How Mattel's Barbie Knocked Out the Bratz Doll

Read the case below and answer the questions to the right.

The global toy industry is a very competitive environment and accounts for $10 billion a year in sales. Mattel, the world's largest global toy company, has earned billions of dollars from the world's bestselling doll, Barbie, which was introduced over 50 years ago. Barbie became an American icon and was enjoyed by generations of girls. Barbie and Barbie accessories accounted for almost 50% of Mattel's toy sales by 2000. However, cultural views changed in recent decades and shifted the tastes and preferences of doll buyers. Mattel managers unfortunately did not recognize those changing tastes and preferences and were not positioned to respond to the threats of competitors. Mattel managers continued to pursue the same strategy with Barbie and left the brand unchanged. Mattel instead focused on developing new kinds of digital toys and games to respond to the growing interest in electronic products.

A new kind of doll, the Bratz doll, was introduced by the MGA Entertainment company. The Bratz doll appealed to “tweens,” girls aged between 7–11 who were brought up in a fast-changing fashion and digital music age. The Bratz dolls were licensed by MGA to be manufactured and sold to companies overseas and became a big competitor to Barbie. The Bratz dolls had larger heads and oversized eyes, wore lots of makeup and short dresses and were multicultural.

Mattel responded by making big changes to try to appeal to the change in customer preferences. Mattel eliminated the Ken doll, Barbie's long-standing boyfriend, and created a replacement called Blaine, an Aussie surfer. Mattel also rushed to develop the My Scene line of dolls in 2002 to compete with the Bratz dolls and introduced the Flava line to appeal to even younger girls. Mattel managers also made changes to Barbie's looks, clothing, and accessories, but sales of Barbie continued to fall and dropped by 30%. Due to falling sales, Mattel later brought the Ken doll back, but problems continued to mount.

Mattel brought a lawsuit against MGA Entertainment, claiming that the Bratz dolls' copyright was rightfully theirs. Mattel claimed that the initial drawings of the Bratz doll was made for Mattel, and that MGA hired key employees who stole sensitive sales information away from Mattel. In 2008, a judge ruled in favor of Mattel and awarded $100 million in damages. MGA appealed the ruling, but in 2009 a federal judge upheld the verdict and ruled that the Bratz doll belongs to Mattel and ordered MGA to stop selling the doll. A major competitor was eliminated, but Mattel was not out of the woods.

1. Describe Mattel's internal organizational strengths as indicated in the case.

2. Describe Mattel's internal organizational weaknesses as indicated in the case.

3. Describe the threats that Mattel faced in the global competitive environment.

4. Describe one opportunity that existed for Mattel in the global competitive environment.

5. How could Mattel have improved their competitiveness in the global toy industry?