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Mattel's Strategy after its Recall of Products Made in China  
Product Ref: 09/422C Company: Mattel Inc.

Product Type: Case Industry: Leisure products

Related Product(s): Teaching Note
Authors: Jiangyong Lu   Yu Linhui   Zhigang Tao   Grace Loo
In the summer of 2007, Mattel, the largest toymaker in the US, made several recalls of products that had been made in China. The recalls led not only to a sharp reduction in Mattel's sales but also to public hearings in the US Congress, which significantly affected Mattel's reputation. Like other toymakers, Mattel has been relocating its production abroad, outsourcing the manufacture of parts and components. Indeed, 65% of Mattel's products are made in China. In contrast to its competitors, however, Mattel has understood the importance of quality control in this relocation/outsourcing process. In the 1980s, it reversed its earlier strategy of outsourcing to factories in Asia by owning and operating some plants in Asia for producing its most popular products. The product recalls show that quality control continues to be an issue. This case explores Mattel's strategy for organising production, the trade-offs between in-house production and outsourcing, and the trade-offs between different production locations.
Functional Area : Production & Operations Management
Strategy & General Management

Issues: Outsourcing, product safety, manufacturing in China
Length: Text: 8 pages
Exhibits: 1 pages
Country: China (People's Rep. of)

Pub. Year: 2009 Level of Difficulty: 1
This product type is available in the following language(s):      English
Related Information: N/A
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