... 2014 Case Study 5: Mattel & Consumer Protection In 2007, Mattel, a global leader in the design, manufacture, and marketing of toys, issued a voluntary recall of 1.5 million Chinese-made toys. A majority of as a result of such carelessness, children’s health and safety were at great risk due to poor toy design, such as loose magnets, and substituting lead free paint for a fatal amount of lead paint on Mattel’s toys to cut corners and save money. As consumers we are naive to believe that boards of directors and higher management in manufacturing companies are highly concerned with our safety. In reality, Mattel has a serious lack of crisis management as well as failing to meet proper safety procedures violating consumers right to safety. As a result millions of children are in harm’s way and are susceptible to life-altering health risks. Having a lack of regulation on imported toys has resulted in high levels of lead paint and loose magnets. Government regulation or a lack of government regulation has also caused many companies aside from Mattel to cut corners and look more at the bottom line as opposed to the safety of consumers. According to Lawrence and Weber, stakeholder theory “argues that corporations serve a broad public purpose; to create value for society”. It can be assumed Mattel was acting unethically with regards to producing unsafe products for their consumers; as a result, devaluing our society in terms of safety. Within the Mattel case the primary stakeholders...
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...Mattel Cynthia D. Marshall BUS 250 Armando Nunez April 16, 2012 Mattel Mattel started its business in 1945 and company was incorporated in 1947. Company became publicly held in 1960. In 2007, with turnover of $5.6 billion and net profit of $592 million, Mattel was global leader in design, manufacturing and marketing of toys. At that time, Mattel employed more than 30,000 employees and company was selling products in more than 150 countries. Mattel’s portfolio of toys include some of the best selling and most popular toys such as Barbie, Hot Wheels, Matchbox, Radica, American Girl etc. Mattel was always considered as a responsible company. Mattel earned high reputation in the minds of consumers. Mattel was recognized by Forbes magazine as one of the 100 most trustworthy U.S. companies. Mattel was recognized as one of the 100 Best Corporate Citizens by CRO magazine. Mattel outsourced major portion of manufacturing to low cost production countries. In 2007, near 65% of Mattel’s toys were manufactured in China. Company also had factories in Hong Kong, Indonesia, Malaysia, Philippines and Singapore. Near 50% of the revenue of Mattel came from the toys manufactured outside USA. In addition to producing toys in its own factories, Mattel contracted production to 30-50 Chinese companies. Many of these companies in turn subcontracted the production/part of production to other subcontractors. In 1997, Mattel developed a detailed code of conduct - “Global Manufacturing Principles”. These...
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... Overall Situation: As the world’s largest toy company, Mattel is a seasoned veteran within the industry. It is well known for brands like Barbie, Fisher Price, American Girl, and Hot Wheels and, moreover, new product lines like Max Steel and Monster High have quickly found success. Despite its command of the toy industry, Mattel faces competition from companies like Hasbro, JAKKS Pacific, and LEGO. Nonetheless, Mattel is poised for continued growth through expansion and investment into developing markets like Latin America, Russia, China, and India and, further, through its acquisition of smaller, more specialized companies. Mattel must better monitor its product quality and brand image in these developing markets and, moreover, strive to better deliver on its vision and promise of creating the future of play. Issues: • Vision: Mattel has a strong vision, “creating the future of play” and despite successful toys, does not necessarily deliver on the “future” element of that vision. • Technology: Mattel has its “toys and dolls” tradition but needs to successfully integrate technology moving forward; this is an extension of the above issue. Fig., 2. • Competition: As with most consumer goods, shoppers are looking for the next “it” thing. Thus, Mattel will continue to face tough competition from rivals and new entrants. Fig., 10. • Economy: As with any economic downturn, sales have struggled. Figs., 5, 9. • Image: In 2007, Mattel recalled more than 18 million products, notably in developing...
