Mattel

2 Pages 521 Words

12 June 2001
1) What was Jill Barad’s primary goal for Mattel in 1996? What strategy did she choose in order to pursue these goals?
Answer: The primary goal of Jill Barad for Mattel was to increase earning per shares by 15% per annum compounded before the effects of any acquisitions. The following are the 4 elements of her strategies:
1. Continue with the highly profitable practice of extending the company’s existing brands (e.g. she had plans to further develop a line of collectible Barbie dolls);
2. Develop new product categories, particular in boy’s toys and board games where Mattel had traditional been weak. It could be accomplished through internal product development or by acquiring an emerging company and then growing its business through further investments.
3. Expanding overseas market sales to more than 50% of Mattel’s total;
4. Cost reductions by outsourcing production to low-cost foreign factories in places such as China.

2) Why did Barad’s strategies fail to generate the profit growth she had planned? Could better planning have helped Barad anticipate market trends?
Answer: The following are the number of problems that had stymied Barad’s strategies:
l Parents were buying fewer toys and shifting their spending to computer software and video games for their children;
l Parents were shifting the spending to competing dolls such as Pleasant Company’s highly successful line of American Girl dolls;
l As Disney’s most recent animated movies had been less successful than expected, the related toy sales had suffered accordingly;
l The popularity of the Barbie brand had declined, partly because of changing fashions.

If Barad had awareness of external threat that computer were becoming more popular to families, which parents might use it to entertain and educate their children and the lack of creativity of recent toys, her planning might have more consideration on innovative products. The same situat...