Strategy review evaluation and control

1.0 Strategy Review, Evaluation, and Control

The best-formulated and best-implemented schemes become disused as a house ‘s external and internal environments alteration. It is indispensable, hence, that strategists consistently reexamine, measure, and command the executing of schemes.

We have developed a general strategy-evaluation model for Mattel:

  1. Reviewing bases of scheme
  2. Measuring organisational public presentation
  3. Taking disciplinary actions

Besides that, we will present balanced scorecard as another strategy-evaluation tool to analyse Mattel from few countries of aims: clients, managers/employees, investors/shareholders, operations/processes, community/social duty, and financials.

1.1 General Strategy-Evaluation Model

1.1.1 Reviewing bases of scheme

Reviewing the implicit in bases of Mattel ‘s scheme could be approached by developing a revised EFE Matrix and IFE Matrix.

As being good described and analyzed in Chapter 3 and 4 of this study, here, we will revise EFE and IFE Matrix to reexamine and measure how effectual Mattel ‘s schemes have been in response to cardinal external and internal factors.

External Factors


  • Mattel has a opportunity to market Barbie to the whole universe and do it a recognizable trade name worldwide. This has been proven that Mattel tries its best to better its selling schemes to perforate different market sections and strive for stable gross yearly from international market.
  • Weakening dollar makes the monetary value of Mattel ‘s toys becomes more low-cost. It is helpful in addition its gross. To take this advantage, in fact, Mattel has reduced the merchandising monetary value of its merchandises in some states.


  • Many kids start abandoning touchable playthings and looking for more synergistic and technological plaything or cyber/virtual games. That was why Mattel tried to diversify into package industry. However, until now, its consequence is non satisfactory. One of the grounds is, the adopted schemes are non matched with its corporate civilization or operations.
  • Global recession caused decreased disbursement or down trading for plaything. This is inevitable despite how much attempt has been made to excite the gross. However, if Mattel is able to do it more low-cost and make a demand for clients, it might alter its state of affairs. However, schemes should be good developed.
  • Different states with different civilizations and linguistic communications in fact have posed barriers which hindered market incursion schemes of Mattel. However, Mattel seemed to hold overcome them good as it tried to market its merchandises with different linguistic communications in different states and modified the content of ads with some “local flavors” .
  • Many other rivals keep coming out with different and better merchandises, such high merchandise permutation menace might endanger the competitory place of Mattel. Therefore, Mattel is peculiarly cautious with its merchandise quality and safety issues. However, there was still an eruption of toxic plaything which caused few 1000000s loss to Mattel.
  • Due to the outgrowth of China market and since many production workss have been setup in China, natural stuffs are capable to monetary value fluctuation when the economic system of China appears to be unstable. To get the better of this, perchance, Mattel can turn up its workss at many different states. The ruin in one state might be offset by the upturn of another state.

Internal Factors


  • With successful operational and selling schemes, Barbie has been known as a long established trade name for 60 old ages. With recognizable trade name portfolio and broad merchandise scope to provide assorted life phase, in fact, Mattel has safeguarded its market leader place for old ages. One of the schemes is to hold new merchandise launch yearly, so that, clients will hold “surprise” every twelvemonth. Such schemes are considered successful.
  • With the attempt and doggedness in keeping concern unity and practising corporate societal duty, it has brought much recognition to the repute of Mattel. Despite the dirts, Mattel does hold a group of loyal protagonists and fans who will buy new merchandises of Mattel. Such scheme of making trueness and trust in clients is really effectual in client keeping.
  • Since Mattel has strategic partnership with Microsoft, Disney, BanDai and etc, this created an unbeatable strength for it. As there are so many other strong challengers who strive to win market portion from Mattel, Mattel tries to organize a strong confederation with other strong companies in the market.
  • Devoted, highly-motivated and energetic direction squad which works together to do better and better merchandises and public presentation and remain together during day of reckoning clip, this shows that Mattel has a successful HR scheme which retains experient and outstanding employees in the corporation.
  • Since early twelvemonth, Mattel has been maintaining its intangible assets as its valuables, such as trade names and hallmarks. That is why it has a peculiar section which deals with this issue.


  • Unprofitable amalgamations and acquisitions of the Learning Company had made a loss of about billion in Mattel ‘s history. Although finally Mattel sold off this subordinate, this reduced the assurance of investors as Mattel ‘s direction is perceived as excessively foolhardy in M & A ; A scheme.
  • Due to many external alterations, stealing popularity of their core merchandise – Barbie has been shown in the worsening gross revenues of its merchandise. Therefore, Mattel keeps coming out with new merchandises to retain the involvement and passion of clients.
  • After the eruption of toxic playthings dirt, by and large, the degree of credence of clients has dropped. No uncertainty, Mattel has been endeavoring to give the clients the best merchandises, in footings of quality, safety, and etc, nevertheless, such an incident is about fatal to the repute and hereafter of Mattel. No affair how good the schemes are, one dirt might destroy the company as a whole.

1.1.2 Measuring organisational public presentation

This includes comparing expected consequences to existent consequences, look intoing divergences from programs, measuring single public presentation, and analyzing advancement being made toward meeting stated aims. Both long-run and one-year aims are normally used in this procedure. Criteria for measuring schemes should be mensurable and easy verifiable.

