Market Entry Strategies Case Study

Mattel in China: 'The Outsourcing and the Recall'

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Abstract:
Mattel Inc, USA is the world’s biggest toy maker and is ranked 406th in the Fortune 500 in 2007. Some of the renowned brands like Barbie, Hot Wheels, Matchbox and Fisher-Price are from the house of Mattel. Mattel used outsourcing as a major tool in its value chain management with China becoming a favoured destination. However, on August 14th 2007, Mattel recalled nearly 4, 36,000 toys that were manufactured in China. This was the second major recall by Mattel of its toys that contained impermissible levels of lead. Mattel recalled 20 million toys manufactured in China twice in a span of two weeks. Mattel was criticized for not having tight quality control procedures in its supply chain of subcontractors. Although Mattel was known for having in place a sophisticated inspection and testing system at many of its factories in China, it could not avoid a quality scam. Mattel undertook many measures to undo the damage and it remained to be seen if it could regain the trust of its consumers. The case details Mattel’s recall of its toys and the impact of the same on its brand image.

Pedagogical Objectives:

• To understand the concept of outsourcing and its rationale
• To analyse the importance of outsourcing in value chain management
• To analyse the significance of quality maintenance and supervision during outsourcing.

Keywords : Mattel; Barbie; Fisher-Price; Outsourcing; Value Chain Management; Toy industry; Crisis management; Market Entry Strategies; Case Studies; Production capabilities

Contents : 
Mattel Inc and its Business Model
Mattel into Controversy
List of Toys recalled by Mattel in August 2007
List of 10 Worst Toys
Mattel Toys According To Ages
List of Toys Recalled by Mattel