...children’s toys and has grown since it was founded in 1932 into a global business. Its origins lie with Ole Kirk Christiansen, a carpenter from Billund (where the firm is still based) who bought a woodworking business in 1916 and made furniture for local farmers. For various reasons he shifted his production range in the 1930s to make children’s toys and in 1934 named the company ‘Lego’ from the Danish words leg and godt, meaning ‘play well’. His early products - wooden pull toys, piggy banks, cars and trucks – were reasonably successful but a key turning point for the business came in the 1940s when they began making plastic toys including a truck which could be taken apart and re-assembled. In 1949 Lego began producing a set of interlocking bricks (based on an original patent by the UK Kiddicraft company for which they bought the rights) made from cellulose acetate and using an early version of a hollow design with holes and studs. The now familiar Lego bricks appeared on the market in 1953 but were not initially very successful, partly due to poor perceptions amongst consumers and retailers of plastic toys. The key was probably the emergence of the idea of a building system based on interlocking bricks – an idea which took some time to develop and is closely linked to the son of the founder, Godtfred Kirk Christiansen. His discussions with buyers, especially in the USA, helped the idea of an architectural innovation – a product platform on which many different designs could be...
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...Spin Master Toys Case Study Final Exam IS 8100 Renu Ramnani Q1. What is the history of Spin Master toys? In April 1994, Spin Master business was founded by three university friends, Anton Rabie, Ronen Harary and Ben Varadi, who were graduated from the University of Western Ontario. These three friends decided to find out an opportunity in the corporate world and made Early Bird, and in just six months company sold 1.5 million of them, which was a great hit during that time period. Early Bird was a nylon stocking filled with sawdust and grass seed mounded into head, and after its immersion in water, the grass seed was sprouted which gave a head a crop of grass hair. In 1995, the company launched Spin Master Devil Sticks, which was made up of two hand-held sticks and was used to control the third one. This product was also a great success for the company and later on, the company was named after it, that is Spin Master Toys. By this time, the company covered the major retail segments in North America and also believed that the reason behind their success was avant-garde, grass root marketing savvy and a two tier distribution network. Also, for the following three years, the company produced products for the Canadian market with the use of very low technology and high margin toys. Spin Master never reached to the same success ratio as the Earth Buddy's sales. Later on, Spin Master mainly focused to build relationships with their retailers and investors and create research...
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...LEGO is one of top toy-making companies established in Denmark. Its core and iconic product is the LEGO brick with its own unique design, interlocking tubes, which can expand building possibilities. In 2004, LEGO started to outsource 80 percent of its production to Flextronics, a large Singaporean manufacturing service provider, but after three years, LEGO had to end this cooperation. Therefore, we are going to do a deeper analysis of this case and have a better understanding of outsourcing. LEGO had two main expectations from the collaboration with Flextronics. The first one was that LEGO intended to run a cost-saving business model by licensing out 80 percent of production to Flextronics. Before outsourcing to Flextronics, LEGO conducted its production mainly in Denmark, the United States, Switzerland and so forth, which are high-cost countries. In order to reduce production cost efficiently and response the global trend that nearly 95 percent toy production went to Asian countries quickly, LEGO chose Flextronics as its partner to accomplish the goal. From 2004 to 2006, some of production capacity in Denmark and Switzerland were moved to Flextronics’ plants in Hungary, LEGO handed over the operational control authority of Kladno site in the Czech Republic to Flextronics, and Flextronics opened a new plant in Mexico; instead, LEGO shut down the factory in the United States. Another expectation that LEGO wanted from the relationship of Flextronics was that the LEGO group would...
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...identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Richard Ivey School of Business Foundation Version: (A) 2010-11-12 PROLOGUE The last five years’ rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy-maker in the world — the LEGO Group — the importance of managing the global supply chain effectively. In order to survive the largest internal financial crisis in the company’s roughly 70 years of existence, resulting in a deficit of DKK1.8 billion in 2004, the management had, among many initiatives, decided to offshore and outsource a major chunk of LEGO’s production to Flextronics, a large Singaporean electronics manufacturing services (EMS) provider. In this pursuit of rapid cost-cutting sourcing advantages, the LEGO Group planned to license out as much as 80 per cent of its production, besides closing down major parts of the production in high-cost countries. Confident with the prospects of the new partnership, the company signed a long-term...
