Company Analysis and Evaluation Project

COMPANY ANALYSIS AND EVALUATION PROJECT 11

Brief Description

Mattel is the major producer of American toys. The company formed in1945 is situated in California. Mattel is accountable for makingrecognized brands such as Fisher-Price, American doll, Barbie amongother collections. The products created by the company are derivedfrom famous televisions actors/actresses in children’s programs. Afew illustrations are Barbie, Hot Wheels, and American Girl (Santoli,2011). Mattel’s objective derives from the conviction thatleadership provides the reason for forming and upholding anenterprise via their workers and client actions. The ideals haveresulted in their success, not merely in America rather, globally.

SWOT Analysis

The analysis is the approach employed by Mattel in determining theinterior and exterior aspects, which will influence theorganization’s prospect performance. The weaknesses and strengthsare interior, while the opportunities and threats are exterior to thecompany.

Mattel Company SWOT Analysis

Strengths

  • Mattel is a leading manufacturer of toys in the globe.

  • Its operations are in more than 150 nations.

  • The company has a great brand fair play.

  • Scale of opportunities.

  • Has a strong supply chain.

  • The company is highly competitive – has a great financial position when compared to competitors on an international level.

  • Great branding and marketing via online presence, both print and television advertisements.

Weaknesses

  • Mattel employs cheap labor in developing nations.

  • Issues related to the safety of its products – the company has been engaged in many controversies such as toxic toys that hurt the company’s image.

  • There are many fake products infiltrating the market resulting in revenue loss.

Opportunities

  • Possibility of innovating more toys using technological advancements.

  • The weakening of the US dollar will facilitate expansion overseas and permit penetration to emerging markets.

  • It is possible to include holograms in their products to make imitation difficult.

Threats

  • There is availability of imitated products and toys, which are cheaper.

  • Other similar manufacturers pose a threat due to competition.

  • Possible clients may prefer to purchase video games to having toys.

Balanced Scorecard

Mattel Critical Success Factors

How to Measure the CSF’s

Customer Factors

  • Customer contentment

  • Quality of toys

  • Sales and marketing

  • Distribution

Surveys conducted on customers to determine their view of Mattel’s products, number of toys returned by customers and complaints.

Quality is measured depending on the figure of customer’s that complain about the toys. The money spent on warranty also measures it.

Sales performance inclinations and market study to determine the percentage of people buying products.

Number of Mattel’s product order in every region or state.

Learning and Growth

  • Product innovation

  • Timeliness of products

  • Skill growth

  • Employee morale

Figure of new products that have been created by the company, research and development competence amid employees.

The days before or after the supposed shipment day

Improvement in skills notable in workers

Employee survey and turnover

Financial Factors

  • Sales

  • Profitability

  • Market value

  • Liquidity

Number of sales made over a given period, could be after a few months or year, percentage of sales from new products.

The company’s trend in earnings

Share price

Asset ratio, sales turnover

Internal Business Processes

  • Productivity

  • Safety

  • Quality

  • Flexibility

The amount of time it takes to create a new product, labor and machinery effectiveness.

Number of accidents occurring during manufacture, packaging and severity of accidents

Figure of product defects and returns, surveys conducted on customers to determine their view on the products, number of claims from warranty and level of rework on products

Time taken in creating a new product from the period when the order is placed

Discussion of the CSF’s

CSF refers to the factor, which is important for a company to attainits mission. It is critical because it determines whether the companywill succeed or not. The factors selected in the balanced scorecardchart are important in determining whether Mattel has beensuccessful.

Customer factors comprise of customer contentment, quality of toys,sales and marketing and distribution. The customers are the mostimportant asset of any company. As a product manufacturer, Matteldepends on its clients in making sales. Without the customers, thenthere will be no success. Customer contentment is a critical factorbecause it helps in determining whether Mattel meets demands, and ifits products will progress to sell. When customers are satisfied withthe products, it also becomes possible for the company to introducenew designs to the market. When customers are not content with theproduct, they could opt to purchase from competitors hence, ensuringthe satisfaction of consumers is key to company success. Customersare more likely to purchase products that meet their quality demands(Sethi, Veral, Shapiro &amp Emelianova, 2011). The quality of toysis important in convincing customers to purchase. The company mustendeavor in ensuring that the least number of toys are returned back.The lesser the figure of toys returned, Mattel is able to make moresales and determine its success in the toy market. Quality of toysalso ensures that Mattel progresses to be the lead toy manufacturerin America. In all businesses, sales are the division, whichgenerates income. Regardless of how perfect the manufacturing is,technology applied, or how in place financial objectives are, salesmechanism must be in check (Sethi, Veral, Shapiro &amp Emelianova,2011). Sales and marketing has been chosen to determine the level ofsales that the company makes. Marketing is important in determiningthe reach of Mattel’s products. Sales and marketing are importantto the company because they are the sources of revenue for the entirecompany operations. Distribution is a success factor as it helps thecompany establish regions that have been successful, or where moremarketing needs to be focused (Sethi, Veral, Shapiro &ampEmelianova, 2011).