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...About Mattel Mattel, “the world’s premiere toy company,” began in Southern California in a garage workshop that manufactured picture frames. When the company started selling dollhouse furniture made from picture frame scraps, they realized the market potential and decided switch to toy manufacturing. In 1959, Mattel created their most popular toy, the Barbie doll. Inspired by paper dolls, Barbie was a three dimensional doll with which “little girls could play out their dreams.” Throughout the decades Mattel has continued to create and market popular toys, (Hot Wheels and He-man) merge with successful manufacturers, (Fisher Price and Tyco) partner with children’s program companies, (Disney, Sesame Street, and Nickelodeon) obtain licenses and rights to manufacture popular lines (Cabbage Patch Dolls and Harry Potter merchandise) and acquire other companies (Pleasant Company). Since its conception, the Mattel Company has done a lot to make sure it is considered a trustworthy company for children and the community. The corporation established a children’s charity, called the Mattel Children’s Foundation. In 1997 the company created the Global Manufacturing Principles, making them the first company to create a framework to ensure manufacturing would be conducted through consistent standards on a global level. In 1998 they started a $25 million multi-year donation to the UCLA children’s hospital, which is now called the Mattel Children’s Hospital at UCLA. However, Mattel has not...
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...Jasmine Hall Mattel 1. Yes, Manufacturers of children’s products have a special obligation to not mislead consumers and society. One responsibility to the society that Mattel is performing is their commitment to protecting the privacy of their online customers when visiting their website or purchasing a product online. By assuring parents that their children’s privacy will be respected, Mattel demonstrates that that is takes its responsibility of marketing to children very seriously. They are also responsible for product safety, quality, protecting the environment, customs, evaluation and monitoring and compliance. Mattel’s business partners must have high standards for product safety and quality, adhering to practices that met Mattel’s safety and quality standards, which have been seriously violated in the past. Also, because of the global nature of Mattel’s business and its history of leadership in this area, the company insists that business partners strictly adhere to local and international customs laws. Partners must comply with all import and export regulations. The company also seeks to maintain an independent monitoring system that provides checks and balances to help ensure that standards are met. If certain aspects of Mattel’s manufacturing principles are not met, Mattel will try to work with contractors to help them fix their problems. New partners will not be hired unless they meet Mattel’s standards. If corrective action is advised but not taken, Mattel will terminate...
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...Mattel Case Study Mattel Case Study Travis Horbulyk 100119910 February 9th, 2012 Problems: * Decrease in market share * Damage to their brand image Issues: * Unable to keep up with changing technology * Children not playing with toys as much as they use to * Battered reputation due to the safety of their toys SWOT Analysis: * Strengths * Brand Name * Strong customer base * Excellent variety of products for both boys and girls * Mattel has been in the fore front of the toy industry for 6o years * Strong online privacy policy * Controls fate of Barbie’s main competitor, Bratz. * Has excellent Global Manufacturing Principles * Weaknesses * Battered brand image over recent series of recalls * Losing control of their products and company image due to the outsourcing of their manufacturing to third party overseas manufacturers * They have little pricing power due to heavy reliance on Wal-Mart and Target * Keeping children’s interest when they are growing into the tween demographic. * Opportunities * Online and Video Game Market * Barbie retail store * Social Media * Create new alliances with other companies to help market products * Changing focus from traditional toys (Barbies/Hot Wheels) to electronic toys * Moving production from china back to the United States or a more sustainable country * Threats ...
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...Eckhart, CEO of Mattel (US), had a problem Mattel had discovered on July 30 that a number of its toys manufactured in China contained lead paint The following month had seen a series of recalls, rising political tensions between the United States and Chinese governments, and a suicide But no company had been in China longer than Mattel; the original Barbie had been created there in 1959 Mattel had a depth of experience and a longevity of relationships which should have prevented it. In the end it was those relationships and that longevity which may have contributed to the product safety failures. Global Supply Chains and Risk Toys were based on a global supply chain which was highly sensitive to petrochemical (plastics) and labor input costs, environmental and human rights sensitivities to socially responsible and sustainable business practices, transportation and logistic disruptions, border crossings, cost and time to market – all of which added to risk. Mattel had established its Global Manufacturing Principles in 1997, in which it established principles and practices for all companies and sites which manufactured Mattel products, either company owned or licensed manufacturing • First Chinese Signal – The crisis had actually begun in June when U.S. toy maker RC2 recalled 1.5 million Thomas the Tank Engine products made in Guangdong, the Chinese province adjacent to Hong Kong and long the center for contract manufacturing by Western firms. • Mattel followed with a...
