Business Case Studies, Managing in Troubled Times Case Study, Mattel's Product Recalls (A), The Chinese Imbroglio

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Managing in Troubled Times Case Study

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Case Title:

Mattel's Product Recalls (A): The Chinese Imbroglio

Publication Year : 2008

Authors: Sai Prasanna, Rajendar Singh Rathore

Industry: Toys

Region:China

Case Code: TRT0072

Teaching Note: Available

Structured Assignment: Available

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Abstract:
The case study tracks Mattel's history of liability accusations and product recalls, for more than two decades. It was regularly clashing with regulatory agencies like CPSC, regarding disclosure of existing or potential hazards in some of its toys. Amid such circumstances, Mattel was once again accused of defective toys - owing to design, as well as, manufacturing flaws in August 2007. In fact, industries across the globe witnessed a spate of recalls of China-made products that included every thing from pet food and toothpaste to clothes and toys. What then should Mattel do to handle the crisis? How can it successfully leverage on China's cost-efficient production, without affecting its reputation and profitability?

Pedagogical Objectives:

  • To discuss Mattel's emergence as the world's premier toy-maker
  • To critically examine the reasons behind Mattel's product recalls for more than two decades
  • To identify the problems in outsourcing manufacturing operations to suppliers in low-cost countries
  • To suggest different ways of handling Mattel's crisis.

Keywords : Liability Accusations; Consumer Product Safety Commission (CPSC); Tainted 'Made in China' image; Barbie; Fisher Price; Hot Wheels; Age Compression; Shorter Product Lifecycles; Supply Chain Issues; Outsourcing Manufacturing Operations; Toy sales in Holiday Shopping Season; Robert Eckert; Managing in Troubled Times Case Study; Lead Contamination in Surface Paint; Design Flaws; Crisis Management

Contents:

  • The Toy Industry Background
  • Mattel and its Success Story
  • The Troubled Times
  • The New Toy Crisis – What Went Wrong?

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