abhishreshthaa
Abhijeet S
Understand about the SWOT Analysis about the Mattle Inc. Mattel Inc. is one of the largest toy company based on revenue in world. This SWOT analysis is free to download and useful for MBA Projects and Report analysis.
Mattel Inc. is the world's largest toy company based on revenue.[4] The products it produces include Barbie dolls, Hot Wheels and Matchbox cars, Masters of the Universe, American Girl dolls, board games, and, in the early 1980s, video game consoles. The company's name is derived from Harold "Matt" Matson and Elliot Handler, who founded the company in 1945. Handler's wife, Ruth Handler, later became president, and is credited with establishing the Barbie product line for the company in 1959. Mattel closed its last American factory, originally part of the Fisher-Price division, in 2002. By 2007, Mattel's toys were primarily manufactured by subcontractors in Asia.[citation needed] On Friday, September 3, 2010 a mini "Flash Crash" appears to have occurred in Mattel shares which plunged 22% in pre-market trade for no apparent reason, only to recover shortly thereafter.
Strengths
One of Mattel’s most important strengths is the history that it has behind their company. Mattel turns 60 this year, with much of that time spent at the forefront of the toy industry. Staying power such as that, leads to brand recognition: in Mattel’s case, this is a positive thing. The brand remains very popular among customers.
This long history has also allowed ample time to develop effective corporate strategies. This includes an integrated focus on the customer. One of the most significant ways this is accomplished is through market research in an attempt to satisfy the market’s wants by releasing new products annually. Mattel also follows a code of ethics, as well as requiring ethical actions of their suppliers. Such a move also helps ensure the positive perception of their company continues.
Finally, Mattel contributes to the communities in which it operates, particularly to causes benefiting children. It makes it very easy for stakeholders to support a company that will reciprocate the support.
Specifically, Mattel has a handful of very recognizable brands. The largest, of course, is Barbie, which put Mattel on the map at the beginning, and currently accounts for over half of the firm’s revenue. Other products include Hot Wheels and American Girls. Further, Mattel has merged with or struck licensing deals with a number of other established brands, including Disney, Fisher Price, Nascar, and even Microsoft. In addition to diversifying Mattel’s product line, working with these successful and popular names will increase chances for success.
Mattel’s new management has helped to turn one of the company’s former weaknesses into a strength. On time delivery of products to retailers has soared in recent years from 50% to 90%, thanks to improvements in information systems and warehouse facilities. High service numbers have led to happier distributors, a huge plus when considering they are the last contact between Mattel’s product and the customer.
Finally, Mattel has been considerably successful venturing into international markets in recent years. International sales account for over one-third of Mattel’s revenue, with plans to raise that figure to 50%. There are multiple reasons for the company’s international success. First, product availability has been improved in specific market thanks to collaborative efforts with international firms, specifically Bandai Co. of Japan. Secondly, Mattel has been able to simultaneously cater products to each market’s taste, and maintain high flexibility and low costs by simplifying packaging strategies. These, along with a global marketing strategy, are helping to improve Mattel’s prospects for continued international expansion.
Weaknesses
Although there are still improvements to be made, Mattel’s weaknesses appear to be far fewer than they were just a few years ago. New leadership appears to have righted the ship, but Mattel has had a history of management struggles and uncertainty since the original co-founders, the Handlers, left the company in the 1970’s. Many of the decisions that have led to trouble can be attributed to this fact.
One frequently occurring mistake is that of unprofitable mergers and acquisitions. While some mergers, such as that with Fisher Price, have proved profitable, others have cost the company severely. Two of the largest financial disasters are the purchase of Intellivision in the late 1970’s, and the Learning Company in 1999, coincidentally both electronic firms. In fact, until the acquisition of Fisher Price, most of Mattel’s attempts to expand beyond their primary market of children’s toys were largely unsuccessful.
The most concerning piece of news for Mattel, however, must be the slipping popularity of their core product, Barbie. As of 2002, Barbie dropped out of the top five selling dolls. Mattel has been scrambling to recapture market share by expanding the Barbie line to items such as computer software and girl’s clothing.