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...CHILDREN: MATTEL’S TOY RECALLS AND SUPPLY CHAIN MANAGEMENT We apologize to everyone affected by this recall, especially those who bought the toys in question. We realize that parents trust us with what is most precious to them—their children. And we also recognize that trust is earned. —Robert Eckert, CEO of Mattel, Inc.1 On August 2, 2007, Mattel announced a voluntary worldwide recall of 83 products in its Fisher- Price toy lines, including characters such as Dora the Explorer, and the Big Bird and Elmo characters from Sesame Street. The recall, which applied to approximately 1.5 million toys sold worldwide after May 1, 2007, was due to the use of excessive lead paint.2 Over the next month, Mattel announced six more recalls that covered toys with lead paint, as well as small magnets that could become loose and be ingested by children. In October, Mattel made yet another recall for lead paint contamination.3 All of the toys recalled had been manufactured in China. Two weeks after the August 2nd recall, the owner of the Chinese factory that had used the lead paint committed suicide. This series of recalls attracted widespread publicity, as well as political and consumer concerns that sometimes bordered on hysteria. Newspapers and television networks jumped on the story, interviewing concerned shoppers and showing toys being removed from shelves and parents bringing toys to stores for lead testing. Mattel‟s brand image took a serious beating. The toy recalls reinforced...
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...MATTEL: A Case Study | October 22 2012 | Case study discussion taken from Stanford’s Graduate School of Business “Unsafe for Children: Mattel’s Toy Recalls and Supply Chain Management” | Rob Breakiron Wenyao Ma Alek Shnayder Jiajie Wang | Contents Introduction 2 Why do companies outsource? 2 What were the primary causes of Mattel’s recall problems? Where these the result of outsourcing? 4 What actions were taken by the principals in the case to address the recall problems? Were these the right actions? Why, or why not? 5 What should Mattel do now? What should governments do? 7 How can accountability be better managed in long, global supply chains? 12 Introduction Mattel, Inc. (NASDAQ: MAT), the world’s largest toy company with over $12.5 billion in revenue, has grown from the little toy company it once was and has certainly come a long way since it was founded in 1945. The exponential world-wide growth has not always come without a hitch. In the late 2000’s Mattel was at a crossroads due to a significant toy recall problem, reaching far beyond the bottom line. During this case write up we discuss what went wrong, whose fault it was, and what can and should be done to not only fix the problem, but eliminate the chance of similar problems for Mattel and other firms in the future. Our case study will tackle the following five questions through in depth discussion: 1) Why do companies outsource? 2) What were the primary causes of Mattel’s...
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...LEGO - EMBRACING CHANGE BY COMBINING BUSINESS INTELLIGENCE WITH A FLEXIBLE INFORMATION SYSTEM History of LEGO Company The LEGO Group was founded in 1932 by Ole Kirk Kristiansen. The company has passed from father to son and is now owned by Kjeld Kirk Kristiansen, a grandchild of the founder. It has come a long way over the past almost 80 years - from a small carpenter’s workshop to a modern, to a global enterprise that is now, in terms of sales, the world’s fourth-largest manufacturer of toys. The name 'LEGO' is an abbreviation of the two Danish words "leg godt", meaning "play well". The original Lego toys started with a wooden duck. But the first LEGO automatic binding brick is their most important product. The products have undergone extensive development over the years – but the foundation remains the traditional LEGO brick. The Lego Group began in the carpentry workshop of Ole Kirk Christiansen, in Billund, Denmark in 1916. In 1961, Lego wished to expand sales to North America, but did not have the logistical capabilities to do so. Lego made an arrangement allowing Samsonite to begin producing and selling Lego products in the United States and Canada. On 7 June 1968, the first Legoland Park was opened in Billund. This theme park featured elaborate models of miniature towns built entirely from Lego bricks. The three acre (12,000 m²) park attracted 625,000 visitors in its first year alone. During the next 20 years, the park grew to more than eight times...