By and large, scheme rating is based on both quantitative and qualitative standards. For quantitative standards, fiscal ratios are normally used. There are three critical comparings:

  • Comparing the house ‘s public presentation over different clip periods
  • Comparing the house ‘s public presentation to rivals ‘
  • Comparing the house ‘s public presentation to industry norms

Mattel ‘s public presentation over different clip periods has been good explained in Chapter 7. Overall, Mattel is able to keep its fiscal ratios over old ages. It merely has little addition or lessening occurred. Therefore, internally, we may state Mattel is financially stable and strong over old ages. Even during economic crisis period, it was still able to keep its fiscal public presentation at a satisfactory degree.

On the other manus, to compare the public presentation of Mattel to that of rivals and besides industry norms, two chief rivals, viz. , Hasbro Inc. ( HAS ) and Jakks Pac Inc. ( Jak ) have been identified and served as a benchmark to compare the public presentation of Mattel Inc. ( Mat ) .

From the tabular array below, it is obvious that Mattel is the market leader of this industry which holding glorious fiscal public presentation as compared to its chief rivals. By looking at its rating, profitableness, dividend, growing, liquidness and plus ratios, Mattel is far better than rivals and industry norms. In short, based on quantitative standards, Mattel ‘s public presentation takes a taking place which created nucleus competence for its sustainability and endurance. However, it may vouch long-run success if it does non proactively better itself.

Year 2008


Hour angle


Industry Averages


Price/Earnings ( TTM )





Price/Cash Flow





Price/Sales ( TTM )










Per Share Data

Last Dividend





Book Value











5.91 B

4.02 B

903.39 M

3.61 B



742.00 M

654.33 M

101.79 M

499.37 M

Operating Margin

9.74 %

12.29 %

1.85 %

10.29 %

Net income Margin

6.41 %

7.63 %

1.42 %

7.49 %

Gross Profit Margin

45.19 %

55.96 %

35.56 %

45.57 %


Dividend Output

4.18 %

2.96 %

0.00 %

2.38 %

Payout Ratio





Dividend Yield 5 Year Average

3.33 %

2.07 %

0.00 %

1.80 %


Net Income

379.63 M

306.76 M

76.05 M

254.15 M


1.07 %

1.90 %

-12.80 %

-3.28 %


5.91 B

4.02 B

903.39 M

3.61 B


1.56 %

1.44 %

1.71 %

1.57 %

Fiscal Strength

Quick Ratio ( MRQ )





Current Ratio ( MRQ )





Long Term Debt to Equity Ratio

( MRQ )





Entire Debt to Capital ( MRQ )















ROIC ( Return on Invested Capital )






Asset Turnover





Asset per Employee



1.03 M

0.57 M

Inventory Employee turnover





Apart from quantitative standards, there are some qualitative standards needed to be taken into consideration. These standards are presented in inquiry signifiers, including the undermentioned inquiries:

* Is the hiring and enlisting procedure matched with the scheme?

Among the workers working at Mattel ‘s works, a big bulk of the workers ( 79 % ) got their occupation by using straight at the works site, while another 19 % were referred by friends. The mean length of employment among the interviewed workers was about 4.0 old ages. However, for 26 % of the workers, employment at Mattel was their first occupation. This indicates that while the work force includes a ample proportion of impermanent and seasonal workers, the nucleus group provides Mattel with a significant figure of stable and experient employees. The hiring procedure includes general company orientation, which covers such issues as the employment contract, regulations of behavior, disciplinary steps, grudge processs, rewards tax write-offs and overtime wage policies, transit services, installations, comfortss and circuit of the mill. Newly hired workers besides receive information and preparation in the subjects of Environmental, Health and Safety ( EHS Orientation ) . Each worker at the Mattel ‘s works has a signed contract on file. Employee forces records besides include illness and injury studies ; disciplinary action studies ; medical scrutinies and pregnancy leave studies. All new hires are besides given a medical scrutiny. They besides received job-related preparation of changing length based on the specific demands of their occupations. Based on these mechanisms on hiring and enlisting, Mattel is able to guarantee they have selected the best and right people to accomplish company ‘s ends.

Are the workers able to understand and pattern GMP?

GMP is really of import in guaranting the quality of merchandises. Interviewed workers mostly confirmed that they were familiar with assorted commissariats of Mattel ‘s GMP. Management Compliance Report ( MCR ) indicated that GMP papers in local linguistic communication was provided to all employees and is available in local linguistic communication. The Plant Manager plays the cardinal function in pass oning GMP information to supervisors and employees. The MCR besides stated that information on GMP is provided twice a twelvemonth, through assorted beginnings such as the new hire orientation plan, employee enchiridion, boards and the company intranet.

Are the works ‘s workers financially motivated to accomplish company ‘s aims?

Fiscal compensations to works ‘s workers are really of import to keep the morale and motive degree of workers. The minimal pay for Tijuana is $ 41.67 ( Mexican pesos ) per twenty-four hours. Impermanent workers at the Mexico ‘s works earn at least $ 74.00 per twenty-four hours ; while the nucleus group ‘s lower limit pay is $ 85. All overtime is paid at dual pay rates, up to 9 overtime hours each hebdomad. All hours worked in surplus of 9 hours per hebdomad are paid at ternary rates. In add-on, workers besides receive attending and promptness fillips. Besides, all confirmed workers are besides entitled to one-year leave, ill leave, pregnancy leave, free holiday, free transit, free java and bakeshop merchandises, free preparation classs, and etc. These policies are able to fit the workers ‘ aims with company ‘s aims when they are good compensated.

Are work environment of fabricating operations and related installations able to guarantee the quality of work from workers?

As an illustration, the works in Mexico is a big works consisting of one edifice covering an country of over 473,000 sq. square pess. The installation has installed a really modern and efficient bringing system for managing natural stuffs. Resins for fabrication plastic are delivered by trucks to a wayside installation where they are stored in big silos. From at that place, they are delivered to the modeling machines on the mill floor through a sophisticated computer-controlled system. The procedure is designed to maintain the site clean and helps minimise spillage and waste.

