Good Example Of External And Internal Environmental Analysis Research Paper
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Introduced in 1986 as American Girls Collection of dolls, linked accessories and books and focused on girls of 8 years and older. In 1995, the company launched a new line of product, 18 inch personalized dolls which went on to become “My American Girl”. American Girl. The products are available in the U.S through their branded retail stores and boutiques. Online retail presence is also there.
In this paper we will explore the external environmental factors which impact the company and Wal-Mart dolls section and the future challenges envisaged by them. Additionally, we will examine the internal strengths and weakness of American Girl. Their competiveness in relation to similar brands will be explored. The organization structure will be detailed as to how it is contributing to the success of the brand.
External Environmental Factors:
American Girl became a subsidiary of Mattel in 1998. Their main manufacturing processes are located at Thailand, Mexico, Malaysia and China and sales happen in most parts of the world. The factors which affect the smooth running and productivity of these facilities are political instability, country specific trade laws and regulations, foreign currency exchange norms, anti money laundering, and civil unrest. Change in buying patterns of retailers and customers also are major factors. Wal-Mart also has to contend with similar environmental factors, since they too have a global presence.
The challenges faced by these two are that they need to establish market acceptance of their products. They have to satisfy the ever changing preferences of the customers. Trends indicate shorter life spans of the products, due to children outgrowing traditional toys and looking for more sophisticated ones. They have to accurately anticipate their customer’s requirements and change their designs accordingly. There is also the need to manage efficiencies in terms of costs, employees, retailers, advertising and marketing, processes, customer service and supply chain. Defective product design may lead to product liability, injury, damages claims, recalling a product line, replacements and regulatory sanctions.
Also the change in the lifestyles of the younger generation is causing concern. Children are moving away from traditional toys to computers and mobile phones and are getting more engrossed in social networking sites.
Internal strengths, Weakness and Resources:
American Girl is recognized across the world. Its marketing is very strong. Its international presence is growing with one third of its sales coming from international markets. Mattel has been able to successfully launch a diverse range of products customized for each demography. One of the major weaknesses of Mattel is the frequent recall of products. Plus a number of unprofitable acquisitions and mergers. The purchase of Intellivision in the 70s and that of The Learning Company were both financial catastrophes. Mattel has worldwide resources. The core manufacturing plants in different countries, the overseas retail presence and the happy employees.
Direct completion is from rival companies like Bandai, Hasbro, Jakks Pacific, and Lego. Also retailers who are also marketing their own label toys reduce shelf space for Mattel products, thereby reducing visibility. Clever imitations and less expensive products also vie for a slice of the business. Mattel’s competitive strengths lie in their global brand recognization, global citizenship initiatives, better living and working conditions in their manufacturing plants, workplace safety and zero tolerance on violations.
The structure is pyramid shaped, with a Chairman and Chief Executive Officer, one Chief Financial Officer and 9 Executive Vice Presidents in charge of different sections. They have further reportees down the organization structure. This kind of tight structure at the top levels create less contradictions and confusions. Communications to employees are also streamlined. Everyone section is aware of his /her responsibilities and it increases the efficiency of management and employee roles. This clarity drives employee as well as organizational performance to higher levels.
Mattel has endeared itself to the American children and later to the a global audience. Overall, it has stuck to good product lines and excellent marketing strategy. Mattel’s Code of Conduct for corporate ethics is solid, ensuring ethical behavior in manufacturing as well as distribution. Compliance for laws and environment are a plus. The biggest assests are the employees. They are compensated better than industry norms and a happy set of employees contribute the maximum to an organization’s success. Threats exist in terms of competition and the social media, which is eroding its targeted customer base a little. It will have to constantly keep innovating to keep ahead of competition and expand further.
Mattel. (2013). In 2013 Annual Report. Retrieved From: https://corporate.mattel.com/PDFs/2013_AR_Report_Mattel%20Inc.pdf
American Girl. (n.d.) . In About American Girl. Retrieved From: http://www.americangirl.com/corporate/corporate-landing?section=about&id=2
Tacbobo, E.S. (2012). Strengths, Weaknesses, Opportunities and Threats (SWOT) for Mattel to Overcoming Marketing and Manufacturing Challenges. Initao Marketing Group, 3-4. Retrieved From: https://initaomarketinggroup.wordpress.com/2012/10/15/strengths-weaknesses-opportunities-and-threats-swot-for-mattel-to-overcoming-marketing-and-manufacturing-challenges/
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