made by the Bratz Company.
Furthermore I notice that Mattel Inc. has readily available and accessible resources. The
company also has various distribution channels. Mattel Inc. has also established a great brand
name, which has had a good reputation among its customers. Moreover, Mattel Company has a
good relationship with its business stakeholders, which includes the customers, suppliers,
producers and even the employees. Mattel has a diversification of its products. The company has
adopted the low-cost manufacturing techniques, which have enabled the company to have more
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revenue returns and produce using low capital. Furthermore, Mattel Inc. has other sources of
strengths for the Mattel Inc. is the good public relations, as well as the availability of the economies
of scale for the company (Mattel Inc., 2013, 37).
However, Mattel Inc., just like any others business organization, it has its weaknesses. One
of the major weaknesses for the Mattel Inc. is the lack of long-term contracts between the company
and the customers. Mattel has the challenges of disputes with other companies and even states,
such as the Bratz, and the Chinese government. Mattel Inc. has also failed to predict the purchases,
causing financial fluctuations within the company. Mattel Inc has failed to differentiate the
products, “teens’ and the “tweens” (Jordi, 2015, Para 5). Mattel Inc does not satisfy its retail
distributors because of underproduction. Licensing dome of the products becomes a major problem
because of the protection of the children’s rights and privacy. Also, there is intense competition
from companies which produce cheap products of low quality, which act as substitutes for the
Mattel Inc. products, hence weakening the company (Vincent, c. 2008, 1). Furthermore, poor
leadership, which is strict, like the leadership of CEO Barad, who was tough and strict, causing a
decline in the revenue returns for the company.
Mattel Inc. is presentedwith various opportunities. Some of the major opportunities for
Mattel Inc. include the availability of internet marketing. Also, globalization has helped Mattel
intensify its production in all parts of the world (Value Line Inc., 2017, Para 3). Mattel Inc. can
relocate its production plants from one point to the other, creating better storage and transportation
facilities for the company. Additionally, collaboration with companies which focus on creating
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similar and related products intensifies the financial returns for the Mattel Inc. Good leadership is
an opportunity for the company, such as the leadership of CEO Robert Eckert, who replaced Barad.
There are various issues, which threaten the existence and the development of Mattel
Company. Firstly, the collapse of major markets and the deterioration of various economies is a
major blow to the Mattel Inc. Secondly, fluctuation of currencies like the Venezuela Bolivar and
the Chinese Yuan are also major threats for the Mattel Inc. given that Venezuela and China are
major operating grounds for the company. Thirdly, increased cases of Mattel Inc. of recalling some
of its products due to various factors are a major threat to the company (Harrison, 2010, 94). Loss
of interest inchildren, because they lack leisure time, developments of the internet and online
gaming activities, is a major threat to Mattel. The shift in preferences by the various clients is also
a major blow to Mattel since many children prefer the internet to playing with dolls in the modern
world (Cincotta et al., 2007, 20). Easy market entry by the related companies is a major threat to
the operations of Mattel Inc. Lastly, bankruptcy declaration by a majority of its sellers and
suppliers, and so, they cannot continue the business operations with Mattel Inc. is a major problem
for Mattel Inc.
Mattel Inc. has been able to adopt various marketing strategies, which ensure that, it sells
its products to a majority of the people all over the world. Mattel Inc. has incorporated parents in
the matters of marketing for the company’s products, especially via the online platforms. The
company protects the rights and the privacy of children, which gives the parents and the guardians’
confidence. Mattel Inc. has adopted ethical business operations, where, it has conducted audits in
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all its business premises to ensure that there were no cases of child labor or forced labor. Mattel
has created a good name for its company, by showing authenticity and legality. Additionally,
Mattel’s independent audit council ensures that there is a guarantee of human safety and the
protection of human rights in all business joints related to Mattel Inc. The Global Manufacturing
Principles of1997aims to show favor to businesses which protect human rights and ensure that its
employees are secure and do not get forced to work. Mattel Inc. has also ensured that its associates
adhere to various stipulated laws within the company. In conclusion, all stakeholders must adhere
to the laws wage policies, working schedules, consideration of bylaws and other local laws, as well
as the creation of safety and protection measures for all its employees (Palmer et al., c. 2010, 5).
Mattel Inc. has also created responsibility for all its stakeholders in the business operations
and also promotes and improves the capacities of its employees. Additionally, Mattel’s
stakeholders must portray the ability to uphold and even promote the principles of Mattel Company
and operate within the stipulated laws of the state as well as the international laws. The partnersalso
adhere to the Mattel’s Global Manufacturing Principles, enabling Mattel to have access to the
business records and even allow basic inspections of its operations by Mattel Inc. officials.
