1. What are Mattel's core competencies? If innovation is not one of these, should it be? Is outsourcing a competency?
Mattel’s core competencies were in their brand, and corporate responsibility. In addition, the company had a good supply networks and product integrity. The company depended on movies and television shows and the creation of new toys. This was based on the brands that were already acquired or developed. The company, for example, put electronics in Playmobil characters. In addition, the company took advantage of the offshore manufacturing and economies of scale. Innovation was not one of Mattel’s core competencies. However, innovation should be one of the core competencies for a company. This is because innovation assists in making a breakthrough in markets that are not yet exploited. The process can make a company to succeed after a short struggle. Outsourcing can be regarded as a competency as it helps a company to utilize the existing and stabilized structures to get into the markets and maximize on the sales of their products (Dee, 2007). This can make a company to make a profit as their products can be successful through the outsourcing process.
2. Do Mattel's Global Manufacturing Principles (GMPs) adequately balance the needs of their stakeholders? Do they favor one stakeholder group over another?
Mattel’s GMPs to a considerable extent balances the needs of their stakeholders. The GMPs of China makes their prices cheaper on products manufactures in the country compared to manufacturing the same products in other nations like U.S. The GMPs make companies to produce and manufacture products due to the lower business costs, cheaper raw materials, cheaper facilities, labor, plant and equipments. This results into differences in absolute labor costs in the differences of regulatory oversight between China and other countries. The GMPs, at the same time, favors one stakeholder group over another. This can be seen in the Chinese products that were exported, yet, they did not meet and comply with the Chinese law. According to Chinese officials about 50% of such products that were exported did not fulfill with the Chinese laws and this depicts the favoritism of one stakeholder over the other (Ready, 2008). China is seen to be favoring their manufactured goods to other products in regard to standards set. In addition, this can be seen in the late ban of lead by the Chinese government and an increase in inspections of exported related products. Some analysts believe the GMPs on the stakeholders are what have led to the inconceivable economic growth witnessed by China. The favor of stakeholders has seen a parallel pressure on the technical, human resource, and physical infrastructure that is witnessed by China. 3. Mattel's Global Management Practices (GMPs) are an industry standard. Are they an innovation? Why or why not? Do they serve a strategic purpose? Are they the basis for sustainable competitive advantage?
Mattel’s GMPs are an industry standard, but, are not an innovation. This is because the manufacturing in China is based on the company owned plans and a widespread network of the contractor and supplier relationships. The toys were the first consumer products that were produced by China and Mattel was the pioneer in taking the manufacture of the toys offshore. The company took advantage of the toys that were produced, in China, in the smaller second and third tier cities. In addition, the supply networks for toys and their products were already becoming increasingly complex, extensive, and at times, were under scrutinized by organizations that imported and branded the toys. This served as a strategic purpose as Mattel’s network exemplified the convolution with over 3,000 partners in China (Mah, 2007). The company moved their manufacturing overseas and this created a shift in the toy manufacturing companies. Toy companies started to shift their focus to product design, marketing, research and development, and other core business activities. This created strategic significance and; hence, became the basis for the sustainable competitive advantage. Therefore, companies take advantage of the manufacturing benefits in China as they maintain the quality of their products and obey the U.S laws for the products that are imported. Most companies produced high quality products that are difficult, high tech, and complex to produce in Chinese pants. On the other hand, companies also produce quality and safe products in China in their own plants or by contracting relationships with Chinese suppliers. 4. What were the product defects that led to Mattel's recall of products made in China? Did Mattel play it straight relative to these toy recalls? Why did Mattel blame the recalls on China? Did they play fair?
The products defects that led to Mattel’s recall of products made in China were the paint on the Sarge die cast toy car. These were produced in China, and had lead levels that were in excess of the U.S federal toy safety regulations. The products were Chinese made toy products that had features such as Sarge, Batman, Poly Pockets and a variety of Barbie accessory toys (Clark, 2007). This was due to the violation of the lead safety standards or the magnet detaching. The recall attributed to manufacturing defects was on overheating of batteries, poor craftsmanship, inappropriate raw materials, and toxic paint. The lead paint on toys is an acknowledged danger to young children that tend to chew the toys; hence, the use of the paint in the manufacturing of toys raises serious alarms. The exposure of the heavy metal also poses a risk, due to, the low levels of lead. This is dangerous, to the young children, and this can lead to lower IQ scores in children. The high level of lead can dent children’s nervous and brain systems, create behavior or hearing and learning problems, and slow growth as the growing bodies absorb more lead. The company had to recall the Sarge cars and toys that had excess levels of lead. An approach was developed to recall the products, but, at the same time, the organization tried to protect their Mattel brand and the excellent corporate reputation. This was done so as not to undermine the company’s intent of becoming the world’s premier toy brand for the contemporary and future moments. The company was manufacturing safe toys in China; however, the recall affected the customer confidence in the product made in China. Mattel blamed the recall on China as the company had been manufacturing toys in China for about 20 years and they did this fairly. The focus in China moved from the classic toy assembly to the high value added manufacturing and knowledge work. This affected the manufacturing industry and led to the recall. The global shift in toy manufacturing to China also led to an increase in the recalls of the products. The recall affected their customer base, and this is why the blame was on China. 5. How did Mattel find itself in the lead-tainted-paint-in-toys debacle? What are the factors that contributed to this crisis? Could Mattel have controlled these?