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...Mattel Toys. Just the thought of those two words brings to mind fun, a trusted brand, and children playing happily. Right? Maybe not. In 2007 there was a massive recall of toys, eighty-percent of which were made in China and coated in leaded paint (Lawrence/Weber). These were toys for little children. Little children usually put toys in their mouths, the toys get slobbered on, the leaded paint chips, little children obviously eat the paint chips and little children get become very ill. While Mattel had policies in place, it did not meet its ethical responsibility to its stakeholders and customers. Mattel has an ethical and corporate responsibility to manufacture a product that is safe for children, to take responsibility when their products are found to be unsafe and to follow government and company regulations to ensure safety. Mattel was believed to be one of the most trusted toy companies around the world that operated in 155 countries. They produced some of the most famous toys for children, such as Barbie, Cabbage Patch Kids, Fisher-Price, and many, many other amazing toys. Beyond concerns about marketing to children, Mattel, Inc. was making a serious commitment to business ethics. For example, Mattel started a code of conduct called "Global Manufacturing Principles” (Mattel.com). These philosophies required all business partners to commit to ethical standards that relate to safety, wages, and adherence to local laws However, recently Mattel was involved in a product...
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...Elizabeth Harris MGMT 430 Week 8 Assignment 2 Mattel designs, manufactures, and markets a broad variety of toy products worldwide through sales to its customers and directly to consumers. Mattel’s business is dependant in great part on its ability each year to redesign restyle, and extend existing core products and product lines, to design and develop innovative new products and product lines, and successfully market those products and product lines. Mattel plans to continue to focus on its portfolio of traditional brands that have historically had worldwide appeal, to create new brands utilizing its knowledge of children’s play patterns and to target customers and consumer preferences around the world. The objective of Mattel is to continue to create long-term stockholder values by generating strong cash flow and deploying it in a disciplined and opportunistic manner which is outlined in Mattel’s capital a investment framework. To achieve this objective, management has established these three overarching goals. The first goal is to grow core brands by continuing to develop popular toys that are innovative and responsive to current play patterns and other trends. Additionally, Mattel plans to pursue additional licensing arrangements and strategic partnerships to extend its portfolio of brands into areas outside of traditional toys. The second goal is to improve execution in areas including manufacturing, distribution, and selling. Mattel continues to focus on improving the efficiency...
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...The 2007 Mattel Toy Recall RESEARCH About Mattel Mattel, “the world’s premiere toy company,” began in Southern California in a garage workshop that manufactured picture frames. When the company started selling dollhouse furniture made from picture frame scraps, they realized the market potential and decided switch to toy manufacturing. In 1959, Mattel created their most popular toy, the Barbie doll. Inspired by paper dolls, Barbie was a three dimensional doll with which “little girls could play out their dreams.” Throughout the decades Mattel has continued to create and market popular toys, (Hot Wheels and He-man) merge with successful manufacturers, (Fisher Price and Tyco) partner with children’s program companies, (Disney, Sesame Street, and Nickelodeon) obtain licenses and rights to manufacture popular lines (Cabbage Patch Dolls and Harry Potter merchandise) and acquire other companies (Pleasant Company). Since its conception, the Mattel Company has done a lot to make sure it is considered a trustworthy company for children and the community. The corporation established a children’s charity, called the Mattel Children’s Foundation. In 1997 the company created the Global Manufacturing Principles, making them the first company to create a framework to ensure manufacturing would be conducted through consistent standards on a global level. In 1998 they started a $25 million multi-year donation to the UCLA children’s hospital, which is now called the Mattel Children’s...
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...surrounding Mattel Inc., one of the world’s largest toy companies, is their mismanagement of international subcontractors and vendors and the production of certain toys (the manufacturing process), as well as their inability to adapt their marketing strategy or product to the constantly changing “demographic and socioeconomic trends” (Ferrell, et. all 466). This is supported by Mattel’s legal battle with Carter Bryant and MGA, their forced recall of certain toys that were manufactured overseas, and the increasing rate at which traditional toys are becoming less appealing to today’s young audience. Essentially, Mattel’s mismanagement and oversight lead to violations in terms of ethical and social responsibilities and safety standards. Issues Relevant to the Problem: Mattel’s problem of mismanagement can be divided into several issues that need to be considered: legal issues, international supply chain issues, and an increase in technology-based toys. In regards to legal issues, Mattel has been involved in prolonged litigation with Carter Bryant and MGA over a breach of an employment contract and copyright infringement. Due to Mattel’s poor management of its overseas manufacturers, in which unauthorized subcontractors and third-party suppliers were hired and unsafe materials used, several toy products were recalled. Advances in technology and changes in socioeconomic and demographic trends have created marketing, privacy, and product development issues for Mattel. Analysis...
