Case Study Description of Mattel: Crisis Management or Management Crisis
In late 2006 and early 2007 a number of imports from China, including toys, were found to pose health risks. With safety concerns about Chinese imports on the minds of readers, on July 26, 2007 the New York Times carried a feature article on the precautions Mattel, the world's largest toymaker, took to ensure the safety of its toys. In contrast to other toymakers, Mattel owned the factories in China where its most popular toys, such as Barbie dolls and Hot Wheels cars, were made. Mattel's precautions, however, were not sufficient to shield it from health hazards in the toys it made in China. This case follows a number of product safety snafus, mainly around high lead levels, that Mattel faced from its various suppliers in China. In each situation, Mattel must weigh legal, ethical, and business considerations in determining how to best react.
Swot Analysis of "Mattel: Crisis Management or Management Crisis" written by David P. Baron includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mattel Toys facing as an external strategic factors. Some of the topics covered in Mattel: Crisis Management or Management Crisis case study are - Strategic Management Strategies, Globalization, Product development and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Mattel: Crisis Management or Management Crisis casestudy better are - – supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing commodity prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Mattel: Crisis Management or Management Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mattel: Crisis Management or Management Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mattel Toys, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mattel 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 Mattel: Crisis Management or Management Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Mattel: Crisis Management or Management Crisis case study
2. Improving business portfolio management of Mattel Toys
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mattel Toys
Strengths Mattel: Crisis Management or Management Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mattel Toys in Mattel: Crisis Management or Management Crisis Harvard Business Review case study are -
Organizational Resilience of Mattel Toys
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mattel Toys does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Mattel 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 Mattel: Crisis Management or Management Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Mattel Toys digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mattel Toys has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Mattel Toys is present in almost all the verticals within the industry. This has provided firm in Mattel: Crisis Management or Management Crisis 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.
Innovation driven organization
– Mattel Toys is one of the most innovative firm in sector. Manager in Mattel: Crisis Management or Management Crisis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Mattel 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.
Successful track record of launching new products
– Mattel Toys has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mattel 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.
Ability to lead change in Leadership & Managing People field
– Mattel Toys is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mattel Toys in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Mattel 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 Mattel Toys is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mattel: Crisis Management or Management Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Mattel 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.
Superior customer experience
– The customer experience strategy of Mattel Toys in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Mattel Toys has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mattel Toys to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Mattel: Crisis Management or Management Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mattel: Crisis Management or Management Crisis are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mattel: Crisis Management or Management Crisis HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Mattel Toys has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Mattel 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.
Aligning sales with marketing
– It come across in the case study Mattel: Crisis Management or Management Crisis 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 Mattel: Crisis Management or Management Crisis can leverage the sales team experience to cultivate customer relationships as Mattel Toys is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Mattel: Crisis Management or Management Crisis, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, David P. Baron suggests that, Mattel 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mattel Toys is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mattel: Crisis Management or Management Crisis can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Mattel 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. Mattel 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Mattel: Crisis Management or Management Crisis 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 Mattel Toys 's lucrative customers.
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 Mattel Toys supply chain. Even after few cautionary changes mentioned in the HBR case study - Mattel: Crisis Management or Management Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mattel Toys vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Mattel Toys is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Mattel Toys needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mattel Toys to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Mattel Toys has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Mattel: Crisis Management or Management Crisis | 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 Mattel: Crisis Management or Management Crisis 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 Mattel 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.
Loyalty marketing
– Mattel 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.
Learning at scale
– Online learning technologies has now opened space for Mattel 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mattel 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. Mattel 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mattel Toys can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Mattel Toys has opened avenues for new revenue streams for the organization in the industry. This can help Mattel Toys to build a more holistic ecosystem as suggested in the Mattel: Crisis Management or Management Crisis case study. Mattel Toys can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Mattel Toys can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Mattel Toys can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
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 Mattel Toys in the consumer business. Now Mattel Toys can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Mattel Toys can develop new processes and procedures in Leadership & Managing People 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.
Using analytics as competitive advantage
– Mattel 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 Mattel: Crisis Management or Management Crisis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mattel Toys to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mattel Toys is facing challenges because of the dominance of functional experts in the organization. Mattel: Crisis Management or Management Crisis 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.
Buying journey improvements
– Mattel Toys can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mattel: Crisis Management or Management Crisis 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.
Threats Mattel: Crisis Management or Management Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mattel: Crisis Management or Management Crisis are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mattel: Crisis Management or Management Crisis, Mattel 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 Leadership & Managing People .
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.
High dependence on third party suppliers
– Mattel 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.
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. Mattel Toys needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Mattel Toys in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Mattel Toys is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Mattel Toys business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Mattel 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mattel 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 Mattel: Crisis Management or Management Crisis .
Increasing wage structure of Mattel 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 Mattel Toys.
Stagnating economy with rate increase
– Mattel 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.
Environmental challenges
– Mattel 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. Mattel Toys can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of Mattel: Crisis Management or Management Crisis 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 Mattel: Crisis Management or Management Crisis 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 Mattel: Crisis Management or Management Crisis 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 Mattel: Crisis Management or Management Crisis 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 Mattel: Crisis Management or Management Crisis 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 Mattel Toys needs to make to build a sustainable competitive advantage.
