Mattel Case Study Analysis: Managing Product Recall (Case Study Sample)
Read the article Mattel's Strategy after It's Recall of Products Made in China in the Harvard School reading package you purchased earlier this semester. If you were the CEO of Mattel:
• How would you manage the recall? Explain
• What would your communication strategy be? Explain.
• What would you do to insure Mattel's success and position for the future?
Half to one page executive summary.
RE: Mattel Case Study Analysis
Mattel Case Study Analysis
Mattel, the largest toy producer in the world, had to deal with a product recall due to safety concerns. Some of the firm’s suppliers utilized paints with high quantity of lead in the manufacturing, thereby risking the health of the users. To manage the product recall process, the firm should have created a team to oversee the activity. It should also have identified the problem early enough, engaged all the key stakeholders, and disseminated the recall notices effectively. The communication strategy to be implemented ought to have entailed establishing the objectives, defining the audience, choosing the key messages, and choosing the right communication channels. Finally, it is recommended that Mattel should adopt an in-house production strategy to avoid the risk of unsafe products. To compete effectively, it should also implement the differentiation strategy in order to attract clients based on the uniqueness of the toys rather than the pricing alone.
The case study reports of a dilemma facing Mattel, the biggest toy producer in the world, in the wake of product recalls due to safety issues. Like other manufacturers, the company outsourced most of its production to developing nations as a way of reducing costs and improving competitiveness. In 2007, it produced 65% of its products in China (Jiangyong, Zhigang, and LinHui). However, in contrast to other competitors that outsourced most of their production, Mattel owned and operated some plants in order to control the safety of the toys. Still, controlling product quality and safety in countries such as China is difficult. In the summer of 2007, the company was forced to recall some of the toys produced in the country because the paint used in the production contained too much lead (Jiangyong, Zhigang, and LinHui). Besides affecting its reputation, the recalls led to a dip in sales. As a result, the CEO of the company has to make a decision regarding whether to enhance in-hour production or shift the manufacturing to other nations to spread risks.
Managing Product Recall
While errors do happen in the course of running a business, it is essential for the leadership to possess the right skills to remedy the situation. To manage the recall of Mattel’s products, a number of strategies could have been implemented. Firstly, it is necessary to create a team that would oversee the process of recalling. In practice, the team should make decisions swiftly since there are often time constraints. Similarly, in the case of Mattel, it would have been advisable to set up a recall team to oversee the process.
A second strategy would entail identifying the problem early enough before the defective products reach the customers. In the case study, more than three hundred thousand toys had been bought by the clients when the recall was effected. Evidently, the company was slow in making a decision regarding whether to recall the products. Essentially, issuing a recall early enough reduces the chances of the defective products reaching the clients and causing harmful effects to the users. More importantly, it shows that the organization is proactive and is genuinely concerned about them. Clearly, Mattel should have recalled the products earlier.
Thirdly, it would have been essential to engage all key stakeholders. Internally, it is vital to inform internal stakeholders regarding the recall. Essentially, employees should be knowledgeable regarding answering customer complaints. In a normal organizational setting, it is the workers who interact with the clients and provide services to them. Another essential group of stakeholders encompasses stockholders and owners. For this group, their concern is likely to center around the impact of the recall on profitability and the overall organizational performance. As a result, the management should communicate to them the plans that it has to rectify the situation. Finally, the company should also cooperate with the government, especially the US Congress, as it investigates the matter. Being open, transparent, and accountable would reduce misinformation and make the public understand the firm’s situation.
Furthermore, the company should have promptly and extensively disseminated the recall notices. Considering that Mattel’s client base is broad, it is possible that some people who had already purchased the products did not know about the recall. Therefore, the company could have used a wide range of communication channels, such as television and online advertisements, to communicate with the clients. More importantly, the firm should have collaborated with the sellers to create drop-off points. Finally, Mattel ought to have engaged the manufacturers to explore ways of preventing the reoccurrence of the problem in the future.
As highlighted in the section above, communication is essential when handling product recalls. When implemented effectively, it can help build investor confidence and preserve customer loyalty. It can also reduce regulatory ramifications and prevent employees from leaving. The communication strategy that is ideal in the case of Mattel would be composed of four vital steps. The first action is to establish the goals of the recall. The recall team formed should examine what it wants to achieve through its communication initiatives. One of the key goals could be to inform the clients about the product recall and facilitate them as they return the products they had already purchased. The second objective would be to reassure the public, including current and prospective clients, concerning the firm’s commitment to product safety. Besides, the communication could also be aimed at partnering with the media to prevent misconceptions and misinformation.
The second component of the strategy would be to define the target audience. The key stakeholder groups include the clients, media, government, manufacturers, and employees. Each of them should be introduced to particular aspects of the communication. For example, the employees would want to know the impact of the recall on their jobs. Similarly, the clients would want to know the initiatives that the organization is doing to avert the adverse consequences associated with the unsafe products. The third component encompasses choosing the key messages. The last component of the communication strategy is the selection of the channels of communication. Essentially, each channel is suited to particular audience. Internally, the recall team can use memos to communicate with employees and the top management. Television advertisements, press releases, and social media communication are ideal for communicating with external stakeholders.
As the recall team communicates with the diverse audience, it should deliver three essential elements: consistency, clarity, and control. Whenever an organization experiences a crisis, every communication it dispatches is continually analyzed. If there are inconsistencies, the media and the general public would start questioning the genuineness of the company. To enhance clarity, it might be necessary for the organization to have a spokesperson. Generally, ambiguities lead to more questions. Lastly, all the information that goes to the key audience should be controlled. Sometimes, the media might report something falsely. As a result, the company ought to correct such misinformation as soon as possible.
Analysis and Recommendations for Future Success
The internal analysis of Mattel shows an organization with the capability to succeed. According to the case study, the firm is the biggest toy producer in the world (Jiangyong, Zhigang, and LinHui). In 2006, the company posted an annual turnover of $5.65 billion and sold about eight hundred million toys (Jiangyong, ...
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