Mattel Case Analysis

Mattel Case Analysis

Issue Identification

Due to the high number of recalls Mattel has experienced with Chinese outsourced products, it must strategize a solution to deal with this problem. Recalls not only create operational challenges and expenditures, but also damage brand image. Mattel cannot afford to keep this high number of recalls trend going as it is a firm that has grown on it’s reputation of manufacturing safe and innovative toys to the world.

Analysis

There are three alternatives Mattel can act upon in order to deal with its problem of frequent recalls occurring from Chinese outsourced products. These three options vary in aggressiveness of tackling the problem, however the more drastic the action it chooses to take the more risks the firm could encounter.

Firstly, Mattel could choose to manufacture everything in-factory rather than outsourcing its manufacturing throughout China. This would allow the firm to have better control over its products quality, consistency and safety, therefore, protecting its brand image. However, this decision would be a huge logistic and operational undertaking for Mattel, adding huge costs and possibly making it unfeasible. This possible unfeasibility would be largely because of Mattel’s toy manufacturing rotation.

Another option for Mattel would be to minimize the number of vendors it deals with and shrink the Chinese supply chain these vendors engage in while outsourcing the manufacturing. From experience, Mattel is aware that once its product is outsourced its components come from many different suppliers and although it has attempted to set a system in place, it should hold a stricter verified suppliers of components list that firms must choose from. By Mattel implementing Strictness with vendors and placing a strong focus on testing to spot unsafe products before they are distributed it will avoid recalls from happening and protect its brand image. Disadvantages to this option however would be an increase of costs when implementing greater control over its vendors, and a risk of a vendor still not complying.