Matel's Considerations For a Posisble Toy Recall

1. What decisions or actions need to be taken? Take the perspective of the protagonist(s) in the case.

As the senior executive team of Mattel received reports that the surface paint on the Sarge Cars toys contained lead in excess of U.S. federal regulations, they were faced with several decisions in the short run and in the long run.

Looking at the short run, Mattel must decide on which toys to recall, and how do they deal with the consequences that are common to any product recall such as the damage to Mattel reputation, and the financial damage done in terms of the increased costs and the loss of sales. Lastly, Mattel will also need to address how future product recalls do not occur. Do they implement tighter regulations and inspections?

2. What alternative actions did you consider? Alts are relevant, practical, executable?

There are a few other actions Mattel will need to consider in regards to a possible product recall. One option is to possible do nothing at all and wait for regulators to push Mattel to issue a product recall. This is not an option that I recommend because it could increase Mattel’s exposure to future litigation. Another alternative action is to recall all products that are above the acceptable levels of lead. As I mentioned above, Mattel will also need to decide how to deal with the consequences of a recall. How will Mattel repair the damage done to their brand? How do they deal with the financial obligations of the recall when refunding consumers and coordinating the logistics of all the recalled products. Mattel will also need to consider where future products will be manufactured. Do they continue producing core brands at company-owned facilities and outsourcing non-core brands to...

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... come with a product recall. How will Mattel deal with the damage done to their brand and reputation? How will they deal with the added costs of dealing with recalling the product along with the loss of future sales? How will they deal with the possibility of consumer litigation? To help address these issues, I would immediately communicate with the public and reassure the public that everything is being done to ensure their safety while also taking full responsibility for the recall.

The case also mentions logistics and coordination of setting up a recall as another challenge. With approximately nearly 250,000 Sarge Cars that may have been affected with lead paint, coordinating the return of all tainted toys will be very challenging. Mattel can coordinate with retailers to set up locations where consumers can return the toys making logistics easier and coordinated.