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The Story about Barbie in China

The Story about Barbie in China. Why Matel went to China and came home again What we take out of it for future projets. Outline. Summary European vs. Chinese Management Introduction Mattel, Inc. Presentation of Case: Barbie in China Conclusions, Lessons Learnt.

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The Story about Barbie in China

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  1. The Story about Barbie in China WhyMatelwent to China and camehomeagain Whatwetake out of itforfutureprojets

  2. Outline Summary European vs. Chinese Management Introduction Mattel, Inc. Presentation of Case: Barbie in China Conclusions, Lessons Learnt

  3. European vs. Chinese Management European Management: Impersonal and contractual relations prevail e.g. organziations formally structured Chinese Management Trusting relationships as the key to efficient business operations Family is the centre of all relationships

  4. Chinese Management | 1 People Management Important values: courtesy, diligence and kindness Downplaying of self and upgrading of relationships Seniority and good conduct of behaviour Organisation Structure Organisational hierarchy resembles that of family hierarchy Low specialisation of tasks Hardly any formulation of written policies and rules

  5. Chinese Management | 2 Leadership Style Paternalism dominating Leaders as guardians and providers of the subordinates‘ welfare Wealth as a prime source of power, self-esteem and status for Chinese leader Business Orientation and Strategy Chinese leader: enthusiastic, persistent, quck to act but yet patient enough to wait for the results Retain some of the traditional values like honesty, integrity, trustworthiness, morality

  6. Asian Problem Approach Western vs. Asian Management Problem Problem Western Problem Approach Linear Approach Holistic Approach

  7. Barbie in China WhyMatelwent to China and camehomeagain Whatwetake out of itforfutureprojets

  8. The Story Introduction to Matel facts and figuresabout Barbie in China and theideabehind Whatwentwrong? Whatarethelessonslearnt? European Management vs. Chinese Management ??? takehomepoints

  9. Mattel Founded 1949, today’s largest toy company in the world US$ 5.856 billion revenues and 31,000 employees product lines as Fisher Price, Barbie dolls, Hot Wheels and Matchbox cars, Masters of the Universe … closed its last American factory in 2002 outsourcing caused several reputation issues

  10. Story of Barbie Original Barbie was launched in March 1959 Design followed a German doll called Lilli, an adult product first doll with adult rolls allowing girls to imagine future  marriage, having a house, horse and caravan 36 inches (chest), 18 inches (waist) and 33 inches (hips), a quite unrealistic idea of body image causing lots of criticism 2001 Bratz doll first serious competitor in the fashion market

  11. Facts & Figuresabout Barbie in China 2001 fist Barbie sold in China 3 years work on a flagship store concept at Barbie's 50th birthday in 2009 Mattel launched its biggest store in the “most future place in the world” - Shanghai launch during financial crisis, Matel‘s profits fell 46 % $30 mill. invest, 3,500 square-meter, 1,600 products strategy: addressing not just young girls, but Chinese teenagers and young adults with premium toys

  12. Whatwentwrong? Parents are far more likely to splash out on education like extra music lessons than on expensive toys. Cheap Chinese toys are more competitive than 100-to-200-yuan (US $15.2 to US$30.4) Barbies. Barbie is taken as toy as well as decoration in the US, while it is taken as merely a toy in China. “

  13. Whatwentwrong? „Mattel overestimated its cachet in China and […] retail is all about square-footage and I never saw enough people there to justify its size. The rentthere would have been big.” - Paul French, Shanghai-based founder of market-research company Access Asia

  14. Whatwentwrong? Barbie who?!? Barbie also faced competition from other rivals like Hello Kitty from Japan. “…children industry market in China, more popular cartoon character. Barbie fashion image is too adult, to be accepted in China there is a certain difficulty.” Holding off Sri Lanka CEO Shanghai Fu QiangLu

  15. Whatwentwrong? Concept of flagship store means high expectations at high risks Barbie no part of China’s Culture like as a gift from mothers to daughters Did Mattel show enough patience? Did Mattel show enough flexibility in a rapidly growing market? Do 5 - 8 year old US girls and young Chinese women share same taste? most industry analysts believe that the Barbie store closed due to lack of acclimatization in China.

  16. Whatwentwrong? - …next step in China, the spokesman said disclose, "as the development of this flagship store to promote the brand targets have been met. The door is just a change on the Barbie brand strategy.”

  17. Proven concepts and strategies in other markets (e.g. Western countries) do not guarantee success in Chinese market. • Pre-entry strategic considerations are crucial; familiarization with Chinese preferences, habits and culture is a key success factor that was neglected. • The various strategic goals were challenging to unify (Entry Chinese market, launch of flagship store, compensation for declining sales) • Trial and Error: Try again with lessons learnt !! Lessons learnt from Barbie case

  18. Possible way forward with Barbie in Chinese market „Mattel is committed to developing the Barbie brand in China and to launching a new campaign across the country later this year.“ → Reassessment of product-market fit; especially market analysis, marketing strategy and marketing mix → Use authorized outlets (that are still selling Barbies) to learn from strategic alliancees and about Chinese customer behavior and culture. → Evaluation of opportunities and threats in the Chinese market, involvement of external, local resources and experts → Having ONE strategic focus: Entering the Chinese market (vs. Entering Chinese market and launching new flagship store concept)

  19. Chinese management style is more based on relationship and family- centered, compared to European management style. • Chinese markets are high risk markets, both in terms of opportunities and threats. Thorough planning and preparation of a market entry help to control these risks. • Market entry in China requires careful business self-examination (internal) and deep analysis of corresponding Chinese business environment (external). • In order to achieve product-market fit, markets must be understood in detail and product modified accordingly. Take aways | 1

  20. Take aways | 2 • Chinese historyandculturehavetobeconsideredalready in theearlystrategicplanningfor a marketentry. • Familiarizationwithlocalbusinesspracticesandestablishmentoflocalbusinesscontactsareindespensible. • Build-upofcross-culturalcompetenciesis essential.

  21. THANK YOU FOR YOUR ATTENTION IF BARBIE IS SO POPULAR, WHY DO YOU HAVE TO BUY HER FRIENDS?

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