The installation maintains, among others, elaborate and up-to-date records on works care, air filtration, noise control, fire bar, and safe storage of risky stuffs. The high criterions of environmental wellness safety of the works were besides confirmed by the ICCA professional technology audit squad through an extended “walk through” of the full works. ICCA ‘s review confirmed that the works was in “good” runing status internally and in “fair” status externally. The works provides free-of-charge Personal Protective Equipment ( PPE ) to all employees where usage of such equipment is required and appropriate. The mill meets or exceeds the GMP demands for bathroom, wash basins, and clean imbibing H2O. Toilets are equipped with an effectual flushing system and are maintained and cleaned on a regular footing. The dining country at the mill canteen is rather attractive. Colorful pictures, natural visible radiation through big Windowss and Television for amusement provides the dining room with a pleasant environment. There is besides an outside eating country for those who wish to smoke. Employees are served two repasts per displacement. The repasts are largely subsidized by the mill with workers paying merely a nominal amount. In add-on, the medical clinic at the works is first-class and well-staffed. It is unfastened 24 hours and seven yearss a hebdomad. It is staffed with one medical physician and three qualified nurses. The clinic has a good record maintaining system for the workers ‘ usage of the clinic including work-related hurt informations.

In short, Mattel has a good maintained installation and operates in an efficient mode while guaranting that the works provides a clean, safe and healthy work environment for its employees. This besides helps to guarantee the workers produce high-quality merchandises.

1.1.3 Taking disciplinary actions

The concluding strategy-evaluation activity is about taking disciplinary actions, which requires doing alterations to competitively repositing a house for the hereafter. These disciplinary actions might be derived from the review of internal or external hearers who review and evaluate the patterns and policies of a company. Some disciplinary actions, for illustration, like changing an organisation ‘s construction, replacing one or more cardinal persons, selling a division, or revising a concern mission. Other alterations could include set uping or revising aims, inventing new policies, publishing stock to raise capital, adding extra sales representatives, otherwise apportioning resources, or developing new public presentation inducements.

As for Mattel, despites some of the dirts, it has been executing good since its constitution. When there were disagreements of public presentation from mark, Mattel had made disciplinary actions consequently.

1. Mattel Independent Monitoring Council for Global Manufacturing Principles

In this internal auditing pattern, the physical works, including all fabrication and storage countries, were found to be in first-class status. The works and its related machinery were good maintained. The housework appeared to be really good resulting in a neat, clean and safe operating works. MIMCO was particularly attentive to guarantee that employees were decently utilizing safety equipment and that environmental patterns were being followed. However, there are few countries have been identified to do betterments.

  • Employee Treatment by Line Supervisors
  • MIMCO ‘ study of the old audit had noted that the primary beginning of employee dissatisfaction pertained to incidents, albeit infrequent, of verbal maltreatment by line supervisors particularly when it is meted out in public and in the presence of colleagues. It was recommended that Montoi ‘s works direction reappraisal all pertinent issues of supervising and human dealingss in its hebdomadal meetings. Further, the works direction should take action to beef up its first-line supervisor preparation plan.
  • Work-place Hazards

Mattel was found to hold deficient storage infinite as it had reached its maximal capacity. This deficit led to storage of volatile compounds in a tool cot in the center of the mill ‘ assembly line. Another issue of concern was the noise degree in some countries caused by the sonic welding machines. This noise degree was found to be in entree of Mattel ‘ GMP criterions in the locality of the sonic welding operations. A possible work hazard described by employees was the hazard of fire when H2O spilled from machines on the electric overseas telegrams in work countries. MIMCO recommended an ascent to the H2O eating system and preparation of employees. The usage of general-purpose public-service corporation knives to pare the cast Markss was identified as a work jeopardy by direction, production employees and the MIMCO squad. These cuts were found to be a major beginning of hurt and lost-days of work. Mattel had made disciplinary actions consequently to rectify the errors and better on the inadequacies.

  • Insufficient Bathroom and Toilet Facilities

In the initial audit of Montoi, employees had complained about long waiting clip for the usage of bathrooms. The employees felt that there were non plenty bathrooms to run into their demands when the works was runing at full capacity. Although, the figure of available bathrooms met both the GMP criterions and the Mexican jurisprudence, it was recommended that serious consideration should be given to spread outing these installations. The Montoi works has added 11 more lavatories for female employees and 8 for male employees.

2. Mattel ‘s disciplinary actions on ICCA 2004 Follow-Up Report of Mattel Owned and Operated Plants in China

  • Regular and Overtime Work Hours

ICCA found that Mattel ‘s workss were scheduling work hours in surplus of Mattel ‘s 60 hr per hebdomad demand. In response to this, Mattel has elected to restrict the maximal figure of working hours to 60 per hebdomad during normal operations, and 72 hours per hebdomad during extremum periods and other extraordinary state of affairss, provided that overtime is voluntary, the employees are paid suitably and work hours in surplus of 60 hours per hebdomad, but less than 72 hours per hebdomad, do non transcend 1/3 of the twelvemonth for each employee.

  • Payment of Minimum Wages

Mattel ‘s China spouse at the Guan Yao installation had made a good religion attempt in negociating a minimal pay that was competitory with other local metropoliss, and had sought out and received blessing for the decreased minimal pay originally stipulated for their country. With regard to this decrease of minimal pay at Mattel ‘s Guan Yao works, Mattel has instituted a policy in concurrence with the new minimal pay addition slated for early 2005, which requires Mattel ‘s China spouse to pay the declared minimal pay for the country. Due to the incompatibility in legal sentiment sing local releases leting a decrease of the minimal pay, Mattel will no longer accept these types of releases from the local labour agency.