Key success factors under the learning and growth category areproduct innovation, timeliness of products, skill growth and employeemorale. Product innovation is selected in determining the number ofproducts that the company has been able to create. It is a successfactor as it helps in ensuring that Mattel progresses to becompetitive. Bearing in mind that there are many competitors andimitators, Mattel invests in products that are unique and hard toimitate, which ensure that they progress to be lead toy manufacturers(Sethi, Veral, Shapiro &amp Emelianova, 2011). Timeliness ofproducts is a success factor, which determines when products aredelivered to consumers or distributors. It is necessary to ensurethat products are available on demand, because delays may derailclients from making orders in prospect (Blocher, Stout, Juras &ampCokins, 2013). It is also important in demonstrating the Mattel’seffectiveness to deliver on time. Skill growth is a factor indepicting how employees have advanced over the years while working inthe company. Depending on the level of employee skill development,the company saves on expenses incurred when having to recall productsdue to employee errors. Skill growth determines the effectiveness ofthe training the company executes on employees, as well as helping inestablishing what areas of training need improvements. Similar tocustomers, employees are very important to a company. Their moraleaffects their productivity. Employee morale is a key success factoras it informs the company on what to do in improving their employeesworking conditions (Blocher, Stout, Juras &amp Cokins, 2013).

Financial factors of sales, profitability and market value arerelevant in validating the position of Mattel amid other Americancompanies. The company has been in operation for many years and itsproduct line has been successful. The sales Mattel makes within agiven period explain if the company is progressing in making profits.Profitability is measured through the company’s earnings trend(Blocher, Stout, Juras &amp Cokins, 2013). The factor informs onwhether products introduced, or changes made in the company over timehave been successful. Mattel has the biggest market share however,there have been emerging companies competing in the similarproduction line. Market value is a success factor as it ensures thatdespite the competitors, Mattel progresses to make more sales, bymaintaining clients and drawing new ones.

Internal business processes are critical to the success of a company.This is because success begins from the internal operations of thecompany (Blocher, Stout, Juras &amp Cokins, 2013). Productivity, asa success factor is selected because it demonstrates theeffectiveness of the company in making products available in themarket (Witt, 1999). Safety is important during production. The levelof safety should be high as it minimizes expenses spent in dealingwith damages and injuries. Safety is important in accessing successbecause it determines the measures Mattel has adopted in ensuring thewellbeing of its employees, which improves morale, and as noted saveson accident costs. Quality accesses success depending on the figureof products returned due to defects. It provides the company with anoverview of the success in product quality, which will be importantin reducing warranty returns. Flexibility is a factor important invalidating how much time the manufacturing department spends onmaking products. It also informs on the capability of Mattel todeliver upon demand. It accesses success, for instance when a newcharacter, which could become a possible toy model is released inmovies, the level of flexibility in Mattel will be important inensuring that they are the first to release the toy. This means thatconsumers will identify the product with Mattel, ensuring they remainahead of their competitors.

Evaluation of CSF’s

Mattel is engaged in a competitive industry. The company isrecognized for its quality and cutting edge products. Its investmentsare aimed at the creation of innovative designs, which ensures thecompany progresses in dominating the toy industry. This has been thecase for many years, especially with toy designs borrowed from famousmovies that target children (LaMonica, 1996). In addition, Mattel hasa great reputation. Industries, which intend to make and sell aspecific product to promote their organization, like Walt Disney,seek for major and established organizations. This is because theysuppose the established company will manufacture their order on theirbehalf and produce quality toys. It implies that Mattel does not justsell its unique designs rather, those of different organizationsdepicting their effective flexibility and ability to ensure qualityas success factors. Because Mattel handles a lot of revenue, theyhave more capital to invest in marketing and ensuring quality ofadvent toys. They use the money to test toys and ensure that they aresafe and meet customer demands.

