Situation Assessment: Mattel Company

CHAPTER 2
SITUATION ASSESSMENT
2.1 Introduction
This chapter illustrates the analysis of situation assessment throughout the company. One of the important processes needed when planning a decision is by having situation assessment. This process helps to monitor the internal and external factors. Internal assessment requires analysis regarding to the strengths and weaknesses of the company in terms of the resources, core competencies and strategic directions. Meanwhile, external assessment focuses on the deeper analysis of political, economic, social and technological which is affecting the missions and vision of a company. Situation assessment is a systematic process that includes collecting the data, making analysis towards the information

The situation began when a subcontractor Choi Chee Ming, a Hong Kong toy tycoon which owns Early Light industrial Co., assigned by Mattel to paint Cars toys. However, Choi Chee Ming took another Chinese-based vendor, Hong Li Da to complete the tasks given. This violates Mattel’s request because Mattel deals with direct suppliers only. Mattel product is found to contain unauthorized level of lead. Other than that, there is another Early Light’s subcontractor, Lee Der Industrial Co., are using the same lead on Mattel’s Cars products. China suspends the subcontractor’s business license. Following this incident, there are another three suppliers working under Lee Der such as Dong Xin, Zhong Xin, and Ming Dai has used unauthorized paint on top of Mattel’s Fisher-Price products. According to Eckert, this incident occurred because at the end of three to five years when this unfortunate event hit Mattel, the price of labor and raw materials increased by two or three times the original price. This unexpected situation brings lots of pressure to the vendors in the margin and they tend to change the content of material rather than increase the product price to save money. A few months later, Mattel again recall more toys found to contain strong magnets that could exposed to the dangers of choking young children. From the situation stated above, Mattel decided to recall 21 million Mattel toys believed having illegal materials in its manufacturing content. There is also a lawsuit tied to Mattel from the parents stated that Mattel product endangers children. After all this incidents happened, Mattel issued that subcontractors working under Mattel cannot take two or three tier suppliers under them. Additionally, Mattel aims to control the production, discover and prevent the use of unrecognized