  • Inappropriate Wage Rate During Temporary Shut Downs and Other Fortunes

There are three separate and distinguishable state of affairss with regard to the sum of money employees are compensated for hours worked. In each instance that ICCA has identified, Mattel has gone back and assessed an acceptable disciplinary action. For illustration, in the instance of Guan Yao & A ; Chang An, with regard to the payment of minimal rewards during down clip for internal factors within control of the works operations, Mattel has instituted a policy of paying the employees minimal pay during these unexpected closure periods. This policy alteration was instituted in January 2004.

  • Compulsory Deductions and Legally Mandated Benefits

Mattel ‘s one-year leave policy has been amended to reflect the existent yearss of service an employee has worked over the length of their term of office at Mattel. In 2004, Mattel will counterbalance employees with 5 yearss of paid leave for those who quit before the terminal of the twelvemonth and have one twelvemonth of service. Mattel ‘s policy with regard to pregnancy leave was updated in 2004. All employees seeking pregnancy leave, irrespective of whether they return to work, will be compensated for the full 90 yearss, as allowed under Chinese labour jurisprudence. Mattel ‘s policy on tax write-offs for room and board was changed in 2004. All employees who stay in the residence hall and eat at the cafeteria will be charged no more than 50 per centum of their minimal pay rate. It should farther be noted that remaining in the residence halls is voluntary for employees.

1.2 Balanced Scorecard

There are few standards have been introduced to measure and reexamine the public presentation of Mattel Inc.

1.2.1 Customers

Product Quality and Safety

Mattel ‘s repute for merchandise quality and safety is among its most valuable assets. Their committedness to merchandise quality and safety is an built-in portion of their design, fabrication, proving and distribution procedures, and is indispensable to the success of their concern. Children ‘s wellness, safety and wellbeing are their primary concern. They will run into or transcend legal demands and industry criterions for merchandise quality and safety. They strive to gain their consumers ‘ trust through their dedication to safety, and to transcend the outlooks of parents. Employees have an duty to instantly describe any concerns about merchandise safety or quality to Mattel ‘s Worldwide Product Integrity Department.

Consumer Information

They respect the confidentiality of consumer information consistent with all applicable privateness and information protection Torahs and ordinances. They do non portion, sell or merchandise any private or sensitive personal information obtained online from kids without the anterior consent of the parent or unless compelled by legal procedure.

Ad and Promotions

Mattel ‘s trade name and merchandise publicity activities, including advertisement, packaging, point of purchase shows, promotional plans and sweepstakes, should be conducted in a mode consistent with applicable Torahs and with their repute for honestness and unity. They adhere to high criterions of commercial equity in ads and publicities. They must accurately portray the characteristics, quality and public presentation of their merchandises in all advertisement media and packaging in a mode appropriate for their mark audience. They do non misstate facts or supply misleading or delusory information about Mattel ‘s merchandises, or the merchandises of a rival.

They should be diligent in safeguarding the repute of Mattel trade names and merchandises by being selective about promotional chances, such as event sponsorship and other joint publicities, avoiding association of Mattel ‘s name with any merchandise, service or activity which might be considered insecure or inappropriate for kids, or with any individual or organisation if the relationship might be damaging to Mattel ‘s repute.

1.2.2 Managers/Employees


They will handle others as they want to be treated – with regard, self-respect and equity. They have the right to work in an environment free from favoritism and torment based on race, colour, faith, sex ( including gestation, childbearing or related medical conditions ) , sexual orientation, gender individuality, national beginning, lineage, societal beginning, age, disablement, matrimonial position, veteran position or other protected features. They besides respect their colleagues ‘ rights, and retrieve that such favoritism and torment will non be tolerated. They should talk out when the behavior of a coworker makes them or others uncomfortable. They each have a duty to describe to Human Resources any such torment or favoritism that they experience or observe.


Mattel recognizes diverseness as an plus, and is committed to actively seeking and advancing diverseness in the work force. They value the different positions, penetrations and experiences of diverse persons and civilizations, and they aspire to make a company civilization that encourages an look of, and a regard for, diverse point of views. They provide equal employment chance for all appliers and employees, without respect to factors such as race, colour, faith, sex ( including gestation, childbearing or related medical conditions ) , sexual orientation, gender individuality, national beginning, lineage, societal beginning, age, disablement, matrimonial position, veteran position or other protected features. They make employment determinations to run into their concern demands based on factors such as makings, accomplishments and accomplishment. They comply with local and national employment Torahs.

Employee Health and Safety

Mattel is committed to supplying a safe, healthful and environmentally responsible workplace, and has established safety plans to supply information and preparation for safe patterns in the normal behavior of concern and for exigencies. They are responsible for detecting safety and wellness regulations, for taking appropriate precautional steps and for describing insecure or risky conditions to their supervisors, to Mattel ‘s Global Sustainability Department, Global Security Department or local Mattel security forces.

In order to keep their high criterions for quality, productiveness and safety, they should be in suited mental and physical status at work. Possessing, purchasing or merchandising, utilizing or being under the influence of illegal drugs or prosecuting in any other activities which create an insecure work environment while on responsibility, or when on Mattel premises, are expressly prohibited. The ingestion of intoxicant while on responsibility or when on Mattel premises is forbidden except during sanctioned Mattel societal maps, or during concern repasts.