However, flaws in quality have previously affected Mattel’sprofitability. Despite the company’s endeavor in ensuring its toysare safe, it has had to recall above 21 million toys (Pimlott, 2007).The recalls arising from design errors, as well as possibly harmfultraces of lead paint in toys from China. The effect was disruptionsin several supply chains, affecting sales in the third quarter.Mattel faced charges amounting to almost $40 million due to the toyrecalls (Pimlott, 2007). Delayed shipping and the process of revokingexport permits in China help product delivery for some weeks. Somenations took extreme measures of banning the company from importingdue to safety issues, like Brazil. The sale of Barbie toys declinedin America due to delays arising from shipping. Mattel responded byinitiating more thorough testing principles, as well as oversight ofthe production procedures. The measures are intended at avoidingrepeat recalls in prospect (Pimlott, 2007).

Mattel engages its consumers in the manufacture of products, whichthey suppose will be acceptable to the public. Engaging customersensures that they are satisfied with the products. For instance,Mattel initiated an Open Innovation Initiative in 2012, withthe objective of developing crowd-sourced concepts for theirproducts. Through the initiative, Mattel seeks ideas from potentialclients. It also works as a manner of openly communicating withclients on their response to products. In line with crowd sourcingproduct concepts, Mattel continually endeavors to keep in touch withconsumers, via social media. Mattel has operations in more than 150countries. This implies that the company is achieving its sales andmarketing objectives. The ability to market and distribute in all thenations implies that the company has made its products international,and not merely restricted to the American market. It also impliesthat the toys made by Mattel are accessible in all nations. Mattelemploys production services from China due to the ready availablelabor. It means that there are enough employees to meet demands inall aspects of eminence, functionality and distribution of theirtoys.

Mattel is the lead toy maker in America, which implies that it has agreat market value. Generally, the company’s liquidity evaluationis positive. This is due to a rise in current assets contrasted to afall in current liabilities, hence permitting Mattel to enhance itsliquidity. Quick assets ratio depicts that Mattel has been able toturnover sales on credit fast over the years, facilitating moreliquidity. The company is profitable due to their ability to employassets effectively in generating sales revenue. Mattel’s debt toequity ratio has been favorable enabling an increase in equity. Thecompany observes third-party reservoir bodies holding Mattel’scash, as well as equivalents. Its basic insistence is on principalliquidity and safety. The secondary emphasis is on capitalizing onyields. Cash and equivalents are spread amid counterparties as ameasure of reducing exposure. Mattel supposes some of their clientsand vendors may face challenges in acquiring liquidity needed inpurchasing raw material. Mattel assesses its clients’ monetarycondition, as well as their liquidity to lessen the accountsreceivable collective perils and client terms are amended, if needarises.

Mattel is highly productive as well as flexible. The company’sproducts are easy to find in the market. The period it takes forproduction of a toy and release in the market is appropriate and inline with market needs. Since some of the toys are charactersborrowed from actors, releasing products after movies have aireddepicts the productivity of Mattel as a success factor. It depictsthat as soon as the company detects a television characters, possibleto be liked by its children target market, they commence designingand making of the toys. Thus, they are able to release and sell toyswhen movies are still famous. Rarely have there been complains fromemployees about their working conditions as Mattel personnel. Thecompany employs modern technology in its production, which lessensthe work for employees. The only concern raised relating to staff isMattel’s employment of cheap labor from developing nations, whichopens up possibilities of exploiting individuals in need of work. Inthe developed nations, competent workers, comprising of marketers,designers and engineers make up the staff. These individuals haveclearly outlined roles. Accidents rarely occur in the company due tofrequent maintenance. The company also endeavors to provide a safeworking environment as is required by law.

References

Blocher, E. J., Stout, D. E., Juras, P. E., &amp Cokins, G. (2013).Cost management: A strategic emphasis (6th ed.). New York,NY: McGraw-Hill/Irwin.

LaMonica, P. R. (1996). Mattel and hasbro: Toy stories. FinancialWorld, 165, 20.

Pimlott, D. (2007, Oct. 15). Mattel earnings hit by product recalls.New York FT.com, 1.

Santoli, M. (2011). Shares of Mattel still play well. Barron`s,91(50), 18.

Sethi, S. P., Veral, E. A., Shapiro, H. J., &amp Emelianova, O.(2011). Mattel, inc.: Global manufacturing principles (GMP) – Alife-cycle analysis of a company-based code of conduct in the toyindustry. Journal of Business Ethics, 99(4), 483-517.

Witt, C. E. (1999). Mattel merges production with distribution.Material Handling Engineering, 54(5), 46-52.