Product details

In the summer of 2007, Mattel, the largest toymaker in the US, made several recalls of products that had been made in China. The recalls led not only to a sharp reduction in Mattel''s sales but also to public hearings in the US Congress, which significantly affected Mattel''s reputation. Like other toymakers, Mattel has been relocating its production abroad and outsourcing the manufacture of parts and components. Indeed, 65% of Mattel''s products are made in China. In contrast to its competitors, however, Mattel has understood the importance of quality control in this relocation / outsourcing process. In the 1980s, it reversed its earlier strategy of outsourcing to factories in Asia by owning and operating some plants in Asia for producing its most popular products. The product recalls show that quality control continues to be an issue. This case explores: (1) Mattel''s strategy for organising production; (2) the trade-offs between in-house production and outsourcing; and (3) the trade-offs between different production locations.