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...In 2007, Mattel a California based toy company shockingly recalled 19 million toys that had been manufactured in China. Mattel was founded in 1944, and has produced iconic toys such as Barbie and Hot Wheels. The company had a long established trust with their consumers that had been forged from decades of reliability. However, when the company recalled 19 million toys due to health and safety violations, consumer confusion and outrage soared. The public wanted to know how such an established company’s safety regulations could fail, how Mattel was addressing the issue, and whether consumers could trust Mattel to produce reliable toys in the future. Mattel had been a long time leader in the toy industry. Mattel and its main competitor Hasbro held control of over a third of the toy market, even in an industry with over 900 manufactures. However, there had been shifting trends in the toy industry. New electronics and video games were becoming increasingly popular among older children. Since Mattel manufactured classic toys such as dolls, the shifting trend forced the company to focus on marketing towards young children under the age of 12. While this segment responds well to Mattel’s products, they also are the most at risk of endangering themselves. The younger the children, the more likely they are to put toys in their mouth. This behavior puts children at risk of choking or ingesting harmful chemicals. Even with new adversities in the toy industry, Mattel remained a global...
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...In 2007, Mattel a California based toy company shockingly recalled 19 million toys that had been manufactured in China. Mattel was founded in 1944, and has produced iconic toys such as Barbie and Hot Wheels. The company had a long established trust with their consumers that had been forged from decades of reliability. However, when the company recalled 19 million toys due to health and safety violations, consumer confusion and outrage soared. The public wanted to know how such an established company’s safety regulations could fail, how Mattel was addressing the issue, and whether consumers could trust Mattel to produce reliable toys in the future. Mattel had been a long time leader in the toy industry. Mattel and its main competitor Hasbro held control of over a third of the toy market, even in an industry with over 900 manufactures. However, there had been shifting trends in the toy industry. New electronics and video games were becoming increasingly popular among older children. Since Mattel manufactured classic toys such as dolls, the shifting trend forced the company to focus on marketing towards young children under the age of 12. While this segment responds well to Mattel’s products, they also are the most at risk of endangering themselves. The younger the children, the more likely they are to put toys in their mouth. This behavior puts children at risk of choking or ingesting harmful chemicals. Even with new adversities in the toy industry, Mattel remained a global...
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...consumer printers are becoming available and like the original printers they are rapidly moving on from their slow, expensive and cumbersome beginnings . The Makerbot replicator 2 is an example of a 3d printer available to the consumer retailing for approx $2000. 3d printing relies on additive manufacturing which allows objects to be built layer by layer only using the exact amount of material needed reducing waste and of course allowing for more complicated designs to be printed in full form. Users can design a 3d model in computer software programs such as CAD and print off the design by inputting materials such as plastic or mouldable metal and other forms of materials that allow the object to be printed in full form. The technology has already being used to print off a replacement jaw for an 83 year old woman out of titanium powder and many believe the technology will greatly enhance medical services . Furthermore ,the technology has endless less obvious benefits such as printing off replacement parts and printing off designs that are impossible to be handcrafted but entirely possible when designed and produce on CAD or similar software. Many are predicting 3d technology to be a game changer to the entire world. Amazon is a global leader in e-commerce offering a wide range of products while focusing on customer experience. It currently employs nearly 30,000 employees . Amazon's CEO Jeff Bezos is a known advocate of 3d printing and throughout its time the company has shown...