The recall of the Sarge made Mattel face a crisis. The company recalled over 967,000 Chinese made toy products (Mah, 2007). Mattel found itself in the lead tainted paint in toys debacle. This is because, China, allowed the production and sell of paints that have high levels of lead that exceeded the U.S safety levels. The same applied even in the products that are intended for children use. The heavy metal is used in improving the durability and color luster of the paint. The discrepancy, in the product safety in the contemporary global economy and outside United States, was hard to ignore. The crisis was contributed by the change in leadership. This led to stalled growth in the operation problems that were witnessed in Asia and Mexico. This was with allegations by SEC that Mattel had given misleading financial reports. The company also had little diversity in their product line. This was despite having a strong brand names and strong marketing skills. The company manufactured most of their products in their owned facilities, rather than, contracting manufacturing, which have the lowest cost course. Mattel could have controlled the crisis by following and hiding to the safety regulation laws. In addition, the company could have seen what was happening to the other products and sectors in other countries and follow the stipulated laws. The recall acted as an alarm to the company, for example, the recall and banning of food products in China was a to act as a wakeup call to Mattel. The timelines were enough to help Mattel change their strategies and follow the safety regulations. The apology over the recall of the toys made in China by Mattel was not enough. The company apologized claiming that a number of the items were faulty because of the company’s design flaws, instead of flawed manufacturing. The company went ahead to complain that they had brought to mind more lead tainted toys made in China than was justified. 6. How well did Bob Eckert manage the crisis? Is there anything he should have done differently? What would you have done differently? What would you do now?
Bob Eckert managed the crisis by cleaning up the Learning Company fiasco. In addition, he introduced a new vision for the company which focused on building a brand that were true and tries. This was by cutting costs and developing people. Eckert crafted a set of new rules by line managers so as to convey collaboration. In addition, Eckert went further to create a greater vision than collaboration, which was to make the company one Mattel. This was by creating values that created fair play for all. The objective was to improve the execution in all the business segments, extending technologies and licenses, globalizing into the new markets, catching new trends with existing and future business, and developing people to carry out the vision of the company. The vision of the remedies was to improve shareholders value through the increase of revenues, operating cost flow, and finally cash flow. The vision for cutting costs made the company identify supply net work initiatives in order to reduce manufacturing costs. This was in response to the rising cost of materials. The measures included ramping up lean manufacturing practices and optimizing distribution networks in the cost saving initiatives (Kellerman, 2004). These measures resulted into increased performance pressures on Mattel’s Chinese contractors. 7. What lessons can companies take from Mattel's crisis?
Companies can learn exciting and various lessons from Mattel’s crisis. The companies can make their products by use of a combination of a company run plants. This can focus on the most popular core products and networks of contract manufacturer of the remaining production needs. The companies can use the hybrid process to protect the brand of their core products (Torget, 2002). In addition, the companies need to use industry standard proportion instead of the company owned plants. This can help in having a lower cost method in manufacturing their products. The companies also need to have independent auditors for public auditing. Moreover, the companies have to adhere to quality and safety operating procedures.
References
Clark, A. (2007). Mattel: China Toy Scares Our Fault. London: The Guardian.
Dee, J. (2007). A Toy Maker’s Conscience. New York: The New York Times.
Kellerman, B. (2004). Bad Leadership.Boston: Harvard Business School Press 55.
Mah, B. (2007). Recalls has parents mulling toy boycotts. Virginia: Edmond Journal.
Ready, D., Conger, J. (2008). Enabling Bold Visions. Boston: Sloan Management Review, 49: 70-76.
Torget, J. (2002). Learning from Mattel. New Hampshire: Tuck School of Business, 1: 72.
