From the topic Mattel and The Learning Company Merge Professor asks me "Do you think they could've taken drastic measures and asked Ms. Barad to resign?

Rise of a Doll and Its Promoter

In 1998, Mattel Inc., the venerable toymaker, was facing an aging problem in a number of its most profitable product lines. 1 Its signature toy, the famous Barbie doll, would turn 40 the next year as would Little People, its preschool toy line. Meanwhile, Viewmaster was celebrating its sixtieth birthday, while former top seller Hot Wheels had just passed the 30-year mark months earlier.

Mattels chairperson of the board and CEO at the time, Jill Barad, had won accolades for her resuscitation of the companys Barbie doll segment. Barad joined Mattel in 1981 at an annual salary of $38,000, and rose through the ranks to take the helm as CEO in January 1997. Her claim to company fame rested largely on her work on the Barbie doll. Barad changed Barbies image from a sexy bombshell to a professional woman, increasing the value of the iconic plastic blond from US$200 million to US$1.9 billion in the process. Flamboyant and sharp-tongued and dressed in her signature high heels and business suit, Barad as CEO often seemed more Hollywood than boardroom.

Having reached the position of CEO, a title then held by only two other women in the Fortune 500, Barad became a role model for young, ambitious professional women around the world. Her accomplishments seemed to say that a woman can balance family life and corporate culture, and she did so while breaking a number of stereotypes about corporate women in the process. A year after she attained the CEO title, Mattel hit a 10-year high in its stock value at US$45.62, a 64 percent increase since Barads tenure began.

However, Barad did face a serious challenge at Mattel. Even after the company made significant acquisitions by purchasing Tyco Toys and Fisher-Price, Inc., Barbie still represented 38 percent of company revenues, and up to 55 percent of operating profits. However by 1998, Barbie had ceased to be the companys ingnue, and despite her transformation, the product was showing declines in sales growth from a 20-percent annual rate at the beginning of the decade to approximately 6 percent in 1998.

Barad responded with a number of initiatives. She planned to give the busty Barbie more realistic physical proportions and take on the international market by offering dolls tailored to overseas cultures. She overhauled Mattels global marketing effort and vowed to double international sales in just five years from US$1.6 billion to US$3.4 billion. This last goal was in spite of the fact that efforts to increase Mattels appeal in international markets had been tried before and had failed.

CEO Barad was not to be deterred. Her confidence seemed well earned and not just on the basis of her stunning success with the Barbie line. She had also used her powers of persuasion to create key links between the company and Hollywood studios. She had successfully expanded an agreement with the Walt Disney Company for rights to license toys based on the filmmakers products. She secured similar deals with media companies Viacom Inc. and Nickelodeon Inc. years before the cable networks became the force they were in the late 1990s.