The Barbie dolls accounted for 50% of all Mattel’s toy sales in the 1990s. As a result, the company needed to protect this product. Mattel was so ingrained in protecting the Barbie doll brand that it ended up underestimating how much the global market had changed, specifically regarding women’s role. The Barbie dolls were created in the 60s, at a time when the woman’s role was babysitters and homemakers. The ideal woman was voluptuous in shape, and this informed the global perceptions of a perfect woman. However, the world was changing faster, and so was the role of the woman, girls, sex, marriage, and the female now getting their jobs and assuming new roles. This cultural change also saw tastes and preferences change, and as such, women and girls had changed the perception of what a beautiful doll should look like (Nash and Duvall, 2005). The doll buyers’ tastes had changed, but Mattel stuck to its old approach that ‘ if it’s not broken, don’t fix it ’ approach. Mattel thought that changing how the Barbie doll looked would be dangerous, considering that the customers may end up not liking the new product. Instead, they chose to keep everything the same, refusing to change the brand or business model even when they knew that things were changing. They instead focused on developing new digital products. However, new entrants came to the market with the Bratz dolls, which was more appealing to the girls, and the product was quickly licensed to sell in the overseas market.
The world is changing rapidly, which is forcing the strategic managers in different kinds of companies to hasten their decision-making. The more agile and adaptive companies leave behind companies that delay or lag in making decisions to the environment by responding much faster to the customer’s changing needs and fashions demands. This is perfectly true and actionable in the global toy sector, where there is vicious combat in the doll business valued at a sale of more than $10 billion annually. Mattel is one of the largest toy companies, and it earned tens of billions of dollars from the Barbie doll, the world’s best-selling doll since it was introduced half a century ago (Okatan and Alankus, 2019). In their childhood, the mothers who played with this doll bought the doll for their daughters, and their daughters, in turn, bought it for the granddaughters, and with time it was the American icon doll. However, the Barbie doll’s strength as the world’s leading and best-selling doll saw the company managers make tough strategic decisions in the 2000s.
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The fear of embracing change led to a delay in implementing the necessary changes to the business model. Changing the Barbie doll model to meet the changing customer needs was the reason for Mattel’s slow-paced decision-making. The competitor read the market, and it reacted faster as Mattel was ignorant of the need to change its product as the Bratz dolls were born, introduced to the market by MGA Entertainment. Many other competitors emerged during this time, but Mattel was still adamant at changing its main product because it was still profitable. The Bratz doll line of product manufacturers did a good job in terms of researching what the new generation girls preferred, targeting girls aged between seven and eleven years. With time, the girls embraced the new dolls, and it was now the new thing in the market. The Bratz dolls featured bigger eyes and heads, they wore lots of makeups and short dresses, and they came in different sizes, colors, attitude, and were multicultural. MGA moved quickly and licensed the rights to manufacture and sell the new dolls to toy firms overseas. The Bratz doll was now a major threat to Mattel, and it was too late even as Mattel struggled to correct things.
Mattel failed to realize what its competitor was doing, and the Bratz dolls got to the market by surprise. Mattel decided to make changes to the Barbie dolls too late, and this waiting too long to innovate new products that met the market demands saw its competitor ahead. Mattel did not invest in Research and Development, and as such, it failed to pay attention to the customers’ fast-changing needs. Mattel was now in trouble. The strategic managers were now under pressure to alter its business strategies and model and to update the Barbie dolls. The Mattel designers were regretting at this time that they should have been adventurous and made more sophisticated changes much earlier when things were still calm. In a rush to make things better, the designers decided to change the Barbie doll’s extreme shape. In the process, they killed off Barbie’s old-time friend Ken, replacing it with Blaine, an Australian surfer. Their innovations had also delayed in terms of revamping and redesigning the tweens and the older girl’s needs (Nash and Duvall, 2005). They ended up rushing to release ‘Flava’ and ‘My Scene,’ which were clearly unbaked versions and copy-pastes of Bratz dolls, and this flopped terribly. Their decisions to change Barbie was also too late, and as a result, the sales were on a sharp decline. Barbie collection sales had dropped significantly by over 30% by 2006.This was critical for Mattel because the Barbie brand constituted over 50% of their sales. Sales and stock prices dropped.
Mattel did not have an innovation strategy, and it did not have an effective research and development wing that looked into what the competition was doing. Mattel did not a culture of continuous learning about the customer needs and adapting accordingly, and the changes found them off-guard. Instead, their need for change and innovation only began when they realized the competition had taken over. Even as Mattel moved to court to fight over copyright infringement, it was apparent that the company had delayed in making the necessary changes to its product to appeal to the new mothers and girls.
One of the important reasons for the dolls company’s slow-decision making approach as the competition took over the market was poor leadership. Mattel was primarily headed by a conservative CEO at the time, Robert Eckert. Robert Eckert joined the company in 2000, and his contribution was impacting the decision-making ability. The CEO had failed to recognize and adopt the business intelligence strategies that the firm originally established (Okatan and Alankus, 2019). Mattel had originally established a corporate intelligence system that empowered the company to get knowledge from the researchers and scientists to manipulate both external and internal data for better decision-making and effective intelligence to deal with decisions and make important decisions regarding the competition. Ignorance of an organization's traditions and culture cost the company the opportunity to identify what the competition was doing in advance. This ignorance also denied the company the opportunity to act on the tell-tale signs that the world was changing, and the woman’s place in the society had shifted, allowing the competition to take advantage and steal away the market share. Change in leadership in 2000 was, therefore, crucial in causing the company’s problems.
Conclusively, Mattel has had its shares of mistakes; first, despite understanding that the role of the woman had changed and there was need to change the Barbie doll brand to meet these changes, they ignored and continued with business as usual. Second, Mattel did not have innovation structure and culture and as a result it remained behind even as the competition took off. Lastly, the fear to welcome change and to act quickly led to delay in making the necessary changes and as a result the competition caught up with Mattel.
References
Okatan K. and Alankus O. (2019). Effect of External Innovation Capacity on Company Level Innovativeness . Journal of Organizational Studies and Innovation. Vol 6. No. 4. Istanbul Kultur University.
Nash K. and Duvall M. (2005). How Barbie Lost Her Grove: Case 177 A Dissection . Mattel Base Case.
