Warfare in Toyland

1. What business model and strategies made Mattel the industry leader?

Mattel’s success depended on their developed strategies as chaining in toy industry. By using chaining to pursue a business model based on differentiation, the company has achieved competitive advantage and greater profitability to become the industry leader. Mattel made toy industry history with the introduction of the Barbie doll, the world’s best-selling doll. The Barbie doll was created in the 1960s when most women were homemakers; her voluptuous shape was a response to a dated view of what the “ideal” woman should look like. Mothers who played with the original dolls bought them for their daughters and granddaughters and Barbie became an American icon. We can see how Mattel select its customers: young girls or their mother; and differentiate its product: “ideal” woman should look like as their business model is. Mattel’s strategy was continually creative and they also knew how to acquire and keep their customers by creating more products from the one in the market and later enhance it. The company broadened Barbie line with the selling of Barbie clothes and accessories and her boyfriend, Ken, was introduced. Barbie and all Barbie accessories accounted for almost 50% of Mattel’s toy sales in the 1990s. All business model and strategies above made Mattel the industry leader.

2. What strategies have its rival, MGA, pursued that have threatened its competitive position?

Mattel failed to recognize the changing needs of customers in the market and invest their capital in ways that do not lead to the distinctive competencies when they were in growth stage. Bob Eckert, Mattel’s CEO, and his top managers underestimate how much the world had altered. Changing cultural view about the role of girls, women, sex, marriage, and women working in the last decades shifted the tastes of doll buyers. They did not