Mattel Case Analysis

Question 1

Research and update the case information as much as possible with current research, and then conduct a comprehensive SWOT analysis for Mattel.

Mattel announced this week that they are partnering with Quirky to help reimagine their current portfolio of products to increase growth and market share that has been lost over the past few years (Mattel and Quirky Partner to Help Reimagine Play, 2015) Mattel also announced that they will be partnering with Google to reimagine the View-Master Toy (Mattel Collaborates with Google to Reimagine the Iconic View-Master Toy, 2015) This will be available in fall of 2015 and Google will provide their images of unique destinations to be viewed in a full 360 degrees. In 2014 Mattel sales decreased 6% and the US sales decreased 5% (Mattel Reports Fourth Quarter and Full Year 2014 Financial Results, 2015). Currently, over half of Mattel’s revenue comes from global operations outside the U.S., which will continue to present the greatest increase in the international markets. In the United States, Mattel operates 7 retail stores and have plans to open more in Florida, North Carolina, and Tennessee.

Mattel’s main strength is their core brands such as, Barbie, Hot Wheels, American Girl, Thomas & Friends and Fisher-Price, to become the largest toy company in the world (O.C. Ferrell, 2012). Because of the high acceptance of theses brands, Mattel has been able to maintain a competitive advantage in new and existing markets. Profitable licensing agreements and partnerships provide additional revenue sources. These partnerships allows Mattel to capitalize on the trademarks, characters, or inventions of the licensor in products Mattel sells as well as build strong relationships and increase revenue. Mattel’s guiding principle has allowed the company to understand business opportunities worldwide and develop products that shows the diversity of the various cultures. This allows the company to target different customers segments as well as diversify its business operation risk to a number of sales channels across different countries.

One of the main weaknesses is the frequent product recalls. Mattel has recalls due to quality or safety issues. The company’s image and the consumer’s confidence in the products could be adversely affected if the frequency of the recalls continues. Another weakness is that a majority of Mattel’s revenue comes from 3 of its customers Wal-Mart, Toy ‘R’ Us and Target. By having a high dependency on these companies, Mattel could face a decrease in its bargaining power if any one of the companies decided to lower the quantities purchased. They also have a weak market share of the Chinese market, the largest growing market in the world.

Mattel has opportunities in improving its operating efficiency and profitability globally. Mattel has implemented some changes that have reduced