Opportunities
The American toy market is becoming increasingly saturated and competitive, along with a downward shift in age of when children abandon tangible toys such Hot Wheels and Barbie for more interactive and technological products. This makes for little opportunity domestically for Mattel if they continue with the same product line. Fortunately, ample opportunity exists in Mattel’s new primary focus, international
markets. Barbie has become an extremely recognizable brand worldwide, and has been selling very well in the markets it has been introduced to, namely Europe and Latin America.
An alliance with an Asian company, Bandai, should also prove very beneficial as numerous eastern countries open their markets to western goods. This market has been left largely untapped, and offers a huge increase in customer base.
Another positive signal for international sales is the weakening dollar. This makes Mattel’s products more affordable in many of these new markets. Furthermore, the company does not experience the downside to a weak dollar in the form of overseas imports and production, as new corporate strategy has reemphasized in-house manufacturing.
Threats
The most notable threat in the domestic market is the systematic movement away from tangible toys, which account for a majority of Mattel’s core products, at an earlier age. Children are adopting more interactive and electronic toys earlier in age today, eroding Mattel’s primary market of children under the age of 10. This has already forced Mattel to enter, and may force Mattel to further their involvement in the technological realm, a product category in which the firm has performed very poorly.
Mattel’s attempts to follow their market into the technological realm have included the development of a number of children-friendly websites to accompany their toys. Targeting children with internet sites, however, brings about extra concerns. Mattel must be very careful to protect their legal and moral reputations by respecting the privacy of the children and their families, which is put in jeopardy every time the website asks a minor to provide information. To their credit, Mattel has worked extremely diligently to follow the guidelines of the Better Business Bureau’s Children’s Advertising Unit, and encourage parental supervision.
Other threats include those that have affected most firms in recent years, including the lackluster economy following September 11th. The national recession has led to more frugal spending, and decreasing returns by a majority of companies. Stocks in general have also been more volatile than in the late 1990’s. Mattel’s stock specifically has lacked stability for years, dropping and rising upwards of $30 per share in a matter of years. Such instability can lead to wary investors, and the firm could find itself having trouble generating funds.
Finally, the firm has experienced a recent cultural backlash; to some degree here at home, but very dramatically in some locations abroad.
Mattel Inc. is the world's largest toy company based on revenue.[4] The products it produces include Barbie dolls, Hot Wheels and Matchbox cars, Masters of the Universe, American Girl dolls, board games, and, in the early 1980s, video game consoles. The company's name is derived from Harold "Matt" Matson and Elliot Handler, who founded the company in 1945. Handler's wife, Ruth Handler, later became president, and is credited with establishing the Barbie product line for the company in 1959. Mattel closed its last American factory, originally part of the Fisher-Price division, in 2002. By 2007, Mattel's toys were primarily manufactured by subcontractors in Asia.[citation needed] On Friday, September 3, 2010 a mini "Flash Crash" appears to have occurred in Mattel shares which plunged 22% in pre-market trade for no apparent reason, only to recover shortly thereafter.
Strengths
One of Mattel’s most important strengths is the history that it has behind their company. Mattel turns 60 this year, with much of that time spent at the forefront of the toy industry. Staying power such as that, leads to brand recognition: in Mattel’s case, this is a positive thing. The brand remains very popular among customers.
This long history has also allowed ample time to develop effective corporate strategies. This includes an integrated focus on the customer. One of the most significant ways this is accomplished is through market research in an attempt to satisfy the market’s wants by releasing new products annually. Mattel also follows a code of ethics, as well as requiring ethical actions of their suppliers. Such a move also helps ensure the positive perception of their company continues.
Finally, Mattel contributes to the communities in which it operates, particularly to causes benefiting children. It makes it very easy for stakeholders to support a company that will reciprocate the support.
Specifically, Mattel has a handful of very recognizable brands. The largest, of course, is Barbie, which put Mattel on the map at the beginning, and currently accounts for over half of the firm’s revenue. Other products include Hot Wheels and American Girls. Further, Mattel has merged with or struck licensing deals with a number of other established brands, including Disney, Fisher Price, Nascar, and even Microsoft. In addition to diversifying Mattel’s product line, working with these successful and popular names will increase chances for success.
