1. Simone Roberson
Case 22 page C141

2. Background
 Ruth and Elliot Handler and Harold Matson founded
Mattel in 1945.
 Robert Eckert- chief executive and chairman of
Mattel (2007).
 Gained its significance in the toy industry due to the
introduction of the Barbie doll.
 In 2006 Mattel became the largest toy maker with
revenue of $5.65 billion, owning brands such as:
 Barbie
 Hot Wheels
 American Girl
 Fisher-Price

3.  In 1977 the United States banned the use of lead
paint in toys due to harmful effects on child
development.
 In early July 2007 lead paint was discovered on
some Fisher-Price toys made by Mattel.
 On August 1, 2007 Mattel issued the largest toy
recall in its history.
 Two weeks later further recalls of 9.5 million more
toys in U.S. and 11 million in foreign countries.
 Some recalls were due to hazardous magnets
found in the toys.
 3rd recall was on September 4, 2007

4.  Risking the health of
children
Net Income
 Negative media
700
coverage 600
 Frustrated customers 500
400
 Declining market share 300
200 Net Income
 Flat sales on core toys
100
 Lost in net income from 0
2007 to 2008 due to:
 Less supply = Less
purchasing
 The cost of testing toys
 Lawsuits

5.  Due to the lead paint oversight in China Mattel
decided to change their production strategy.
 Over 85% of all recalls came from imported products.
 To protect the companies core brands Mattel
switched to producing their own products rather
than outsourcing to other manufacturers.
 Mattel mixed totally owned and third-party
manufacturing for its products.
 Mattel moved manufacturing out of the United
States and into other countries like
China, Indonesia, Thailand, Malaysia and Mexico
where contractors follow Mattel’s specific
guidelines.

6. S trengths W eaknesses
 Strong off-shoring and Outsourcing to a local
outsourcing strategy manufacturer would be
 Branding success i/e less costly.
Barbie Dependency on retailers
Weakening bargaining
strategies with retailers.

7. O pportunities T hreats
 Direct-mail catalog and Recalls, lawsuits and
Website to reduce the accusations hindered
company’s dependence their reputation
on retailers. Slow growth of traditional
 Created larger plants to toy market and rise in
produce toys more video game market
efficiently. Imitation Barbie dolls
 Mattel partnered with Hasbro, JAKKS Pacific or
Oasys Mobile to extend other major competitors
their market (March
2005)

8. SOURCES
 http://moneycentral.msn.com/investor/invsub/result
s/statemnt.aspx?symbol=MAT
 http://www.filination.com/blog/2009/03/27/product-
manufacturing-safety-in-china-mattel-toys-recall-
business-crisis/
 http://www.wikinvest.com/stock/Mattel_%28MAT%2
9
 http://www.yournewfragrance.com/Mattel-
s/2461.htm