Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management
In August and September 2007, Mattel made a series of product recalls, totaling more than 20 million toys. The recalls were for excessive lead and for magnets that could become loose. All of the recalled toys had been made in China. The Mattel recalls followed on the heels of a number of high profile safety problems with Chinese imports, including contaminated pet food and toothpaste, defective tires, and lead-painted toys. The recalls sparked intense criticism of Mattel and its Chinese supply chain, despite the fact that more than 85 percent of the recalled toys were due to design problems (magnets), not the result of improper manufacturing (use of lead paint). The case provides a basis for discussion of outsourcing and supply chain management. The basic toy manufacturing process is fairly simple, providing a forum for discussing these issues without the complication of advanced manufacturing technology or an involved supply chain. In this case, supply chain defects, such as the use of lead paint by vendors, can have severe consequences. The supply chain must be designed to prevent these defects. The case enables discussion of why companies outsource, managing a supply chain, and the appropriate use of inspection and testing. It also provides the opportunity to examine response to a crisis situation, and the relationship between a company and government.
Authors :: Hau Lee, Mitchell M. Tseng, David W. Hoyt
Swot Analysis of "Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management" written by Hau Lee, Mitchell M. Tseng, David W. Hoyt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Recalls Toys facing as an external strategic factors. Some of the topics covered in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management case study are - Strategic Management Strategies, International business, Manufacturing, Organizational culture, Product development, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing commodity prices, technology disruption, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Recalls Toys, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Recalls Toys operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management can be done for the following purposes –
1. Strategic planning using facts provided in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management case study
2. Improving business portfolio management of Recalls Toys
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Recalls Toys
Strengths Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Recalls Toys in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management Harvard Business Review case study are -
Strong track record of project management
– Recalls Toys is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Recalls Toys are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Global Business industry
– Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management firm has clearly differentiated products in the market place. This has enabled Recalls Toys to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Recalls Toys to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Recalls Toys is present in almost all the verticals within the industry. This has provided firm in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Recalls Toys has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Recalls Toys has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Recalls Toys has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Recalls Toys has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Recalls Toys is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Hau Lee, Mitchell M. Tseng, David W. Hoyt can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Recalls Toys is one of the most innovative firm in sector. Manager in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Recalls Toys has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Recalls Toys to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Recalls Toys in the sector have low bargaining power. Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Recalls Toys to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management are -
Slow decision making process
– As mentioned earlier in the report, Recalls Toys has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Recalls Toys even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management can leverage the sales team experience to cultivate customer relationships as Recalls Toys is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management, in the dynamic environment Recalls Toys has struggled to respond to the nimble upstart competition. Recalls Toys has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management, is just above the industry average. Recalls Toys needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Recalls Toys needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Recalls Toys is dominated by functional specialists. It is not different from other players in the Global Business segment. Recalls Toys needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Recalls Toys to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Recalls Toys has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Recalls Toys supply chain. Even after few cautionary changes mentioned in the HBR case study - Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Recalls Toys vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Recalls Toys is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management, it seems that the employees of Recalls Toys don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Recalls Toys has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Recalls Toys can use these opportunities to build new business models that can help the communities that Recalls Toys operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Recalls Toys in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Recalls Toys can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Recalls Toys can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Learning at scale
– Online learning technologies has now opened space for Recalls Toys to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Recalls Toys can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Recalls Toys in the consumer business. Now Recalls Toys can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Recalls Toys can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Recalls Toys has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Recalls Toys to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Recalls Toys has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Recalls Toys can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Recalls Toys to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Recalls Toys to hire the very best people irrespective of their geographical location.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Recalls Toys to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management are -
Technology acceleration in Forth Industrial Revolution
– Recalls Toys has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Recalls Toys needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Recalls Toys can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Recalls Toys business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Recalls Toys can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Recalls Toys will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Recalls Toys needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Recalls Toys needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Environmental challenges
– Recalls Toys needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Recalls Toys can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Recalls Toys.
Consumer confidence and its impact on Recalls Toys demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Recalls Toys in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Recalls Toys with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Recalls Toys needs to make to build a sustainable competitive advantage.
