Q1 Answer
Mattel Company operates in a conducive domestic environment regarding political, technological, legal, cultural and economic environments. Government regulations are very key for any business operations, and so are the domestic government regulations to the operations of Mattel Company. The government of U.S. regulations is very influential to the business operations of companies. The most significant domestic government regulations that affect Mattel operation in U.S. include taxation laws, environmental laws, and sale of goods Act.
For instance, Mattel Company is subject various to violations of consumer safety regulations. For instance, the Consumer Product Safety Commission fined Mattel up to a maximum of $2.3 million for breaching children safety regulations. According to the commission, the company violated the regulation by making toys with high lead content which is against the provision. The provision requires the toys to have low lead content to avoid endangering the lives of the young children who use the toys (Kavilanz, 2009).
On the other hand, the government environmental regulations are another challenge that affects the operation of Mattel in the United States of America. The environmental act requires the companies operating in such nations to ensure a clean environment for the people. This is one area where Mattel Company has suffered a big blow due to known compliance to the law. For instance, the company has been subject to various lawsuits for its failure to ensure a clean environment. Its use of high lead content in making the toys is one violation of the environment facing the company in the U.S. On the side of taxation regulations rules the company is subjected to pay tax according to the profits realized.
Q2 Answer
The sociocultural factors differ significantly in the operation of Mattel domestically and internationally. Domestically, Mattel operates in a social and cultural environment where it has a good basis. The company in America and its environment can meet the cultural needs of the company. U.S. is a multicultural region, and the company has been able to meet the need of to consumers of various cultures. It has a good understanding of the cultural background of the people of the United States thus able to meet their demands and preferences. On the other hand, socio-cultural factors of the foreign nations present various challenges to the operation of the company. Cultural practices of such nations are very complex following the norms and customs.
Globally, Mattel faces more challenges in meeting the various needs of the various cultures of the world. For instance, China is one nation which presents a cultural challenge to Mattel Company. China cultural practices are very crucial and call for foreign companies to comply with norms to succeed in its market. However, the company is ever dedicated to meeting the needs and preferences of various cultures of the world. This is an area that has assisted the nation in enhancing its success in foreign nations.
On the other hand, the global regulations adopted by various nations of the world influence to a great extend the operation Mattel Company. Many foreign nations have tight regulations that affect the operation of business in the locality. For instance, China has various legal regulations presents that lengthen the approval of companies before they venture in the nation. For instance, Mattel has violated the both consumer safety and environmental Act by manufacturing toys with high lead content. This substance is harmful to the health of the young children who use the toys. Also, European nations are very strict with environmental pollution provisions. They require companies who venture in them to ensure a clean environment. Mattel is one company which is subject to violation of environmental role (Kavilanz, 2009).
Q3 Answer
Technology remains the most important driver of business success in the world. Advancement in technology presents Mattel with challenges and opportunities that it needs to overcome and exploit respectively. Modern technology presents the company opportunity to come up with products that meet the changing needs of the consumers. Mattel has also changed its products with the rapid development of technology. For instance, the nation is currently using 3D printing technology in its products. The technology helps the consumers to print action figures and jewelry at their convenience. However, the use of smartphone presents the company with an opportunity to exploit. Many of its target consumers are nowadays using the smartphone technology which the company can use to sell and provide its toy products (Scott, 2012).
Q4 Answer
Domestically, Mattel operates in a politically stable environment with minimal civil and terrorist attacks. U.S. is a politically stable environment for Mattel’s business operations. However, there are some political barriers that offer a challenge to the businesses. For instance, the U.S. politicians have a very great impact on business operations. This is to imply that they may influence the operation of business like Mattel through licensing and imposing various provisions anytime they feel. Besides, the legal framework of the nation is very severe when it comes to environmental pollution. Severe environmental regulations present Mattel with a challenge since sometimes the company is forced to incur costs to ensure compliance with the environmental provisions (Scott, 2012).
Globally, Mattel faces various political barriers that affect its business operations negatively. For instance, China is one example of global nations where Mattel face some challenges in operating. Their legal framework in the nation is very strict for the foreign investors. There is a lengthy procedure through which a foreign investor like Mattel has to follow to venture in the nation. For instance, the nation requires foreign nations to enter into a joint venture with a company to venture in the nation. Besides, the nation’s political officers are corrupt and not transparent. This is one barrier that affects the operation of Mattel in China. Also, faced with problems based on product quality for toy manufacturers, the company once cracked down operations of toy manufacturers. The aim of the crackdown was to help the quality assurance to inspect the domestic companies that offer toys. Consequently, the nation revoked the licenses of many toy manufacturing companies. Ideally, this means that global political-legal environment presents various challenges to the operations of Mattel Company (Lyles, 2008).
