Mattel Case Study
Mattel Case Study - Presentation Transcript
1. no. 1-0013 Mattel, Inc: Vendor Operations in Asia Only 3% of the world’s children are here in the U.S. Our biggest opportunities are in growth outside the U.S. – Jill Barad President & CEO Mattel, Inc. The sun was just breaking over Kowloon Harbor. From his corner office, Ron Montalto gazed across the water and watched the early morning light reflect off Hong Kong’s famous downtown skyline. Only 24 hours ago Ron had been riding around the Carolina Speedway in Kyle Petty’s blue Pontiac, emblazoned with the Hot Wheels logo. The event was part of the kickoff for a new series of Hot Wheels® replicas of NASCAR racers. Now, back in Hong Kong questions still swirled around the sourcing decisions to build those and the rest of the die-cast family of miniature cars. Starting over a year ago with the announcement of the merger between Mattel, Inc and its second largest rival, Tyco Toys, Montalto had been embroiled in a debate over the sourcing strategy for the existing Hot Wheels product line and newly added Matchbox® cars. By July 1997, the company had decided to build a wholly owned manufacturing facility in the Guangzhou region of southern China, starting production in 1999. The Asian currency crisis that ensued later that fall had reopened the “build decision.” It was now the beginning of March 1998 and all of the original options were once again under debate. While in the US, Ron had met with his boss Joe Gandolfo, President of Worldwide Manufacturing Operations and learned that he would be reassigned within the next month to oversee die-cast car operations. An ex-lawyer who had lived and worked in Hong Kong for nearly fifteen years, Montalto was a Senior Vice President and had been responsible for company’s Vendor Operations Asia division (VOA) which managed Mattel’s outsourced production. Mattel began the vendor operation program in 1988 hoping to add flexibility to the company’s traditional in-house manufacturing.
1. no. 1-0013 Mattel, Inc: Vendor Operations in Asia Only 3% of the world’s children are here in the U.S. Our biggest opportunities are in growth outside the U.S. – Jill Barad President & CEO Mattel, Inc. The sun was just breaking over Kowloon Harbor. From his corner office, Ron Montalto gazed across the water and watched the early morning light reflect off Hong Kong’s famous downtown skyline. Only 24 hours ago Ron had been riding around the Carolina Speedway in Kyle Petty’s blue Pontiac, emblazoned with the Hot Wheels logo. The event was part of the kickoff for a new series of Hot Wheels® replicas of NASCAR racers. Now, back in Hong Kong questions still swirled around the sourcing decisions to build those and the rest of the die-cast family of miniature cars. Starting over a year ago with the announcement of the merger between Mattel, Inc and its second largest rival, Tyco Toys, Montalto had been embroiled in a debate over the sourcing strategy for the existing Hot Wheels product line and newly added Matchbox® cars. By July 1997, the company had decided to build a wholly owned manufacturing facility in the Guangzhou region of southern China, starting production in 1999. The Asian currency crisis that ensued later that fall had reopened the “build decision.” It was now the beginning of March 1998 and all of the original options were once again under debate. While in the US, Ron had met with his boss Joe Gandolfo, President of Worldwide Manufacturing Operations and learned that he would be reassigned within the next month to oversee die-cast car operations. An ex-lawyer who had lived and worked in Hong Kong for nearly fifteen years, Montalto was a Senior Vice President and had been responsible for company’s Vendor Operations Asia division (VOA) which managed Mattel’s outsourced production. Mattel began the vendor operation program in 1988 hoping to add flexibility to the company’s traditional in-house manufacturing.