In 1959, the wife of Elliot Handler, Ruth Handler came up with an outstanding idea that changed Mattel forever. As Ruth Handler watched her daughter playing with paper dolls, she suggested the idea of making three dimensional dolls to her husband. Elliott loved the idea of making such dolls and introduced the doll with a full wardrobe and accessories to the market. The doll initially named after the nick name of daughter of Elliott and Ruth. The introduction of the new doll was a huge success for Mattel and immediately the doll became the major product line of Mattel (Finding). With the success of Barbie doll, Mattel was named a public company and ranked soon as one of the largest industrial companies in the United States. In 1968, Mattel have introduced another consumer-loved product called Hot Wheels. This was second biggest hit since the company introduced Barbie. Hot Wheels immediately labeled Mattel as the largest toy company in the world.
As the toy industry was changing and new competitors were coming in, Mattel saw a stiff competition rising in the mid 1980s. Like other companies in the toy industry, Mattel faced a stiff from the electronic entertainment. The electronic entertainment introduced many electronical videos games in which children switched to at an increasing young age from the traditional entertainment. To cope up with the competition and attract the new generation, Mattel decided to expand into technology by producing electronic gaming products. Mattel failed to attract a high proportion of consumers, and were unable to fit in with the new strategy as there were new competitors producing electronic games with lower prices. Later, Mattel decided to focus on producing the core products of the company. This strategy to refocus on the core products and makeover some of the core products was a great success for Mattel. For example, after doing makeover, in 1988 to 1993, the sales of Barbie doll increased to $ 1 Billion dollars from $430 Million dollars (Sansweet).
As Mattel is known for making most of its own products in their owned manufacturing facilities, the company owned and operated 10 manufacturing plants worldwide. Half of the manufacturing plants are located in China (Jiangyong). Since Mattel started its business, the company produced its products mostly in developing countries to take the advantage of cheap manufacturing costs. Unlike many toy companies, Mattel produced 70% to 80% of its products in their own manufacturing facilities. The company believed that making products in-house will be more stable and high efficient products. According to Mattel, in-house facilities have high standard safety measures and high quality control that produce high-quality products.
Besides making most of its products in Mattel’s own manufacturing facilities, some of its production was outsourced to China and other developing countries in order to focus on domestic strategic efforts such as Research and Development and Marketing. However these outsourcing products were not...