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...part of childhood around the world. The Lego Company, a multinational corporation was founded in 1932 in Jutland, Denmark. By 2009, it became the fifth largest manufacturer of toys by sales volume. The company had a workforce of over 7000, and was selling its products in over 130 countries. The core idea behind LEGO is to develop a line of marketing toys and accessories in the form of interlocking plastic bricks. Because plastic became readily available following the Second World War, Lego purchased its first plastic injection-molding machine in 1947. The plastic version of the Lego brick was born and patented in 1958. Modern bricks we still see today are comparable with ones made in the 1950s. During the 1970’s the foundation of the company’s manufacturing facilities and research and development department were established to keep the manufacturing methods up to date. A LEGO production plant was opened in Enfield, Connecticut in the United States. This growth enabled The LEGO Group to continue expanding their product and by 2007 divide their product line into six product segments including pre-school products, creative building, play themes, licensed products, Lego NXT, and LEGO Education. Fortune Magazine and the British Association of Toy Retailers named the Lego Group Company’s iconic brick the “Toy of the Century.” It was clear that the brand name would forever be connected to their signature brick. A Changing Market The 1990s saw a huge change in Lego’s primary...
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...among others, global sourcing, to having manufacturing or service or R&D facilities world-wide, or to supplying global markets, each of which have very different ramifications: Global sourcing Global manufacturing Global distribution . dealing with foreign . facility location . local content regulations suppliers . coordinating networks . managing global . managing international of plants distribution logistics . coordinating networks . managing risk . managing risk of R&D facilities . operations in other countries Page intentionally left blank. Class: 2a Type: Lecture Supply Chain Management & Service The goal in this part is to introduce the two main sections of the course, international manufacturing and international service. For manufacturing we start with the simple proposition that decisions about our company’s competitive strategy leads to a supply chain strategy which then leads to a supply chain structure. We provide a strategic framework that can be used to analyze design, planning, and operational decisions in a supply chain. This framework focuses on supply...
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...Introduction Bob Stetzel, Vice President of Information Technology (IT) at Vermont Teddy Bear (VTB), walked a tranquil path from his car to his Shelburne, Vermont office early one morning in mid-February 2010. The landscape outside his office, and the White Mountains beyond, were blanketed in a coating of fresh snow. Just a few days before, the scene was not tranquil at all; a small army of nearly 2000 temporary employees had descended on the company’s multi-building campus to help process and pack gifts ordered by tens of thousands of customers for delivery to their sweethearts for Valentine’s Day. Bob and his seven person IT organization had worked feverishly behind the scenes, ensuring that the company’s information systems could handle the surge in orders for pajamas, custom teddy bears, flowers and other gifts, placed via telephone, mail-order, and the Web. There were a few tense moments when the system - comprising a mix of homegrown and packaged applications from a variety of vendors, and knit together with middleware - occasionally ‘paused’ when its capacity was strained. Fortunately, his team - veterans of past Valentine’s Day ‘peak experiences’ - helped patch things together and ensured that nearly all orders were processed and delivered on time. Recognizing that customer retention was an important goal, Stetzel was relieved that most customers were happy with the service they received during the Valentine’s rush. Stetzel had been hired in November 2009 - just in...
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...marks by presenting a general essay on the topic. Please note that all work should be your own. Copying or plagiarism will not be tolerated and could result in no marks being awarded. If quotes or short extracts are used they should be attributed or the source of the information identified. Play Fair The core values of Mattel, the world’s largest, branded toy manufacturer, appeared on its company website, and on its literature, under the heading ‘Play Fair’: “Act with unwavering integrity on all occasions. Treat each other with respect and dignity. Trust each other to make the right decisions. Be accountable for all that passes in front of us.” In 2007 these values would be put to the test as never before, when it was discovered that substantial numbers of Mattel branded toys had been contaminated with lead paint with global signature brands such as Barbie™ and Fisher Price™ affected. This followed hard on the heels of a much larger recall of toys containing small magnets, when it was discovered that a serious health hazard was posed to children if the magnets became loose. In fact, more than 19 million toys were to be recalled by Mattel worldwide, including a warning issued on 4th September 2007 covering 675,000...
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...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 and Annual Report (2006) 3. Toy Safety in the United States 3.1 Consumer Product Safety...
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