TNC Case Study - Mattel

1. TNC Case Study - Mattel • Barbie Dolls • Hot Wheels cars • Scrabble • Harry Potter • Fisher Price • Matchbox cars • Dora the Explorer • DivaStarz

2. Timeline – how has the company grown over time? (New product development vs acquisition of other companies) 1945 – Mattel is born. Ruth and Elliot Handler and Harold Matson launch the company in Southern California. The first Mattel products are picture frames. 1947 – Mattel begins to make musical toys. 1955 – Mattel begins advertising toys through the popular ‘Mickey Mouse Club’ TV show, revolutionising the way toys are marketed. 1959 – Inspired by her daughter’s fascination with cut-out paper dolls, Ruth Handler suggests making a 3D toy doll. She names the doll Barbie after her daughter’s name, Barbara. 1960 – Mattel becomes a PLC and has it’s common stock listed on the stock exchange. 1961 – The Ken doll is introduced as Barbie’s boyfriend. 1968 – Hot Wheels die cast vehicles are rolled out. 1972 – The company restructures to create Mattel Inc., with 1 division and 7 subsidiaries. 1982 – ‘He Man’ is created. 1986 – Mattel enters into a joint venture agreement with Bandai, Japan’s largest toy company. 1988 – The alliance between Mattel and Disney begins. 1989 – Mattel aquires Corgi toys, a British maker of die-cast cars. 1993 – Mattel buys Fisher Price for US$ 1.2 billion. 1995 – Mattel distributes the Cabbage Patch Kid. 1996 – Mattel obtains rights on Nickleodeon characters. 1997 – Mattel bought Tyco (3rd largest toy manufacturer in the USA) 1999 – Mattel forms an alliance with Bandai, taking a 5% share in Power Rangers. 2000 – Mattel is granted licensing for Harry Potter.

3. Location • Barbie’s Global Shift: • Many branches in the USA. • Manufacturing pre 1950s took place in Japan. • Manufacturing post 1950s in China, Indonesia, Malaysia, Mexico and Thailand. What were the reasons behind the ‘Global Shift of Barbie’?

4. Reasons behind Barbie’s Global Shift Most of Mattel’s sales are in the USA. Wage costs in the USA are amongst the highest in the World. To make Barbies in the USA would reduce profits significantly. Mattel now make the bulk of their toys in China. The company have ‘Principles’ that apply to all parties that manufacture, assemble or distribute any products bearing their logo. This means that no one under the age of 16 can be employed and if local law requires a higher minimum age, it will comply. It was the first company to utilise external independent monitoring (as well as an internal monitoring program) to ensure the welfare of it’s staff. Do you think that Mattel has been proactive or reactive in it’s approach to child labour?

5. Sales Geographical location of Mattel sales 2000: One child in an industrial country consumes and pollutes the same amount as 30 children in LEDCs over a lifetime. What controls do companies like Mattel have over people in MEDCs (in the north) and LEDCs (in the south)? Mattel describes itself as a ‘global consumer products company’. How far would you agree with this statement?

6. Are large TNCs such as Mattel controlled? Consumers have the power to influence TNCs through buying power. This means that Mattel has to keep up with latest trends in toys. Buying power may be a reason why Mattel were keen to implement welfare rights for Chinese workers. The control managed by large TNCs such as Mattel mirror the control exerted by organisations such as the WTO.

7. The Future? Barbie is Mattel’s biggest selling product. If the company is to survive it needs to move with current trends. These recent articles suggest that the battle may be being lost. Mattel also needs to consider more modern ways of shopping. Toys R Us and Walmart account for 33% of sales, but the company is reaching customers in new ways, including catalogue and online sales.