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...following questions: * What unethical research behavior was involved? * Who were the injured parties? * How has the unethical behavior affected the organization, the individual, and society? * How could the unethical behavior be avoided or resolved? Mattel Inc. was founded in 1945 by Harold “Matt” Matson and Elliot handler and is one of todays leading American toy manufacturing companies. The company is most recognized for its all American girl doll, Barbie. The Barbie line skyrocket sales and made Mattel not only a household name but also a global one. Al though their journey to the top was not as glamorous as Barbie’s life. Crisis at Mattel occurred on December 17, 1996 when NBCs new program Dateline aired an investigative report about the company. The exploited the company’s Indonesian factory for underage workers, long workdays, and excessive overtime. Global manufacturing had become a common practice for global chains, like Mattel, and as it increased so did the concern for worker exploitation. Economies were poverty, abundant labor, and still a high demand for jobs provided opportunities to shift production from high wage countries to low wage countries. Although, Mattel disputed some of the findings in the investigative report, but also realized...
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...Mattel and Toy Safety BUS250 Corporate and Social Responsibility Mattel and Toy Safety In 2007 the Mattel Corporation had to recall several of their toys due to the presence of lead within the paint and magnet problems with the products it had distributed. Mattel was accountable for distributing numerous toys from their Chinese manufactures. This was one of the largest recalls in American history. The Mattel Corporation started in 1945. In 1960 it became a publically traded company. Mattel, one of the leading toy companies in the world employs around thirty thousand workers. They sell products in more than one hundred fifty countries. Mattel has many toys like Barbie, and Hot Wheels. Even with the issues that occurred with the toy recall, Mattel has always thought about as a highly accountable company. They have attained a high name with most of the shoppers of their merchandise. Mattel has even been recognized by Forbes magazine as one of the most trustworthy U.S. firms. This shows what a responsible company Mattel has been and the respect that they have received from their shoppers. Even though Mattel took many steps ensure the safety and quality of toys produced by their manufactures, there were flaws in their system that allowed less than desired products to reach consumers. This led to one of the largest recalls in American history. The recalls involved around twenty one million toys. It had been found out that almost all of those toys that were...
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...The Mattel and the Toy Recalls integrative case poses six questions (four from the case and two from the professor) which will be addressed in this analysis. 1. What went wrong with Mattel’s recall strategy? The strategy used by Mattel in the toy recall was focused on passing the blame to China’s work practices and materials used. Mattel prematurely placed disproportionate blame on Chinese manufacturers and appeared defensive and somewhat fearful. In addition, the toy manufacture delayed reporting to the CPSC by a month and a half after they found out that the toys contained lead paint, even though the CPSC guidelines state that a re-call should be issued in 24 hours. 2. Who are Mattel’s stakeholders, who did Mattel cater to in the recall? Mattel’s stakeholders are the parents buying the toys, the retailers, the employees, the shareholders, management, China, business partners, CPSC, the government and third party contractors. The recall catered to the shareholders thus putting the bottom line ahead of the customer safety. 3. What values did Mattel exhibit during the recall? How did it affect Mattel? By waiting over a month to make a potential toy hazard public, Mattel evaded the truth. Even though a little late, Mattel did work with the CPSC to launch an external media blitz to alert the customers. Also the CEO of the company Robert Eckert apologized to parents in a video posted on website and expressed Mattel's emphasis on family when he spoke to parents from his perspective...
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...Mattel Recalls 2007 Communication Implications for Quality Control, Outsourcing, and Consumer Relations [ABSTRACT] In August 2007, America's largest toy manufacturer announced the first of what would become five recalls involving 21 million toys—most of which were manufactured in China. This case study and teaching note examine a corporate response to a global crisis and consider the unique communications challenges facing a corporation that operates in an international, crosscultural arena. The teaching note critiques the response’s suitability to the level and impact of the crisis and recommends alternatives. It illustrates that communicators should be cognizant of their international stakeholders and should proactively manage global issues of public concern such as outsourcing and product safety. An example would be that to avert future recalls, Mattel should work closely with its Chinese suppliers and government agencies to implement realistic quality control solutions for which it can be held accountable. The company must reassure stakeholders that outsourcing to China does not mean sacrificing quality. Regaining consumer confidence and controlling the dissemination of product safety information requires strong corporate communicators who can delicately and deliberately balance complex relationships. Table of Contents I. Case Study 1. Overview 2. Company History 2.1 Beginnings 2.2 Reorganization as Mattel, Inc. 2.3 Products 2.4 Accolades for Ethics 2.5 Financial Performance...
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