Business methods used by Mattel Toy Company in fostering its success

Introduction

            Organizational growth is an essential requirement for organizations to survive in the current business environment characterized by extreme complexity and dynamism. This implies that firms have the challenge of formulating effective growth strategies in order upbeat the competitive and dynamic business environment. As a result, the adopted business strategies must suit the firm in order to help an organization to achieve sustainable competitive advantage and facilitate business continuity (Duane & Hoskisson, 2008). In this regard, business level strategies and methods refer to a matched set of obligations and actions that a company used with the primary objective of achieving competitive advantage and exploring core competencies in a specific market segment for its products (Hill & Cronk, 2010). Mattel Toy Company makes use of a number of business strategies to achieve competitive advantage and profitability, which are vital in guaranteeing its business continuity. The goal of this paper is to identify the business methods used by Mattel Toy Company in fostering its success.

The first business method used by Mattel is the emphasis on diversity and inclusion as part of the company’s business strategy. Mattel acknowledges that cultural diversity is central in fostering business success because it facilitated a better understanding of the available business opportunities in the various global markets, and develop products that meet the diverse needs of consumers from diverse cultures. Mattel is the largest global toy firm; as a result, the company relies of a diverse workforce in terms of race, religion and gender, which plays a significant role in helping the company to penetrate global markets (Mattel Inc, 2009). Diversity at Mattel also helps in ensuring that the company meets the evolving needs of its customers because the company’s workforce applies a wide arrange of experience, viewpoints, knowledge and expertise in meeting the evolving demands of customers (Mattel Inc, 2009).

The second business method used by Mattel is the use of corporate social responsibility as part of the company’s business strategy. Corporate social responsibility involves the integration of corporate regulation in the firm’s business model. Corporate social responsibility is a form of self-regulation mechanism incorporated into the company’s business actions in order to comply with the law, international standards, and moral and ethical values. Mattel uses corporate social responsibility to foster a positive impact on the communities hosting the company operations, the environment and core stakeholders (Hill & Cronk, 2010). Corporate social responsibility has played an integral role in improving the corporate image and reputation of Mattel Toy Company. The firm acknowledges that its business operations draw upon the foundations of its corporate values. Further, Mattel believes that making CSR and independent function will help in fostering great accountability and facilitate the production of quality toys, social compliance, and foster environmental commitments. As part of its CSR strategy, Mattel takes part in numerous grant making programs to support charitable organizations; examples include Mattel Children’s Hospital, Children Affected by HIV/AIDS Foundation, Save the Children, and National Association of Children’s Hospitals and Related Institutions (NACHRI). Mattel has embarked on strategic partnerships with these institutions as a way of giving back to the community, which is an effective strategy for building its corporate image and reputation (Mattel Inc, 2009).

Mattel also uses the fact it is an industry pioneer to attain leadership advantage. Industry pioneers usually identify the potential of a growing industry and embarks on effective strategies before the industry booms. Mattel has used this strategy to maintain their leadership in the industry. For instance, Mattel was cofounded in 1945, and the owners envisioned a tremendous increase in the number of children born after World War II. In addition, the company believed that parents needed toys for amusing their children. As result, Mattel exploited its position as a pioneer to become the industry leader (Mattel Inc, 2009).

The fourth business method used by Mattel involves strengthening the company’s relationship with its customers. Mattel has embarked on customer relationship strategies to ensure customer loyalty; such an interaction plays a vital role in the establishment of friendship and trust between the company and customers. In the long run, customers view themselves as crucial stakeholders in the business and later become advocates of the company’s products. Creation and innovation is also a vital element of Mattel’s business model. Since its establishment, Mattel has relied on product innovation to foster the production of high quality products, which gives it a competitive advantage over other similar enterprises in the toy industry. The toy market is dynamic and changes continually, implying that constant innovation and creation is the strategy that Mattel uses to meet the ever changing customer requirements. Creation and innovation have been central in facilitating the introduction of new products and ensuring that old products are still relevant and competitive in the market (Mattel Inc, 2009). For instance, Mattel was the first to develop dolls that walked by themselves, and live action dolls having moving eyes and mouths. Innovation and creation facilitates the production of diverse product lines besides the main toy product line.

Mattel exploits the fundamental consumer behavior to its advantage as part of its business strategy. As a conventional rule, consumers normally make enormous purchases basing on trends. Mattel uses popular trends to customize its products to reflect the current trends. Other business level strategies deployed by Mattel Toy Company include focused differentiation strategy having targeted customers under specific business divisions and segmenting the overall market using key products; functional management structure and a multidimensional domestic strategy. Further, Mattel uses strategic alliances such as non-equity alliances, distribution alliances and licensing agreements. Strategic partners include Third Party Vendors, Wal-Mart, Walt-Disney and Toys R’ Us (Mattel Inc, 2009).

Conclusion, Mattel uses a number of business strategies to ensure profitability and competitive advantage; they include diversity and inclusion, corporate social responsibility, attaining industry leadership by being a pioneer, strengthening the company’s relationship with its customers, and creation and innovation. This business model has been effective in steering Mattel’s competitive advantage and profitability.

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Duane, I., & Hoskisson, R. (2008). Understanding business strategy: Concepts and cases. New     York: Cengage Learning.

Hill, C., & Cronk, T. (2010). Global business. New York: McGraw Hill/Irwin.

Mattel Inc. (2009). 2009 Global citizenship report. El Segundo, CA: Mattel Toy Company.