Case Study - Mattel

1 - Where does the source of competitive advantage lie for products such as these?
• “If you have a real competitive advantage, it means that compared with rivals, you operate
at a lower cost, command a premium price, or both.” (1)

Cost Leadership: They have reasonable and competitive prices for their products so that a
wider range of people can buy their dolls and accessories.

• Customer Oriented
They are a well-known brand and have their own special and regular customers.
Mattel has a strong marketing strategy the company has been most focused on identifying
its customers. In other words, they are customer oriented.
“They knew more about their customers than anyone else in the world”

They know their customers very well. So, what age group and gender play with the dolls,
who exactly are the buyers, are they bought them as gifts by parents, friends, and family.
Do kids’ friends also like dolls and their accessories? What is the average lifespan of dolls?
Do they break down quickly?

The company meets the needs of its customers according to the answers to the above
questions.

2 - Identify in detail the elements of strategy necessary to ensure that the product remains
viable for the next two, five and ten years.
“A company can sustain a premium price only if it offers something that is both unique and
valuable to its customers.” (1)
Mattel company needs to work on its differentiation strategy unless new competitors can enter the
market offering the same quality product at less price. So, they need to give something special to
persuade their customers why still they are the best.
Nowadays, children spend a lot of time on electronic devices, so they found hard and unattractive
to play with dolls. However, as the main customers are girls, there is still a chance to avoid such
situations and give something new to children that make them involved not only in their spare
time! For example, they could have a science Barbie that dresses like a scientist and help children
to understand math, physics, or biology. Having a website and short animation and educational
videos with Barbie is another good example of involving children much more.
They need to give a new concept that Barbie are not just a toy to play, they are present in many
aspects of their real-life too. In other words, they need to meet the demands of children as the
market and children are changing so fast. In this way, they make it difficult for new competitors
to emulate them and enter the market easily.

3 - What are the main lessons for leaders and managers in all organizations to be learned
from the experience and success of the Barbie product and the Mattel organization?
• Focus Strategy
They are a great example of “Focus Strategy” as they have identified their target customers
and know exactly what they need.

• Innovative in the Market

The company is innovative, creative and they have a clear plan for specific countries and
even different states in the USA. They are the first ones who obtaining licenses for famous
movie characters and making relevant dolls.

• Branding
“The brand logo and distinctive color scheme (a bright pink) were developed so as to be
capable of being attached to every product that came out.”
It says they made a unique logo and put it on all their products to make them more famous
and popular. That is why today almost everyone is familiar with the name of Barbie and
their products, especially their dolls, are well known. In this way, everyone is
subconsciously given the feeling that the only doll that is suitable for girls is a Barbie.
However, in recent years, many legal problems have been created for them, which is
beyond scope of our discussion here.

• Variety of Products
They are the ones who offered a whole package to their customers. Not only do they sell
dolls, but they also bring related products to the market.
“As the result, the product range now covers themed toys (castles, stables, cars, accessories
for dolls’ houses), films and video productions, cards and books, and other dolls”
Customers may buy just a doll for the first time but offering other related products keep
the customers coming back again and again to buy its accessories or other related ones.
It is also financially easier for customers to buy, for example, doll clothes than to buy a
new doll again.

Reference

1) Understanding Michael Porter, The Essential Guide to Competition and Strategy (2011,
Harvard Business Review Press)