Barbie’s state of depression
Mattel, the largest toy company based on revenues, is the manufacturer of Barbie, Hot Wheels, Matchbox cars and board games. Barbie dolls (Mattel’s flagship brand) were introduced in 1959. With these dolls attracting 7 to 12 year old girls, different varieties of Barbie dolls were released into the toy market. Mattel dominated the toy market till the late 1990s. But in 2001, when MGM’s Bratz dolls were introduced, the realistic look of these dolls attracted girls and they started abandoning Barbie dolls. Now Barbie faces stiff competition not only from Bratz but from Mattel’s own American Girl. Between 2001 and 2004, Barbie sales fell by 27.5% due to stiff competition from Bratz. MGM believes its brand has supplanted the market leader, and they have the consumer insights to prove it. 'When we ask kids: How old are Bratz Dolls? They think they are teenagers. When they look at Barbie they say, "old" and "it's Mum'," MGM says. Due to the changing preference of children for interactive toys and computer and video games, the Barbie product line experienced a decline of 12.5% in its worldwide sales. To attract kids, Mattel started selling Barbie dolls with cellphones. It formed a partnership with Single Touch Interactive to sell Nokia cellphones on purchasing from the My Scene Barbie product line and updated its website to make it more interactive. The company also formed an alliance with Apple to introduce iPods in an effort to boost sales.
In 2005, MGA Entertainment sued Mattel in Federal Court, accusing it of unfair competition, intellectual property infringement and serial copycatting and in 2007 Mattel sued MGA Entertainment. Mattel attorney John Quinn began proceedings by asking how MGA could suddenly, overnight, become one of the most innovative toy companies in the world. He went on to accuse MGA of stealing the idea for Bratz from a design that had originated at Mattel. Mattel is fighting for a share of the estimated $500m a year that Bratz is generating for MGA. The money would help offset a downturn in sales at Mattel. MGA's case rests on the argument that the Mattel designer in question, Carter Bryant, first had the idea for Bratz in 1998, some eight months after he left Mattel's employment. MGA has also counter-sued Mattel on the basis that the Barbie is a copy of the Bratz doll.
Barbie has also created controversy in some foreign countries and in the US, being the most recent one in March 2009, when West Virginia Delegate Jeff Eldridge introduced a bill to "ban the sale of Barbie dolls and other dolls that influence girls to be beautiful" within the state of West Virginia.
THE SWOT MATRIX
|STRENGHTS |OPPORTUNITIES | |Company history |Alliance with companies internationally | |Brand reputation |Lower costs of oil | |International Presence |New customer base in Asian and Easter countries | |Low costs | | |Strong Marketing | | |Excellent packaging | | |WEAKNESSES |THREATS | |History of management struggles |In the US the toy market is moving away...