1.2.3 Investors/Shareholders

Protecting Mattel Assetss

All employees and Directors portion in the duty to protect Mattel ‘s assets, including physical assets, fiscal assets, rational belongings and proprietary information from larceny, loss, harm, abuse or waste. Those of them who have detention of company belongings, such as vehicles and laptop computing machines, should take appropriate steps to guarantee their proper security and usage.

Company assets should non be used for illegal intents, or for personal benefit ( except every bit may be allowed in company-approved compensation agreements ) . Incidental personal usage of company assets, such as telephones, personal computing machines and run offing machines, is permitted every bit long as such usage does non interfere with the employee ‘s responsibilities, is non done for pecuniary addition, does non conflict with Mattel ‘s concern and does non go against any Mattel policy or applicable jurisprudence. The security of computing machine systems and electronic informations should be protected by leting entree merely by authorised individuals, and by decently utilizing watchwords.

Committednesss and Outgos

Mattel has established policies that grant authorization and set up reappraisal and blessing demands for committednesss and outgos. These guidelines apply to all fiscal outgos ( including capital outgos ) , and to all understandings that commit Mattel ‘s resources and specify its concern activities. Licensing understandings, joint venture or other strategic understandings, and contracts for the battle of services, investings, acquisitions, or the rental or sale of corporate assets are illustrations of committednesss capable to these guidelines. Lone officers of Mattel ( by and large those holding a rubric at or above the Vice President degree ) are authorized to come in into understandings on behalf of Mattel, and this authorization is to be exercised merely in conformity with the guidelines. They are each responsible for being familiar with these guidelines, understanding the range of our authorization, and guaranting that they do non do committednesss ( including unwritten committednesss ) that exceed their authorization.

Intellectual Property and Confidential Information

Mattel ‘s rational belongings, including hallmarks, tradedress, trade names, right of first publications, patents, cyberspace sphere names and similar rights or involvements are among its most of import assets. Improper usage of rational belongings in advertisement, packaging, correspondence and contracts can gnaw Mattel ‘s rights. Questions sing the proper usage of Mattel ‘s rational belongings are governed to the Law Department.

Confidential information is any information non by and large known to the populace that is utile to Mattel, that would be utile to its rivals or other 3rd parties or that would be harmful to Mattel or its clients if disclosed. Confidential information includes gross and net income information and projections, information sing possible acquisitions, divestitures and investings, new merchandise information, selling programs, design and development attempts, fabrication procedures, and other trade secrets. Employees and Directors should non discourse confidential information with those who are non obligated to keep the information in assurance or in public topographic points where the information is non likely to be kept secret, such as planes, eating houses and lifts.

In position of the competitory nature of Mattel ‘s concern and the important impact of the larceny or unauthorised usage of Mattel ‘s rational belongings on Mattel ‘s concern and consumers, the protection of Mattel ‘s rational belongings is one of the most of import duties of employment with Mattel. This duty continues even after employment terminals. Mattel recognizes and respects rights in rational belongings and confidential information owned by 3rd parties. Mattel ‘s employees should protect the confidential information of 3rd parties from larceny, abuse or unauthorised revelation with the same grade of attention used to protect Mattel ‘s confidential information.

Insider Information and Securities Trading

Employees and Directors who have entree to confidential information are non permitted to utilize or portion that information for intents of merchandising securities of Mattel or any other company, or for any other intent except the behavior of our concern. All non-public information about Mattel and non-public information about Mattel ‘s concern spouses obtained in the class of employment at Mattel should be considered confidential information. To utilize such information for personal fiscal benefit or to “ tip ” others who might do an investing determination on the footing of this information is non merely unethical, but besides illegal. Employees and Directors should be familiar with and follow Mattel ‘s Insider Trading Policy, and should reach the Law Department with any inquiries.

Communicationss with Investors

To guarantee conformity with the securities Torahs, it is Mattel ‘s policy that merely certain designated officers and Directors designated from clip to clip are authorized to pass on with investors and securities market professionals, including agents, analysts and other market professionals on any capable relating to Mattel concern. No other employees or Directors are to prosecute in any such communications and they should mention all petitions for information to the Investor Relations Department.

Accuracy of Company Records, Public Reports and Communications

Mattel is committed to supply full, just, complete, accurate, seasonably and apprehensible revelation of information, including fiscal information, in studies filed with the Securities and Exchange Commission and other public communications, in conformity with applicable Torahs, regulations and ordinances. Financial books, records and histories are maintained in sensible item, accurately reflect minutess and events and conform to applicable legal and accounting demands and to Mattel ‘s system of internal controls. In order to carry through their duty for sound decision-making, they require honest and accurate recording and coverage of concern information and minutess, including quality, safety and forces informations records, every bit good as fiscal minutess and records. Disproof of any record or fiscal study, such as quality and safety informations, clip studies or disbursal studies, will ensue in immediate disciplinary action.

Recording and Retaining Business Communications

Communicationss ( even those they may see “ private ” or “ personal ” ) may go public, so all correspondence should be clear and accurate. They avoid hyperbole, unsuitably colourful linguistic communication, derogative word pictures and, except for members of the Law Department, legal decisions. These guidelines apply to communications of all sorts, including electronic mail. They follow Mattel ‘s records keeping policies and processs, and in conformity with those policies they should reach the Law Department in the event of judicial proceeding or authorities probe.

1.2.4 Operations/Processes

Making Business With Others

They are committed to spread outing and bettering Mattel ‘s concern through concern confederations, including clients, providers, sellers, subcontractors, licensees, agents, joint ventures, etc. They will construct productive relationships with concern spouses based on unity, legal and ethical behaviour and common trust. They seek to make concern with clients and providers who reflect the diverseness of the worldwide community in which they operate. Any individual who acts, or who could be perceived as moving on Mattel ‘s behalf should be made cognizant of Mattel ‘s Code of Conduct.

