Mattel Catastrophe in China Essay - 1890 Words

Barbie was introduced to the world in 1959, and is one of the most iconic dolls ever produced. Barbie is manufactured by Mattel, which was founded in California in 1944, and has dominated the toy market ever since. Barbie helped to create a name and an Empire for Mattel, who later introduced products such as Hot Wheels and Polly Pocket. Mattel, for many years, had a great reputation and produced products that were safe and children loved. Mattel began moving their manufacturing operations overseas about twenty years ago, and until recent years had enjoyed continued success. When Mattel began moving a majority of their manufacturing operations to China and Mexico, they never would have imagined the controversy they would find themselves in†¦show more content†¦As children grow their bodies are able to absorb more lead than an adult (Pearce Robinson, 25-5). At the time of the recalls, China did not have regulations in place regarding the levels of lead in paint. In addition t o lead being found on paint used in children’s toys, Mattel would eventually end up recalling millions of products that contained unsafe, removable parts. In the end, Mattel ended up recalling 19 million toys made in China. There is a large cost advantage to doing business in China. Chinese manufacturers are able to manufacture products at a cost that is 30%-50% less than in the United States. The savings associated with foreign manufacturing is too much for most companies, including Mattel, to pass up. Everyday more American jobs are outsourced to China because of their ability to manufacture products for significantly less than in the United States. When it comes to manufacturing, China has a comparative advantage, or the ability to produce a good at a lower opportunity cost than another producer (Mankiw, Pg. 55). Not only have companies, such as Mattel, saved billions of dollars over the years, so has the American consumer. It is estimated that, since 1978, consumers in t he United States have saved approximately $100 billion by obtaining cheaper products from China (Ahlstrom Bruton, Pg. 4). It is no wonder jobs are continuously outsourced to other countries. Financially speaking, it seems products manufactured in China benefit everyone, wellShow MoreRelatedCrisis Management - Case Study6562 Words   |  27 Pagesthrough full-page newspaper ads (Dwyer, 1998). Mattel Mattel Inc., the countrys biggest toy maker, has been plagued with more than 28 product recalls and in Summer of 2007, amongst problems with exports from China, faced two product recall in two weeks. The company â€Å"did everything it could to get its message out, earning high marks from consumers and retailers. Though upset by the situation, they were appreciative of the companys response. 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