Q5 Answer
Sociocultural factors affecting Mattel Company domestically and globally are almost similar although they also differ. Both domestically and globally, Mattel operate in an environment with diverse cultures. In both domestic and global operations, the company is subject to cultural practices that it must meet. Compliance is a must for both domestic and global operations. In the U.S. Mattel operations are easier to predict as compared to those of the nations. The company has been able to maneuver ways to meet the demands of the domestic consumers of its products.
Globally, the company faces various challenges due to varying cultural practices and norms of different world nations. Asia is one region where Mattel Company faces a lot of challenges in meeting the needs of the cultures of the different. Islamic culture dominates the Asian nations and is very complicated thus challenging the operation of Mattel Company. There are various symbols that must appear on the products to be accepted in those regions. The company must meet those cultural provisions for it to succeed.
Q6 Answer
Economic conditions and non-economic conditions both domestically and globally are unstable thus affecting the operation of Mattel Company. Both fiscal and monetary theories can give a clear understanding of the economic environment effects to Mattel operations. The fiscal theory focuses on bringing the understanding of effects of taxation policy on the operation of businesses. Domestically, taxation policies in the United States remain very high for the Mattel operations. As a corporate body, the company should meet the tax burden and comply with the taxation law. According to the law, the company should file true and accurate income after the end of each fiscal year to allow the tax department to charge the right amount of tax.
On the other hand, globally the Company can choose the nations whose fiscal policy is friendly so as to cut the costs involved in with taxes. Mattel globally operates in nations where the taxation levels are low compared to the home fiscal policy. An outstanding example is the European and Asian nations where the company operates. However, many global nations in which the company operates have very many tariffs that make business operations to be expensive for the company.
Furthermore, monetary policy is another theory that can be used to explain the operation of Mattel Company domestically and globally. The monetary theory focuses on interest rates and inflation rates adopted by various nations. Domestically, Mattel operates in a nation whereby the inflation and interest rates remain very low. The United States is a developed economy its inflation rates making the operations of the company remain affordable to its consumers. However, the operation is affected by the economic fluctuations that occur around the globe. Also, the United States currency is very stable about that of the other nations. This helps Mattel investment domestically to enjoy the economies of scale that arise from a strong currency.
On the other hand, the global operation of Mattel is greatly influenced by inflation and interest rates. Many nations in which the company operates are unstable as far as interest and inflation rates. For instance, some of the Asian nations in which the company operates are affected negatively by harsh economic conditions. Global economic crisis leads to increased inflation and inflation rates that lead to a price increase of the products provided by the company. As a result, it becomes expensive for the consumers to afford the products something that leads to reduced sales revenues of the company.
Q7 Answer
The analysis above clearly indicates that Mattel Company has succeeded in both domestic and global markets. However, there are various environments that affect the operation of the company negatively thus it needs improvement. From the analysis, I have understood the needs of for a business to focus on the environment if it needs to enhance good performance. For instance, I have realized that failure for a company to comply with the legal framework of nations lead to lawsuits which attract fines and penalties. Such fines and penalties are expenses to the company, and they reduce the profitability of the company.
It is recommendable for Mattel to focus on complying with the government regulations. First, the company should focus on going green as a way of enhancing compliance with environmental provisions provided by various nations of the world. There is a need for the company to reduce the lead content in its products to the required percentage. This helps to reduce fines and penalties that lower its profitability.
Also, it is recommendable for the company to adopt the changing technological advancement that meets the needs and preferences of its target consumers. The changing technology has changed the way preferences of the Mattel consumers. It is thus important for the company to adopt the changing technology so s to respond to this needs and enhance good performance for its businesses.
Finally, it is recommendable for Mattel to consider complying various business rules and regulations of the nations’ globally. It is a good way of enhancing a good relationship with those nations in which it operates. Furthermore, complying with the set business regulations will the company to stand a better chance of venturing in those nations. Still, this will prevent the company from being fined and penalized. All these recommendations will help the company to meet the social responsibility of the members of the community. Also, it is a better way of ensuring the company promotes its image and reputation which will enable it to compete strategically with other companies in the same industry.
References
Kavilanz, P. (2009, June 5). Mattel fined $2.3 million over lead in toys. CNN Money. Retreived From http://money.cnn.com/2009/06/05/news/companies/cpsc/
Lyles, M. A. (2008). Appreciating cultural differences in China: An interview with Robert A. Eckert, Chairperson of the Board and CEO of Mattel, Inc. Business Horizons, 51(6), 463- 468.
Scott, R.( 2012, September 2012). Not Just Child's Play: Mattel Seeks New Ways To Give Back. Forbes. Retrieved from http://www.forbes.com/sites/causeintegration/2012/09/27/not- just-childs-play-mattel-seeks-new-ways-to-give-back/#3509305522b2
