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 - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
challanges to central banks by blockchain based private currencies, technology disruption, 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 -
Learning organization
- Recalls Toys is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Recalls Toys is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
High switching costs
– The high switching costs that Recalls Toys has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
Superior customer experience
– The customer experience strategy of Recalls Toys in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Recalls Toys has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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.
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.
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 -
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.
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.
Lack of clear differentiation of Recalls Toys products
– To increase the profitability and margins on the products, Recalls Toys needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Recalls Toys has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Recalls Toys 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Hau Lee, Mitchell M. Tseng, David W. Hoyt suggests that, Recalls Toys is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Low market penetration in new markets
– Outside its home market of Recalls Toys, firm in the HBR case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
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.
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.
Manufacturing automation
– Recalls Toys can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Recalls Toys can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Recalls Toys can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Recalls Toys is facing challenges because of the dominance of functional experts in the organization. Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Recalls Toys can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Recalls Toys to increase its market reach. Recalls Toys will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
Creating value in data economy
– The success of analytics program of Recalls Toys has opened avenues for new revenue streams for the organization in the industry. This can help Recalls Toys to build a more holistic ecosystem as suggested in the Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management case study. Recalls Toys can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management, Recalls Toys may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Recalls Toys can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Unsafe for Children: Mattel's Toy Recalls and Supply Chain Management .
Shortening product life cycle
– it is one of the major threat that Recalls Toys is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Recalls Toys high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Recalls Toys in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Recalls Toys
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Recalls Toys.
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.