Taking A Look At Mattel

Mattel was founded in 1945 by the Handlers and has over 70 years of experience of making toys. The company went public and traded on the New York Stock Exchange in 1963. From 1950 to 1969, the company’s sales skyrocketed from $5 million to $100 million in 1965 due to several successes with hit toys. In 1959, Mattel introduced the famed doll Barbie to the market, earning the national spotlight in the toy industry for many years to come. In 1974, after the founders left the company to pursue other interests, Mattel almost went bankrupt when it sold video games in the 1980s. Chairman John W. Amerman came onboard in 1987 to revitalize the company by focusing on core brands and year-end sales reached billions. Looking for ways to diversify, Mattel

The toy company moved to operations to China due to low labor cost, but lack of oversight and safety issues caught on with the company reputation, resulting in 19 million of toys being recalled worldwide (Walsh). Ever since then, Mattel’s revenue has declined consistently over the years due to decreased consumer confidence and technological changes. In 2014, Mattel’s toy brands sale all fell from the previous year. “Barbie toys sale fell 16% last year; Fisher-Price Brands fell 11% in the fourth-quarter and down 13% for the year; American Girl brand saw sales drop 4% in the fourth-quarter, and 2% for the year.” Barbie-branded toys fell (Whitehouse). As the statistics have shown, Mattel needs to revitalize itself and become relevant once again in the toy industry. How can they do that? Let’s look at the SWOT

Mattel’s emphasis on social responsibility has brought on a good name for the company. This is especially valuable for corporate these days as consumers are more likely to buy from a company that engages philanthropic activities. Mattel’s weakness in the internal environment is lack of oversight and regulation in overseas manufactures. Mattel is over diversified with all of the companies that it has purchased. Revenue is low in recently years and this makes it difficult for Mattel to focus on any one particular brand to be successful. Mattel’s opportunity in the external environment is that the company has a good reputation when it responded promptly after every crisis with their products. Mattel has acquired Mega Brands in late 2014, which could be used to compete with Lego toys. Mattel’s threat in the external environment is lack of media and consumer confidence after the lead incident. Lego and Hasbro are both doing very well on sales this year.

After the SWOT analysis, Mattel has three options to choose from. One, Mattel needs to send in inspectors to manufactures in the developed country to bring up product standard and continue to apologize to consumers for past wrong doings. Two, Mattel should stop producing toys in China and other developing countries altogether to improve consumer confidence and avoid bad products in the future. Three, Mattel should consolidate