Transformation and Renewal at Mattel

When thinking of organizational innovation, when does Barbara Millicent Roberts (Barbie) come to mind? You might think of the post-it note or the Apple computer, but Barbie? That’s right; the favorite doll of millions of little girls worldwide represented transformation for generations. At Barbie’s peak in 2002, Mattel, the maker of Barbie, posted sales of $1.52 billion. That same year is when Mattel’s culture stumbled, resulting in a loss of growth, revenue, and profit until 2006, when the Barbie brand began its turnaround (Kapner, 2009).

Since Barbie hit the marketplace she has had 108 separate careers and has been a role model and fashion icon for girls all over the world. In fact, 20 years before Sally Ride traveled to the stars, Barbie was already an astronaut (Springen, 1998). It takes a business culture that can look far into the future to transform a product into what will win the hearts of their customers almost two decades later. As for the brand, Mattel stood poised to transform Barbie in any way that would connect with consumers, and their pocket books (Springen, 1998).

Kids and collectors alike waited for the next Barbie transformation; but Barbie’s makers stumbled, focusing too much on internal workings and status quo, missing a big change in the market. Mattel had become bloated structurally and with the addition of a software company acquisition, the company lost focus on their core brands (like Barbie and Hot Wheels), and operational costs spun out of control (Hobson, 2001). Enter new CEO Robert Eckert.

Eckert apporached the transfromation at Mattel with two goals: boost sales abroad and focus on core brands. The key to this turnaround? Eckert planned new versions of the “blonde chameleon,” Barbie (Hobson, 2001). What happened to the Mattel that could read market intelligence and know what their consumers wanted before they did? Mattel’s external focus had turned inward allowing Management to take their eyes off of innovation and renewal (Ziff Davis Media, 2005). While 12-year-olds might have played with Barbie in the past, she was now a “baby toy,” and not able to compete with popular icons at the time (like Britney Spears). The target market was going through age compression, where tweens (8-12 yrs) were moving on from traditional toys and wanting to identify with an edgier look modeled by their new popular icons (Ziff Davis Media, 2005). What Mattel missed, MGA Entertainment noticed and they launched the popular Bratz dolls.

The year 2001 marked the decline of Barbie sales. Mattel was slow to interpret their market data and act upon it. The company that introduced Barbie to space before Sally Ride blasted off had missed the new frontier. It was time to transform the culture and refocus on their consumers. Eckert’s goals for streamlining the company allowed more energy to be spent on innovation. Barbie needed renewal. After a couple of missteps with My Scene dolls and other line extensions, Mattel gained traction by reconnecting with their core market: young girls. Now Barbie keeps company with the likes of Hillary Duff and has dolls resembling American Idol contestants and Diane Von Furstenberg designed life size Barbie apparel for Fashion Week (Kapner, 2009, Ziff Davis Media, 2005). What’s new about the culture? Mattel is beginning to integrate systems that generate internal renewal. The organization went through a transformation modeled by one of their biggest brands – Barbie.

References

Hobson, K. (2001). Meet corporate turnaround Barbie. U.S. News and World Report, 130 (9), p. 43.

Kapner, S. (2009). Brand Barbie gets a makeover. Fortune, 160 (2), p. 17.

Springen, K. (1998). Hey there doll face. You look like someone we know. Newsweek, 132 (20), p. 14.

Through the years. (2009). American Salon , 6(132).

Ziff Davis Media. (2005, August). How Barbie lost her groove. Baseline , pp. 36-52.

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