Moreover, Mattel Inc. has helped the society by creating the Mattel Children’s Foundation of 1978,
the Mattel Children’s Hospital at the University of California, Los Angeles (UCLA), Family
Learning Program, as well as the promotion of gift kits for the UCLA facility. Mattel Inc. has also
focused on the creation and the sustenance of the Mattel Volunteers: Happy to Help program as
well as adherence to the various laws. Lastly, The Mattel Company has also been able to promote
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human rights and protection of its employees, by observing the minimum wages, working hours
among other factors (Cincotta et al., 2007, 8).
Marketing strategies are the plans which are set and used by the companies and other
businesses to ensure they get the highest number of customers, making profits as well as ensuring
that it adheres to the various factors of the markets. Marketing strategies also include all the
business set goals and objectives, whose major aim is to increase the level of revenue returns and
increase the competitive business advantage in the market (Kanagal, 2015, 3).
Mattel Inc. has adopted various marketing strategies which have been able to push the
business operations forward. Some of the marketing strategies adopted by Mattel Inc. include the
customer lifetime value strategy, which has enabled the company to analyze the various situations,
of what might happen if the company brings into market a new product (Gay, 2014, Para 3).
Additionally, Mattel Inc. has adopted the Marketing Mix Modeling strategy, which helps the
management team to know how it can distribute its various resources and how funds can be
allocated so as to enhance a certain brand. Furthermore, Mattel Inc. has been able to adopt the
customized target strategy which enables the company to produce and even market its products
based on the needs and the demands of various customers, such as children and the teenagers. A
deeper analysis of the study is conducted below, to show how the various strategies have been
implemented.
Mattel Inc. has diversified its products, which make it possible for the business to create
more profits and increase the number of clients. Additionally, Mattel Inc. has adopted rapid and
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fast changes to its production and marketing of its products for marketing and production purposes,
such as in the Barbie doll, Mattel Inc. changed to produce another doll, for the younger girls, who
looked younger and tendered, due to pressure from Bratz Company. Consequently, adopted better
marketing strategies, so as to sustain market competitiveness and ensure that it recovered the 15%
revenue decline in the sales of the Barbie doll due to competition from the Bratz Company and
losses made during CEO Barad’s rule.
Mattel Inc. has put into consideration various factors, such as the political factors, the
economic factors, the social and the technological factors. Other factors of importance include the
legal and environmental factors. Secondly, Mattel Inc. has adopted the customized target
strategies, where the products produced, such as the Barbie doll and the American Girl doll, are
made specifically for young girls. Mattel Inc. keeps a good track of the customer needs and desires,
which is ensured via the differentiated strategy, where each group of clients has their products,
with a certain characteristic. Consequently, the 3C’s strategy has been important to Mattel Inc.
giving major importance to the customers, competitors and the corporation. Mattel Inc.
Ensurescustomer satisfaction is attained, by producing high-quality products and even the products
which meet the demand of the customers. Additionally, Mattel Inc. keeps its operations ahead of
its competitors, in all the business operations. Setting itself within the set national and international
rules and regulations, Mattel has found it easy to deal and operate with various authorities all over
the world (Thorne et al., c. 2010, 374)
For Mattel Inc. to ensure that it protects its business and marketing position, given that
there are various challenges within the market, there are various factors to put into consideration.
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Some of the factors to put into consideration include the development of a real-life marketing
strategy, where there is the application of marketing common-sense, staying ahead of the
competitor and ensuring that products produced reflect on the needs of the customers.
Additionally, another recommendation, which applies to the marketing strategy, is the adoption of
the market protection mechanisms, better product diversification, development of products which
move with time, as well as ensuring that there is the development of the products with higher
demand, such as the Barbie doll and the American girl. The company should also try to venture
into other markets, such as the African continent, where the people have not yet developed into
the internet era. Lastly, there should be intensification, diversification, integration as well as the
categorization of all products developed by the company.
To Conclude, Mattel Inc. isone of the major companies in the world that’s why it needs to
adopt various strategies to ensure it keeps itself within the guidelines of the global market.
However, the company should not forget to put into consideration the various factors which have
kept it moving. Customer satisfaction, operations within the set laws as well as the production of
high-quality products should never escape the plans of the company. However, getting new and
more clients, the company needs to venture into other markets, such as the African and the Asian
continent, where children have not been affected by the internet and ensure that it sells its products
from there. Conclusively, Mattel Inc. can also ensure that it promotes good societal relations, and
even lower the prices of its products.
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