Mattel’s new management has helped to turn one of the company’s former weaknesses into a strength. On time delivery of products to retailers has soared in recent years from 50% to 90%, thanks to improvements in information systems and warehouse facilities. High service numbers have led to happier distributors, a huge plus when considering they are the last contact between Mattel’s product and the customer.
Finally, Mattel has been considerably successful venturing into international markets in recent years. International sales account for over one-third of Mattel’s revenue, with plans to raise that figure to 50%. There are multiple reasons for the company’s international success. First, product availability has been improved in specific market thanks to collaborative efforts with international firms, specifically Bandai Co. of Japan. Secondly, Mattel has been able to simultaneously cater products to each market’s taste, and maintain high flexibility and low costs by simplifying packaging strategies. These, along with a global marketing strategy, are helping to improve Mattel’s prospects for continued international expansion.
Weaknesses
Although there are still improvements to be made, Mattel’s weaknesses appear to be far fewer than they were just a few years ago. New leadership appears to have righted the ship, but Mattel has had a history of management struggles and uncertainty since the original co-founders, the Handlers, left the company in the 1970’s. Many of the decisions that have led to trouble can be attributed to this fact.
One frequently occurring mistake is that of unprofitable mergers and acquisitions. While some mergers, such as that with Fisher Price, have proved profitable, others have cost the company severely. Two of the largest financial disasters are the purchase of Intellivision in the late 1970’s, and the Learning Company in 1999, coincidentally both electronic firms. In fact, until the acquisition of Fisher Price, most of Mattel’s attempts to expand beyond their primary market of children’s toys were largely unsuccessful.
The most concerning piece of news for Mattel, however, must be the slipping popularity of their core product, Barbie. As of 2002, Barbie dropped out of the top five selling dolls. Mattel has been scrambling to recapture market share by expanding the Barbie line to items such as computer software and girl’s clothing.
Opportunities
The American toy market is becoming increasingly saturated and competitive, along with a downward shift in age of when children abandon tangible toys such Hot Wheels and Barbie for more interactive and technological products. This makes for little opportunity domestically for Mattel if they continue with the same product line. Fortunately, ample opportunity exists in Mattel’s new primary focus, international
markets. Barbie has become an extremely recognizable brand worldwide, and has been selling very well in the markets it has been introduced to, namely Europe and Latin America.
An alliance with an Asian company, Bandai, should also prove very beneficial as numerous eastern countries open their markets to western goods. This market has been left largely untapped, and offers a huge increase in customer base.
Another positive signal for international sales is the weakening dollar. This makes Mattel’s products more affordable in many of these new markets. Furthermore, the company does not experience the downside to a weak dollar in the form of overseas imports and production, as new corporate strategy has reemphasized in-house manufacturing.
Threats
The most notable threat in the domestic market is the systematic movement away from tangible toys, which account for a majority of Mattel’s core products, at an earlier age. Children are adopting more interactive and electronic toys earlier in age today, eroding Mattel’s primary market of children under the age of 10. This has already forced Mattel to enter, and may force Mattel to further their involvement in the technological realm, a product category in which the firm has performed very poorly.
Mattel’s attempts to follow their market into the technological realm have included the development of a number of children-friendly websites to accompany their toys. Targeting children with internet sites, however, brings about extra concerns. Mattel must be very careful to protect their legal and moral reputations by respecting the privacy of the children and their families, which is put in jeopardy every time the website asks a minor to provide information. To their credit, Mattel has worked extremely diligently to follow the guidelines of the Better Business Bureau’s Children’s Advertising Unit, and encourage parental supervision.
Other threats include those that have affected most firms in recent years, including the lackluster economy following September 11th. The national recession has led to more frugal spending, and decreasing returns by a majority of companies. Stocks in general have also been more volatile than in the late 1990’s. Mattel’s stock specifically has lacked stability for years, dropping and rising upwards of $30 per share in a matter of years. Such instability can lead to wary investors, and the firm could find itself having trouble generating funds.
Finally, the firm has experienced a recent cultural backlash; to some degree here at home, but very dramatically in some locations abroad.
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