How Matters barbie Lost the War against the Bratz Doll The rapid pace at which the world is changing is forcing product development changes and stop buying the doll. strategic managers at all kinds of companies to speed up Mattel's top managers decided not to rock the boat; they their decision making; otherwise they get left behind by left the brand and business model unchanged and fo- agile competitors who respond faster to changing cus- cused their efforts on developing new digital toys. tomer fads and fashions. Nowhere is this truer than in the As a result, Mattel was unprepared when a challenge global toy industry, in which vicious combat rages in came along in the form of a new kind of doll, the Bratz the doll business, worth over $10 billion a year in sales. The doll, introduced by MGA Entertainment. Many competi- largest global toy company, Mattel, has earned tens of bil- tors to Barbie had emerged over the years because the lions of dollars from the world's best-selling doll, Barbie, doll business is so profitable, but no other doll had since it introduced her over 50 years ago." Mothers who matched Barbie's appeal to young girls (or their mothers). played with the original dolls bought them for their The marketers and designers behind the Bratz line of dolls daughters, and granddaughters, and Barbie became an had spent a lot of time to discover what the new genera- American icon. However, Barbie's advantage as best- tion of girls, especially those aged 7-11, wanted from a selling global doll led Mattel's managers to make major doll, however. It turned out that the Bratz dolls they de- strategic errors in the 2000s. signed met the desires of these girls. Bratz dolls have Barbie and all Barbie accessories have accounted for larger heads and oversized eyes, wear lots of makeup and about 50% of Mattel's toy sales since the 1990s, so pro- short dresses, and are multicultural to give each doll "per- tecting this star product was crucial. The Barbie doll was sonality and attitude."The dolls were designed to appeal created in the 1960s when most women were homemak- to a new generation of girls brought up in a fast-changing ers; her voluptuous shape was a response to a dated view fashion, music, and television market. The Bratz dolls met of what the "ideal" woman should look like. Barbie's the untapped needs of "tween" girls, and the new line took continuing success, however, led Mattel's CEO Bob off. MGA quickly licensed the rights to make and sell the Eckert and his top managers to underestimate how much dolls to toy companies overseas, and Bratz became a seri- the world had altered. Changing cultural views about the ous competitor to Barbie. role of girls, women, sex, marriage, and women working Mattel was in trouble. Its strategic managers had to in the last decades shifted the tastes of doll buyers. But change its business model and strategies and bring Barbie Mattel's managers continued to bet on Barbie's eternal up to date; Mattel's designers must have been wishing they appeal and collectively bought into an "If it's not broken had been adventurous and made more radical changes don't fix it" approach. In fact, given that Barbie was the earlier when they did not need to change. However, they best-selling doll, they thought it might be dangerous to decided to change Barbie's extreme shape; they killed off change her appearance; customers might not like the her old-time boyfriend Ken and replaced him with Blaine,an Aussie surfer." They also recognized they had waited doll is Mattel property and that MGA could sell the doll much too long to introduce new lines of dolls to meet the only until the end of 2009. In 2010 the companies were changed needs of tweens and older girls in the 2000s. They locked in a bitter dispute: Mattel wanted the rights to pro- rushed out the "My Scene" and "Flava" lines of dolls that duce and sell the Bratz doll line, but MGA's founder was were obvious imitations of Bratz dolls, but they both still trying to protect the profits made from the Bratz flopped. And the decisions they made to change Barbie- dolls' success. Meanwhile stores stopped selling the Bratz her figure. looks. clothing, and boyfriends- came too late. doll, Mattel revitalized its line of Barbie dolls, and its and sales of Barbie dolls continued to fall. CEO exultantly declared that "Barbie is back" as in- By 2006, sales of the Barbie collection had dropped by creased doll sales helped raise the company's profits by 30%, which was critical to Mattel because its profits and 86% in the spring of 2010.86 stock price hinged on Barbie's success-and they both Imagine then, how Mattel's managers reacted to the plunged. Analysts argued that Mattel had not paid enough decision of the federal appeals court in July 2010 when it attention to its customers' changing needs or moved threw out the previous court decision and ruled that quickly to introduce the new and improved products nec- MGA Entertainment did have the right to make and sell essary to keep a company on top of its market. Mattel the Bratz doll because their looks and image were not brought back Ken, but then in a sign of its mounting prob- subject to existing copyright law! The rights to the Bratz lewis, Mattel's lawyers sued MGA Entertainment, arguing doll were given back to MGA, and MGA is currently su- that the Bratz dolls' copyright rightfully belonged to them. ing Mattel for major damages that have cost it hundreds Mattel complained that the head designer of Bratz was a of millions in profits. Mattel employee when he made the initial drawings for the dolls and that Mattel had applied for copyright protec Discussion Questions tion on a number of early Bratz drawings. Mattel claimed 1. Why were Mattel's managers so slow to change that MGA hired key Mattel employees away from the their decision making about the design of the firm and these employees stole sensitive sales information Barbie doll over time? What kinds of cognitive er- and transferred it to MGA. rors may have contributed to this? In 2008 a judge ruled in Mattel's favor and ordered 2. What kinds of factors affected the way managers MGA to stop using the Bratz name, and a jury awarded at both Mattel and MGA made their decisions Mattel $100 million in damages. After an appeal, in 2009 a over time during their battle over control for the federal judge upheld the verdict and ruled that the Bratz Bratz dolls?Chapter 2 case a0 Read the case at the end of Chapter 2, then b) conduct research (library, etc,) to update knowledge about the case-- then c) complete the following outline (max 400 words) 1- Case Title 2- Mention five facts 2.1 2.2 2.3 2.4 2.5 3- Mention 3 main problems 3.1 3.2 3.3 4- Mention 3 strategies to solve the above three problems (think of yourself either as a consultant OR newly appointed CEO) 4.1 4.2 4.3 5. Final note-- assess the quality of your work AND your overall recommendation