Integrity, ethical behaviour and common trust should be of import standards when measuring and choosing their concern spouses. They seek to make concern with parties who enjoy a history of ethical behaviour.

Fair Covering

Employees and Directors should endeavour to cover reasonably with Mattel ‘s clients, providers, rivals and employees. We should ne’er take unjust advantage of anyone through use, privacy, maltreatment of privileged information, deceit of material facts or any other unfair-dealing pattern.

Responsible Manufacturing and Distribution Practices

Mattel ‘s Global Manufacturing Principles ( GMPs ) are the basis of their on-going committedness to responsible fabrication and distribution patterns around the universe. These criterions apply to all parties that industry, assemble or distribute any merchandise or bundle bearing the Mattel logo.

Mattel ‘s GMP includes some of the most elaborate and comprehensive criterions in the consumer merchandises industry. Detailed criterions have been developed for each of the chief states in which Mattel conducts its fabrication and distribution operations. The criterions turn to a broad spectrum of issues associating to life and on the job conditions. They serve as the standards harmonizing to which Mattel ‘s internal and independent monitoring plans operate around the universe. Mattel works closely with its concern spouses to guarantee conformity with the GMP.

Buying Practices

All providers should be treated in a just, ethical and impartial mode. All determinations sing providers and sellers of goods and services should be made on the footing of factors such as suitableness, quality, monetary value, and bringing. Persons involved in the reappraisal and choice of possible providers, sellers and services suppliers must be diligent in avoiding actions that convey or imply that determinations will be influenced by favours or grants, or by personal or household relationships.

1.2.5 Community/Social Duty

Community Service

Mattel is committed to bettering the communities in which it operates through Philanthropy plans supported by Mattel and accomplished by voluntary attempts of Mattel employees. As a company, Mattel works to better the lives of kids in demand through a assortment of attempts, including corporate fiscal and merchandise parts, organized employee voluntary activities and through plans administered by the Mattel Children ‘s Foundation.

Environment and Sustainability

Mattel is committed to protecting the wellness and safety of its employees, every bit good as minimising their impact on the environment. Mattel strives to be a responsible citizen in the communities in which they operate. As portion of this committedness, they follow environmental Torahs and ordinances applicable to their operations worldwide, and integrate environmental, wellness and safety criterions into their concern operations to cut down hazards, minimise impacts and strive to supply a safe, incident-free workplace.

Communication to the Media

In order to guarantee that the information provided to the populace is accurate and consistent, all communications to the media should be coordinated with Corporate Communications. They should non prosecute in conversations with the media without anterior mandate from Corporate Communications, and if contacted by a member of the media should mention enquiries to Corporate Communications.

1.2.6 Financials

In 2008, Mattel received over $ 5.9 billion in net gross revenues, down 1 % from 2007, mostly due to falling consumer disbursement during the U.S. recession.

Mattel ‘s grosss have grown at a compound one-year growing rate ( CAGR ) of 3.7 % since 2004, when entire grosss were $ 5.1 billion.

Gross border has fallen from 49.0 % in 2003 to 45.4 % in 2008, due to a combination of monetary value force per unit areas from retail merchants and increasing input and distribution costs related to trade good and oil monetary values.

In 2007, Mattel ‘s repute took a major hit when the company recalled 967,000 playthings due to issues with lead pigment in the merchandises. The house stopped two-thirds of the merchandises from making consumers, but over 300,000 points were bought by consumers in the United States. The merchandises were manufactured by a Chinese sub-contractor but several cases have been brought against Mattel for the incident, in add-on to multitudes of bad imperativeness.

If classified as trade names of merchandise, part to gross revenues is as below:

Mattel Boys & A ; Girls Brands ( 56 % of gross revenues ) : This section includes most of Mattel ‘s traditional merchandises and licencing understandings from other companies such as Disney ( DIS ) , Time Warner ( TWX ) , and DC Comics. The Girls trade names include: Barbie, Polly Pocket, and Disney Classics. The Boys trade names include: Hot Wheels, Matchbox, Tyco R/C trade names, and licensed DC Comics merchandises such as superhero action figures. This class besides includes Radica Games, an electronic game shaper acquired by Mattel in 2006. This section experienced a 2 % diminution in gross gross revenues during 2001.

Fisher-Price Brands ( 37 % of gross revenues ) : This section includes merchandises designed for younger kids. The nucleus trade names within this class include: Fiscer-Price, Little People, BabyGear and View-Master. The Fisher-Price section besides includes accredited merchandises from Nickelodeon ( Dora the Explorer and Go-Diego-Go ) , Sesame Street, and Disney ( Winnie the Pooh ) . Gross gross revenues for the Fisher-Price group increased 1 % worldwide during 2001.

American Girl Brands ( 7 % of gross revenues ) : American Girl operates as a subordinate of Mattel and sells most of its merchandises straight to clients entirely in the U.S. , although Mattel operates a smattering of American Girl doll retail shops throughout the state. American Girl merchandises include a scope of dolls, books, apparels, playthings, and accoutrements for misss aged 3 and up. American Girl gross revenues increased 7 % in 2008, mostly driven by the summer 2008 release of the movie Kit Kittredge: An American Girl which led to increased gross revenues of dolls and merchandises related to the film.

