Jill Barad’s strategy for Mattel

Case Study

Submitted to

Submitted by

Asma Wali

Sikander Ali Khan

Waqas Ali Babar

Osman Khan

Haider Maqsood
Q1. What was Jill Barad's primary goal for Mattel in 1996? What strategy did she choose in
order to pursue these goals?

Answer:

The primary goal of Jill Barad for Mattel was to increase earning per shares by 15% per annum
compounded before the effects of any acquisitions. There are different elements of her strategies
used which are the following:

 Continue with the highly profitable practice of extending the company's existing brands
(e.g. she had plans to further develop a line of collectible Barbie dolls)
 Develop new product categories, particular in boy's toys and board games where Mattel
had traditional been weak. It could be accomplished through internal product
development or by acquiring an emerging company and then growing its business
through further investments.
 Expanding overseas market sales to more than 50% of Mattel's total
 Cost reductions by outsourcing production to low-cost foreign factories in places such as
China.

Q2. Why did Barad's strategies fail to generate the profit growth she had planned? Could better
planning have helped Barad anticipate market trends?

Answer:

Parents were buying fewer toys and shifting their spending to computer software and video
games for their children, parents were shifting the spending to competing dolls such as Pleasant
Company's highly successful line of American Girl dolls, as Disney's most recent animated
movies had been less successful than expected, the related toy sales had suffered accordingly and
the popularity of the Barbie brand had declined, partly because the changing fashions.

Strategies, if planned out well, most definitely ensure success; meaning more profit and market
share. If Jill Barad if reviewed the statistics earlier, she would have known and understood the
market trend and formulated a strategy that would have helped her in achieving her goal.
Q3. Could better decision-making techniques have helped Barad avoid the decline in sales of
Holiday Barbie?

Answer:

Of course, better decision making techniques would have definatley helped Barad avoid the
decline in sale. Barad should have never ordered the extra 1 million. In fact, if the production of
the Holiday Barbie has been kept the same and the price of the holiday Barbie had been
increased a bit more, to say $40, its collectable value would have increased and the shelves
would have been clear for new orders.

Q4. How would you describe Mattel’s strategy as of mid 1999? Does this strategy make sense,
given the changing conditions in the toy market? Would you describe this as an emergent
strategy or a planned strategy?

Answer:

Mattel’s Strategy as of mid 1999 was a very wise strategy that it developed in terms of the
changing conditions in the toy market as people were expecting, and so, demanding more of
technological changes in almost everything, which most definitely included toys. The on-line
venture was a very “in-time” decisions in view as people’s lives had started going ‘online’ and
that was growing into a huge market waiting to be tapped. The alliance with Intel was also a new
idea and most definitely a great competitive advantage. Laying off 3,000 jobs is a huge thing but
it’s something that almost all of the companies do to overcome financial crunches, and so it has
its good and bad sides.

Coming towards the planned or emergent strategy, from the literal meaning of the two terms, it
can be said that the strategy of mid 1999 was a mixture of both Emergent and Planned strategy.