Restructuring / Turnaround Strategies Case Study

Mattel's Digital Makeover

Abstract:

Mattel, the largest traditional toys and games manufacturer in the US was a Fortune 416 company as of 2006. It had to its credit some of the renowned brands in the traditional toys and games markets like the Barbie, Hot Wheels, Matchbox and Fisher-Price to name a few. During the new millennium the fate of Mattel, whose main target customers were children, became questionable due to the change in their attitude toward traditional toys and games. Children were becoming more mature even at an early age due to their increased exposure to technology which made them skip traditional toys and games in favor of CDs, iPod, videogames and the not so childish products like makeup, jewelry, and body spray. To overcome this changing trend, Mattel adopted a number of strategies like diversifying into related and unrelated fields, introducing new technologies into its toys and launching the kids’ version of popular consumer electronics. Mattel also ventured into the World Wide Web and used the internet as a channel for brand building. In spite of its efforts the annual domestic revenues of Mattel fluctuated and did not result in significant top line growth. Added to these, Mattel also faced challenges from the traditional toys and games business.

The case details the history of Mattel, the traditional toy and game market, Mattel’s strategies during the new millennium and also briefs the challenges facing Mattel. The case facilitates learning of the basics of Marketing- the 4Ps and application of Porter’s Five Forces Model.

Pedagogical Objectives:

• To discuss Porter’s Five Forces Model through the case
• To discuss the 4 Ps of the Marketing Mix through the case.

Keywords : Traditional toys and games; Restructuring / Turnaround Strategies Case Study; Mattel; Hasbro; Barbie; Video games; Bratz; Hotwheels; Fisher Price; American Girl; Kids Getting Older Younger; Brand building; Radica Games; Kids marketing; Tickle Me Elmo; Web page design