On the other manus, Mattel divides its concern into two primary sectors: Domestic/North America and International. Mattel merchandises are sold straight to retail merchants in most European, Latin American and Asiatic states ; in Australia, Canada and New Zealand, its merchandises are sold through agents and distributers ( Mattel has no direct gross revenues presence ) . Except for American Girl, which is non sold internationally, Mattel offers the same merchandises in both domestically and abroad. It does tailor merchandise mix to regional crazes and the quality is varied due to monetary value sensitiveness.

Mattel ‘s international gross revenues accounted for 49 % of its gross gross revenues in 2001. Europe, which accounted for 27 % of 2007 gross revenues, is Mattel ‘s largest market outside of North America. In 2008, domestic gross revenues fell 2 % while international gross revenues were merely down 1 % , as gross revenues in each part differed: Europe ( -6 % ) , Latin America ( +7 % ) , Asia Pacific ( +4 % ) .

Based on this six-criterion balance scorecard, we have exhaustively and comprehensively reviewed the schemes and patterns of Mattel. Next, we will turn to some dirts and differences happened in the past few old ages which posed a challenge to the schemes of Mattel.

1. The Learning Company acquisition

In May 1999, at the tallness of the bubble Mattel acquired The Learning Company for $ 3.5 billion in stock or 4.5 times one-year gross revenues. The Learning Company was considered at the clip one of the prima amusement and educational package companies, proprietor of such rubrics as Reader Rabbit, Carmen Sandiego, Myst, Riven and National Geographic but had in 1997 accrued losingss of $ 475 million. Mattel thought that this acquisition would assist concern variegation by giving the company a taking place in the market of consumer package. Mattel CEO Jill Barad expected to hold direct cyberspace gross revenues for all Mattel ‘s playthings and predicted that Mattel gross revenues over the Internet would make $ 1 billion in a few old ages.

In the 3rd one-fourth of 1999, Mattel expected The Learning Company to post $ 50 million in net incomes but in world it posted losingss of $ 105 million. Despite this loss, CEO Jill Barad continued to be optimistic. Thingss worsened in the 4th one-fourth, as The Learning Company ‘s pre-tax losingss reached $ 183 million. For the twelvemonth The Learning Company ‘s pre-taxes losingss were $ 206 million, on grosss of $ 750 million. The Learning Company ‘s losingss depressed Mattel ‘s 1999 net incomes and as a consequence, Mattel posted a $ 82 million net loss compared to a $ 206 million net income in 1991. Mattel besides warned that it would take a revamping charge of $ 75 million to $ 100 million in the first one-fourth of 2000 because of The Learning Company.

By 2000, Mattel was losing $ 1.5 million a twenty-four hours with The Learning Company, and Mattel ‘s stock monetary value ( which reached a high of $ 45 in March 1998 ) traded at $ 11 in February 2000. Under force per unit area on February 3 Mattel ‘s CEO Jill Barad resigned but received a $ 50 million rupture bundle. In April Mattel announced that it was selling The Learning Company, analysts predicted that The Learning Company could be sold for $ 400 million, so for $ 200 million. In the terminal, in October, The Learning Company was sold to Gores Technology for nil other than a per centum of The Learning Company ‘s future net incomes. In add-on Mattel fired 10 % of its work force to farther cut costs. As a consequence of this reconstituting Mattel posted a net loss of $ 430 million for the twelvemonth 2000.

2. Toxic Toys Scandal

On August 2, 2007, Mattel ‘s Fisher-Price subordinate recalled about one million Chinese-made playthings, including Dora the Explorer and Sesame Street playthings, because of possible jeopardies from parts of the playthings which were colored utilizing lead-based pigment that may hold exceeded the US Federal bound of 600 portion per million. In worst instances, Mattel toys ‘ lead in pigment was found to be 180 times the bound. The pigment on the plaything was up to 11 % lead, or 110,000 parts per million. U.S. Federal jurisprudence allows merely 0.06 % lead, or 600 parts per million. Children who suck on or consume playthings or jewellery with high lead content may be poisoned, which can take to larning and behavior jobs, even decease in some instances.

On August 14, 2007, Mattel recalled over 18 million merchandises because it was possible that they could present a danger to kids due to the usage of strong magnets that may detach. Strong little magnets could be unsafe to the kids if two or more were ingested, pulling each other in the bowels and doing harm. Some cases were reported. A kid swallowed a Polly Pocket plaything magnet and had to undergo a surgery. At the clip of the callback, none of the American or European safety statute law and criterions addressed the specific jeopardy of strong magnets. Some of the merchandises had been available in U.S. shops since 2003, during which clip Mattel did non see them harmful plenty to justify a callback. After incidents with similar magnetic plaything parts being swallowed, doing perforation of the bowels, Mattel re-wrote its policy on magnets, eventually publishing this callback in August 2007.

Recalled points included die-cast Cars character, Sarge, made between May and July 2007, found to hold been manufactured utilizing pigment incorporating higher than acceptable degrees of lead ( 436,000 recalled globally ) , 7.1 million Polly Pocket toys produced before November 2006 ; 600,000 Barbie and Tanner Playsets ; 1 million Doggie Daycare ; Shonen Jump ‘s One Piece ; and 1000s of Batman Manga toys due to open magnets. 11.2 million points were recalled in entire.

Zhang Shuhong, co-owner of the Lee Der Toy Company, which had made a figure of playthings for Mattel, committed self-destruction by hanging himself at one of his company ‘s mills in Foshan on August 11, 2007, harmonizing to governments. In the mill ‘s burden bay, the BBC ‘s Quentin Somerville found boxes of playthings made for Mattel and Fisher-Price traveling nowhere. The Lee Der concern was shuting for good.

