MATTELS CHINA EXPERIENCE: A CRISIS IN TOYLAND

Mattels China Experience: A Crisis In Toyland Clients NAME Clients University

MATTELS CHINA EXPERIENCE: A CRISIS IN TOYLAND

Mattel proved to be, across time, a strong industry leader, even if it encountered certain setbacks. The case study portrays Mattel as a company with a prominent inclination for progress, clever business tactics and exemplary corporate citizenship. In order to achieve sustainable growth, Mattel exploits the potential of the global market and makes use of good marketing strategies. The global market proved to be an important resource for Mattels growth regarding sales and distribution on one hand, and suppliers and manufacturers on another hand. The companys pledge for high quality standards put customers trust at the core of its brands, thus developing a globally used marketing strategy for its products. Even if Mattel is a company with headquarters in the United States, it clearly cannot limit its sales to the North American regional market only. The case study presents Europe as holding a 28% of the global market, followed in size and promising growth rates by the Asian (25%) and the Latin American (7%) regional markets (Teagarden, 2008, p. 2). The latter encounter significant economic and population growth, which translates in business as the expansion of the target consumer base (children) and the rise in revenues of the buyers (middle-class parents). Mattel makes use of the global market by expanding its distribution channels into the above-mentioned regional markets. Robert Eckert envisioned this strategy as Mattels need to globalize into new markets. Another way to exploit the global market is by manufacturing toys offshore, thus benefiting from lower business costs in labour, suppliers, plant and equipment. The case study makes use of the term China price to describe the manufacturing price in China, which proves to be 30 to 50 percent cheaper than what it would cost a company to make the equivalent product in the US (Teagarden, 2008, p. 4). Mattel proved to be a pioneer in offshoring in order to benefit from labour and raw material arbitrage, making 65 percent of its toys in China in 2007 (Teagarden, 2008, p.

MATTELS CHINA EXPERIENCE: A CRISIS IN TOYLAND

12). However, the company doesnt entirely rely on contract manufacturers. It combines a network of company-run plants and select contract manufacturers in order to optimize the net results of the production process. Moving production to offshore locations allows the company to invest more in research& development and brand building. The clever business strategies in the global market are sustained by a very good general marketing strategy employed by Mattel: the creation and development of strong brands based on high quality standards and the valuation of customers trust. Mattel played a very important role in developing the first toy safety standards in the industry in collaboration with the American Academy of Pediatrics and the Consumer Product Safety Commission. This was clearly the first step in creating toy brands based on safety, trustworthiness and professionalism. Mattel toys became an expression of high quality standards. This image was reinforced by the introduction of the Global Manufacturing principles, which provided guidance and minimum standards in matters such as: age requirements, forced labor, workspace safety, health, living conditions and environmental protection. Mattel acquired a strong reputation in the industry as a company dedicated to product quality and safety. It also became a role model in matters such as quality and health standards. This status got successfully transmitted to the companys brands. This is why the public reacted so strongly to the recall incident presented at the end of the case study. Mattel failed to deliver one of the most important promises on which they built their brands. Thus the public, the media and the government saw it in the most negative light possible, putting a lot of pressure on Mattels decision apparatus to act fast and repair the mistake. In conclusion, the case study focuses on Mattels commitment to safety and quality as a globally used marketing strategy for the companys products. It also presents Mattels tactic to exploit global markets for sales and distribution, as well as lower costs manufacturing. Under the

MATTELS CHINA EXPERIENCE: A CRISIS IN TOYLAND

right management, Mattel proved to be a company dedicated to progress, product quality, and sustainable business approaches in terms of cost and sales strategies.

MATTELS CHINA EXPERIENCE: A CRISIS IN TOYLAND Bibliography Teagarden, M. B. (2008). Mattel's China Experience: A Crisis in Toyland.