Mattel’s China Experience: A Crisis in Toyland Essay

In 2007, Mattel a California based play come with shockingly recalled 19 million toys that had been manufactured in China. Mattel was founded in 1944, and has produced iconic toys much(prenominal) as Barbie and Hot Wheels. The company had a long conventional trust with their consumers that had been forged from decades of reliability. However, when the company recalled 19 million toys due to health and caoutchouc violations, consumer confusion and outr long time soared. The public wanted to know how such an established companys dearty regulations could fail, how Mattel was addressing the issue, and whether consumers could trust Mattel to produce true(p) toys in the future.Mattel had been a long time attracter in the toy industry. Mattel and its main competitor Hasbro held control of over a third of the toy market, even in an industry with over 900 manufactures. However, there had been shifting trends in the toy industry. New electronics and video games were becoming incr ea sely popular among old children. Since Mattel manufactured classic toys such as dolls, the shifting trend hale the company to focus on marketing towards young children under the age of 12. charm this segment responds well to Mattels products, they also are the virtually at risk of endangering themselves. The younger the children, the more likely they are to rank toys in their mouth. This behavior puts children at risk of choking or ingesting disadvantageous chemicals.Even with new adversities in the toy industry, Mattel remained a international exacter. As seen in Exhibit A, a SWOT analysis of the company, Mattel had many different strengths that kept it a favorite among consumers. Some of its most significant strengths include its reputable brand name among consumers and its successful marketing of toys through childrens entertainment. Even with changing toy preferences, Mattel was growing internationally. In Exhibit B you can see Mattels global sales. While Asia only make up a quarter of Mattels sales, they were forecasted to grow 25% annually. gross sales in Asia could help combat Mattels plateauing market in the joined States. The company seemed like it was in a strong position.As archaeozoic as the 1970s Mattel was manufacturing products in China in order to reach advantage of lower costs and enable corporate resources to focus on establishing the brand. By 2007, nearly 65% of Mattel products were produced in China. Mattel used a combining of company-run plants and a network of contract manufacturers. Exhibit C displays a alter example of Mattels bring home the bacon chain after moving ware to China. Global production obviously had major benefits for Mattel, the country factors of China gave it a comparative cost advantage over producing in the U.S., and outsourcing enabled Mattel to remain remunerative in an increasingly competitive toy industry. However, outsourcing does declare disadvantages, a global render chain increases the challen ges to regulate and enforce forest. While Mattel had been a leader in condom standard and regulation, even collaborating with the American Society for exam and Materials (ASTM) as well as establishing Global Manufacturing Principals (GMPs) the regulatory standards in go down were not thorough enough.In 2007, quality issues surfaced within Mattel as sundry(a) products were found to contain levels way beyond U.S. federal toy safety regulations. During the year, other issues surfaced with Mattel products surrounding the safety hazard of magnetic pieces used in their toys. By the end of 2007 Mattel recalled over 19 million toys. The recall of such large quantities of product left consumers shocked and demanding to know how Mattel could be so unreliable. The reason for the safety hazards in Mattels products was do to their lack of influence oversight of contract manufactures in China. Mattel wanted to cut manufacturing costs and belittle lead time, which resulted in increasing pre ssure by their undertake manufactures to let on inexpensive materials quickly. Under the same cost-saving initiatives, Mattel was increasing the amount of goods at statistical distribution centers making it more difficult to preform thorough quality forbears.Had Mattel ensured their contracted manufactures were sourcing from neat suppliers, and preformed quality checks before products went to retailers, the recall most likely could have been avoided. Instead, Mattel forget me drug guidelines, and hoped on little more than good faith that they GMPs were followed. Hasbro, Mattels main competitor has a similar supply chain in place, but avoided the lead blushing mushroom crisis due to their commitment to natterion. Hasbro set standards for lead paint that were higher than U.S. regulatory standards, and took proper measures to make sure their exotic contractors were also following the same standard. Hasbroplaced their own quality authorisation inspectors on factory floors, and inspects each product again before it went to retailers. Hasbros extra commitment to quality helps the company deliver a safe and reliable product to customers.Due to the lack of quality management Mattel proclaimed a voluntary recall of some products. While they did report the safety hazard, they reportedly took months to gather information and investigate the problem before publicly announcing it. However, under regulatory rules, even potentially hazardous products are suppositional to be reported within 24 hours. Mattel did explain to the customers that the lead paint was due to bad behavior by their contracted manufactures in China, easing many parents minds that Mattel would correct the issue. Then, Mattel actually apologized to regulatory officials in China, taking the clean for the quality management issue, especially since the dangerous magnetic toy parcel was Mattels design. This action left many customers wondering who was at blur and if they could trust Mattel again. While Mattels contracted manufactures should have been following the GMPs regulations set by the company, it is eventually the business of the company to ensure their employees are preforming to the proper standard. Parents just want to be sure that their young children will be safe playing with Mattel toys, even if the child puts the toy in its mouth. Establishing quality checks similar to Hasbro will enable Mattel to deliver a better regulated, and ultimately safer product to their customers. Exhibit D shows how where Mattel should place quality checks in their supply chain. prime(prenominal) check one will ensure that the materials being sourced project U.S. regulatory standards, even abroad. These types of checks could have helped Mattel avoid the lead paint recall. Quality check 2 ensures the overall standard of the product this type of check could have helped the company avoid the flawed magnetic design recall.Having a global supply chain gives companies like Mattel many c omparative advantages, such as lower production costs, but also comes with more responsibility to ensure product quality regulations. When Mattel failed totake the proper precautions to thoroughly inspect their products they put young children at risk of exposure to hazardous materials. While this significantly damaged Mattels public reputation, the company can tacit take measures to improve its process. By implementing more quality inspections throughout their supply chain Mattel can avoid future scandals like the 2007 recalls, and gain moxie the trust of their customers.ExhibitsExhibit AMattel SWOT AnalysisExhibit BExhibit CMattels Supply ChainExhibit DMattels Improved Supply ChainWork CitedVollmer, Sabine. How to Become hotshot of the worlds Most Ethical Companies. How to Become One of the Worlds Most Ethical Companies. CGMA Magazine, 27 Mar. 2014. Web. 03 Apr. 2014. Toy Safety. Safe Kids general RSS. Safe Kids Worldwide, n.d. Web. 03 Apr. 2014. Hill, Charles W. L. Global Bu siness Today. Boston, MA McGraw-Hill/Irwin, 2006. Print. Teagarden, Mary. Mattels China familiarity A Crisis in Toyland. Mattels China Experience A Crisis in Toyland (2007) n. pag. Print.