An Ethical Issue with Mattel

An Ethical Issue with Mattel

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An Ethical Issue with Mattel.

A Brief History of Mattel

Mattel is currently one of the top music toy producers in the world. The company was formed in the year 1945. It started as a garage workshop owned by Harold Matson and Elliot Handler (Barboza, 2007). The name was driven from the first letters of the two partners’ surnames. Mason later sold his shares of the company and Ruth and Elliot, famously known as the Handlers, took the total ownership of the company. Elliot had great passion on industrial design. He majored his designing activities in making consumer items from a plastic material called Lucite. The passion led him to designing Lucite lamps, picture frames, hand mirrors and candelabra to decorate their newly acquired premise.

 Ruth was convinced with the quality of Elliot’s product and was struck with the idea of selling them. After convincing themselves that they can constructively work together, they decided to buy materials from Sears worth $200 on credit and started production. Their first products were outstanding and their first big seller was “Uka-a-doodle”. The company financially specialized in toy designing and production in 1955 after being formally incorporated in California in 1948 ( Barboza, 2007). Some of their famous products are burp gun, a toy cap gun and Barbie Doll. Currently Mattel also research new toys and license toy inventions apart from manufacturing.

The Business         Environments of Mattel

The operation of Mattel entirely depends on its environment. The environment is composed of primary business environment that is the stake holders and the secondary business environment which includes the government regulations, changes in the economy and competition. The business environment components of Mattel are described below.

Mattel faces stiff competition in manufacturing, marketing and sales of toys. The major factors which influences the effect of competition to any company in this industry are quality of the toy, play value, appropriateness of the toy to the targeted consumers and the price of the product (Louise, 2007). Some of the large toy producing companies which offers competition to Mattel includes Bandai, Hasbro, Jakks Pacific, Leap Frog, Lego, MGA Entertainment, Spin Master, Tomy and VTech. Most of the Mattel competitors sell other products apart from toys. These products include video game consumer products and electronics. This intensifies the competition these companies offer to Mattel in the market. Having variety of products will mean larger customer base.                    (Jenings,2012) [pic 1]

The graph above shows how Mattel experiences a stiff competition in the market.        

 These companies have small retailers which deals with large portions of all toy sells. These helps in creating a variety of choices to customers within the retail building. The fans therefore get attracted to these retails (Louise, 2007). Most of these companies create direct contact with parents and their children through in-store purchase, coupons and print advertisements (Kavilanz, 2009). These helps them in gluing their customers to their products. Some of the companies also use online distributors like Amazon.com to advertise variety of their products. For Mattel to put up with the stiff competition, they offer variety of toy products for children of all ages to expand their targeted Market. The company also carries out several advertisements to win more customers.

Another significant stakeholder for Mattel is the supplier group. Mattel has suppliers who operate in different countries (Kavilanz, 2009). The countries where the company’s suppliers have majored the most are Asia and Japan. These suppliers ensures that the company receives production goods in time and sufficiently.

 Customers are also very significant primary stakeholders in Mattel. Customer base is one of the major source of revenue to the company. Through the sales of goods to the customers, the company gets revenue which is used in continuing the production. The customers are based in almost all the continents of the world. In the company’s annual report which was released on 2013, the continents which registered highest sales of the of the company’s goods to the customers where indicated. The leading continent was Europe which registered a revenue of $ 1,806.7 million which represented 55% of the total international sales. Latin America registered sales worth $1,011.7 which was 31% of the total international sells (David.2007). The third region to produce high sales of goods is Asia Pacific. It generated $459.4 which is 14% of the total international revenue earned by the company during that company. The major consumer of the company’s product are children. Most of these children are supported by their parents or    guardians to meet the purchasing power.