Business Strategies of Worldâ€™s Successful Companies: Mattel Inc.â€™s Winning Business Strategies
An in-dept study of the history of Mattel Inc., and unveiling the business strategies that have seen this once a small business start up growing into a multi-billion dollar enterprise, creating and selling a wide variety of toys in 150 countries.
Business Strategy 1: Being an Industry Pioneer Gives You The Leadership Advantage
The ability to recognize the potential of an evolving industry and quickly put your business in position before it booms is a strategy common to founders of successful businesses. By the time every other person begins to come in, they have already taken their place as the industryâ€™s leaders, thereby possessing a huge chunk of the market.
And if they know what they are doing, their businesses will continue to remain leaders irrespective of the strength of competitors. This is just how valuable the strategy of being the first in a business sector is.
Elliot and Ruth Handler, who founded Mattel in 1945, got into the toy business because they saw there was going to be tremendous increase in child birth immediately the Second World War ended and believed parents would need toys to amuse their babies, which at the time were almost not available. Though they had no business experience, yet their business made a huge impact as a result of their uniqueness.
Business Strategy 2: Is There a Bond between Your Business And Your Customers?
If you see your business as a relationship with your customers rather than just a vehicle to make money, then you will understand the importance of the above question. Successful companies are those whose businesses, including the products/services they offer interact with their customers continually.
From such an ongoing interaction, friendship and trust are established. And before long, the customers begin to see themselves as indeed stakeholders in the business. They would gladly not only patronize the business but also become its advocate.
The Handlers learnt this powerful business strategy early in their business career through the success of their music box that their customers or users of their products need strongly to interact with them frequently.
Mattelâ€™s music box was different and well made. It had a mechanism which allowed it to continue to play only when the child turned the crank. This unique product, which allowed the child to interact with their toy and want to play with it from time to time, was an instant winner and it enabled Mattel to beat it Swiss competition, which lead the market for music boxes at the time.
Business Strategy 3: Getting To the Top Level by Doing Something New and Big
The big stage is certainly not for those who are not willing to take the risk of doing something great and unique. It is for those who can see the trophy to be claimed beyond the size of the price to pay. It is for those who understand that a winning business strategy is to get peopleâ€™s attention by doing uncommon things.
In 1955 toy manufacturers never promoted their business through television advertisement. They depended on retailers to display their products and only advertised during holiday periods. But Mattel was to change all that with a strategy to promote it business all year round.
Although it was a huge gamble for a toy business to spend money advertising throughout the year, Mattel decided to sponsor a 15-minute segment of Walt Disneyâ€™s Mickey Mouse Club on the ABS television network. The company signed a 52-week slot costing it $500, 000 which was actually its net worth at the time.
By this strategy, Mattel marketed its business and toys directly to children all over the country, and soon its slogan, “You can tell it’s Mattel, it’s swell,” became a household song. The gamble had paid off real good; the company had revolutionized the toy industry and sold lots of toy Burp Guns, as well as made the Mattel brand name well recognized nationwide.
Business Strategy 4: Riding On the Wings of Trend to Success
Generally, the propensity for consumers to make purchases is hugely guided by trend. The majority of people just want to belong to whatâ€™s in vogue more than anything else. You can therefore, taking cue from successful businesses, exploit this basic consumer behavior to your advantage.
Mattel Inc. in 1957 came up with a business strategy to take advantage of the popularity of the then Western films. It began to introduce toy replicas of classic Western guns and holsters, whose originals where used with heroic fervor in the movies, making kids feel like their heroes in the films.
The company created “Fanner 50” western pistol and a toy version of the Winchester rifle, complete with ejecting bullets. This strategy proved remarkably successful as the companyâ€™s sales reached $9 million, climbing to $14 million the following year.
Business Strategy 5: What Other Products/Services Do You Offer Aside The Major One?
You can actually create more products/services from the one in the market either to complement it or to enhance it. This strategy opens up several revenue sources and swells your business turnover.
After Mattel had lunched Barbie doll in 1959, and following the phenomena success of Barbie, which has become the best-selling toy ever, the company thought out a great strategy to ride on the wing of Barbieâ€™s success.
It positioned Barbie as a never satisfied lover of clothes and accessories, and soon Barbie clothes and accessories were introduced and sold separately. Then in 1961, the Ken doll was introduced as Barbieâ€™s boy friend. This business strategy heavily pumped more money into Mattelâ€™s sales account, so much that by 1992, sales were nearly $1 billion.
Business Strategy 6: Donâ€™t Stop Being Creative and Innovative
Donâ€™t sell just one product/service for ever, you must continue to introduce new products and better old ones to be competitive and relevant in the market place â€“ your best selling product may be yet to come.
Mattel continued to reel out toys upon toys throughout the 1960s, many of them ranking tops in sale in their respective business sector. The company was the first to introduce the dolls which walked by themselves; live-action dolls whose eyes and months moved; and educational See â€˜N Say toys. It launched a whole line of Thingmaker activity toys, which included Creepy Crawlers, Fun Flowers, Fright Factory, and Incredible Edibles.
In 1968 Mattel introduced Hot Wheels miniature model cars, which also was highly successful, firing it to the top of its industry. With very many of its products resting on the number one position in their different business categories, Mattelâ€™s strategy of continually being creative and innovative saw it as the world’s number one toy maker by the end of the decade.
Business Strategy 7: You Can Achieve Great Success By Leveraging On Other Peopleâ€™s Businesses
Yes, very true! Leveraging on other companiesâ€™ systems through a joint venture or partnership on special projects can be a cheap, easy, efficient and effective business strategy to achieve remarkable results. This might be in regard of production, sale or distribution of your products.
One of Mattelâ€™s business success factors was the formation of strategic alliances with thriving establishments, such as the Walt Disney Company and Hanna-Barbera, which gave it quantum exposure to millions of children and adults.
The strategic alliance which Mattel formed with the Walt Disney Company in the late 1960s enabled it to sponsor attractions and to create and sell toys at some Disney theme parks. With this strategy Mattel could reach millions of its potential customers who visited the parks each year than it could ever have been able to on its own.
In addition to the strategic alliance with the Walt Disney Company, Mattel also got the exclusive rights to sell dolls, stuffed characters, and preschool toys based on Disney movie characters.
These included those from Cinderella, Beauty and the Beast, and Aladdin. This business strategy was a super success for Mattel, whose sales from the Disney line of products alone got to $500 million by 1995.
Apart from the strategic business alliance with Walt Disney, Mattel equally signed an agreement with Hanna-Barbera to market toys based on the cartoon characters Yogi Bear, Boo-Boo, Cindy Bear, and the Flintstones. Yet again Mattel got Turner Broadcasting to allow it develop and sell Tom and Jerry products.
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