On September 4, 2007, Mattel recalled a farther 530,000 affected playthings in the United States — and 318,000 outside the United States — after its intensive testing found that the Chinese-made merchandises contained degrees of lead in painted parts that were above the acceptable bound set by the company. This 3rd callback in a month included accoutrements for Barbie dolls and Fisher-Price playthings.

June 5, 2009 the Consumer Product Safety Commission fined Mattel and its ‘ Fischer-Price division $ 2.3 million dollars for misdemeanor of Code 16 of Federal Regulations CFR 1303, the Federal lead pigment prohibition. While Mattel agreed to the mulct, no incorrect making was admitted on the companies ‘ portion.

Such intelligence did hold enormous consequence on Mattel. Mattel is now faced with worsening market portion and level gross revenues of its nucleus plaything. After the callbacks have been announced by Mattel playthings, some parents are chew overing a Mattel plaything boycott. Four corporations won Bad Product Awards this twelvemonth, viz. Coca-Cola, Kellogg ‘s, Mattel and Takeda. The universe federation of consumer organisations, Consumers International ( CI ) announced the victors of the International Bad Product Awards, to be presented at CI ‘s World Congress in Sydney, Australia, 29 Oct – 1 November 2007. Among others, Fortune magazine rated the callback of Mattel ‘s merchandises as one of the ‘Dumbest Moments ‘ in concern for 2007.

Because of these dirts, Mattel has increased audits and proving of all merchandises. In August 2007, CEO Robert Eckert said, “We were allow down, and so we let you down, ” mentioning to the three monolithic merchandise callbacks for lead taint of pigment.

On September 21, 2007, Mattel ‘s Executive Vice-President for world-wide operations, Thomas Debrowski, traveled to Beijing. In a meeting with China ‘s merchandise safety head, Li Chanjiang, Debrowski took full duty for the magnet callbacks and said that, “vast bulk of those merchandises that were recalled were the consequence of a design defect in Mattel ‘s design, non through a fabrication defect in China ‘s manufacturers.” Reading a prepared text, he continued, “Mattel takes full duty for these callbacks and apologizes personally to you, the Chinese people, and all of your clients who received the toys.”

Apart from these dirts, some of the cases affecting Mattel are as follows:

  • Keller Rohrback L.L.P. Files Suit Against Mattel, Inc. for Selling Toys Covered in Lead Paint.
  • Mattel Lawsuit Seeks Lead Tests for Children.Class action wants toymaker to pay for medical testing.
  • Family files suit against shaper of Polly Pocket after boy undergoes surgery.
  • Mattel against Winx Club.
  • Stockholders File Lawsuit Against Mattel Over Toy Recalls.
  • Mattel sued the set Aqua, stating they violated the Barbie hallmark and turned Barbie into a sex object, mentioning to her as a “ Blonde Bimbo. ” The case was eventually rejected in 2002.
  • Mattel is presently involved in legal proceedings with Super Duper Publications in an effort to stamp down Super Duper ‘s usage of the words “ and state ” in their therapy merchandises. Super Duper Publications specializes in stuffs for usage in particular instruction schoolrooms but Mattel accuses Super Duper of seeking the dilute their “ See N ‘ Say ” merchandise line.
  • Mattel won the legal conflict against Super Duper Publications and was awarded $ 400,000 in punishments. They are now seeking 1000000s of dollars to pay for their legal disbursals and costs.
  • Mattel Inc. defeated MGA Entertainment Inc. in a struggle over the creative activity of the Bratz doll line. The U.S. District Court in Riverside ruled that Bratz interior decorator CEO, Carter Bryant, violated the footings of his exclusivity contract with Mattel. It was decided that he created the Bratz doll construct while he was working for Mattel. This determination will take to the possibility for Mattel to claim right to the Bratz doll line every bit good as the right to have amendss.
  • Mattel Inc VS Playing Mantis. In the mid 1990 ‘s Playing Manits released a line of rechargeable autos which were a direct transcript of the 1970s Mattel Hotwheels Sizzlers with the same name. The ware was rapidly removed from shop shelves. Mattel won the instance, nevertheless the payout from Playing Mantis remains unknown. Since Mattel has re-released its ain line of Sizzlers through an sole trade with Target Stores.

In decision, Mattel has made many good policies and patterns in making concern, nevertheless, it has violated its ain codifications of pattern due to incorrect determination and carelessness. As in the instance of The Learning Company acquisition, in fact, the ex-CEO had made a really incorrect determination and scheme to diversify into an industry that it is non familiar with. Besides, without taking cautious and complete planning, geting a failing company had caused a net loss of few one million millions to Mattel. Such error, of class, reduced the assurance degree of investors and posed portion monetary value of Mattel dropped more than 75 % ( from $ 45 to $ 11 ) .

From the instance of toxic playthings, we besides see that Mattel is negligent in merchandise quality control and safety testing. Until the first eruption of poisoning instance, Mattel merely realized the jobs associated with its merchandises. Such a dirt had severely struck the assurance of clients and public. In fact, until now, many parents are still dubious of the safety of its plaything merchandises. From ethical facet, Mattel did non acknowledge their carelessness and mistake in bring forthing toxic and unsafe playthings. They claimed that these were the mistakes of China manufacturers. Finally, it was proven that the dirts were caused by design defects from US, non entirely because of China manufacturers. Subsequently, CEO of Mattel, under public force per unit area, openly apologized to China people and clients.

From these incidents, we learnt that, no affair how good the planning and schemes are, without proper execution and control from company ‘s direction, everything is in vain when company lost its trust in the eyes of public, particularly clients, investors and the community.