The case explains the challenges facing Mattel, an American toy company well known for its iconic brands such as Hot Wheels and Barbies dolls. From 2007 to 2008, Mattel started to experience a significant reduction in revenues, which led to a reduction in prices for its stock. With the new leadership of Ynon Kreiz as the fourth CEO from 2012, the company has been able to embark on a transformational journey. With the changing markets, Kreiz aims to change from the traditional toy maker and make the company a high-margin media company that creates movie-based familiar brands. This new change will include a reducing employees, the number of factories selling the toys, strategic cost cutting and using intellectual property. The release of movie projects based on well-known brands such as Hot Wheels and Barbie and the hiring new, experienced movie producers shows a change in the organization’s strategy. As a result of the change, the company is experiencing challenges such as the competitive nature of the entertainment industry and the need to adapt to the changing trends in the market. Despite these challenges, there are positive indicators, such as an increase in revenue and cash flow as of 2019, which shows that Kreiz’s strategy is showing signs of success in Mattel.
Emergent and Planned Changes in Mattel
After analyzing the case, it is clear that both planned and emergent changes have led to the company’s transformation. The emerging changes such as strategically changing from the traditional toy maker to a modern high-margin media organization. The company aims to make movies based on known brands such as Barbie, American Girl, and Hot Wheels, which that have changed with time in response to the need for revitalization. The brands have been regrouped into categories, and the toy box has been abandoned, an emergent concept that shows the change in how the organization manages its various portfolios. There are planned changes that are evident from the case, such as the reduction of the company’s workforce by 22 percent and reducing the factories by selling 13 of the existing factories. The main aim of this action is to cut the cost of operating the company and enhance operational efficiency, which shows a deliberate and strategic approach to dealing with the existing financial challenges. Another planned change in the company is the reduction of having detailed strategy documents on a single page to cut costs, record the value of intellectual property and fix the brand.
Where the Change on the Continuum from Shallow to Deep Change
Rating the changes from shallow to deep is one of the critical lenses that can analyze the transformative strategies that were implemented by Ynon Kreiz in the company. Some shallow changes include reducing the workforce and the sales factories and cutting the cost to address the financial concerns. Though these changes are essential for short-term stability, they may not lead to significant changes in the company. Instead, these changes quickly respond to the pressing challenges that require rectification. At the deeper end of the continuum, Kreiz has established more objective strategies for Mattel. Kreiz has decided to move Mattel towards becoming a high-margin media company which is different from the traditional role as a toy manufacturer. This change is seen from the company’s focus on movie production, especially on iconic brands such as Hot Wheels and Barbie, and how these brands are grouped into different categories. These strategies show the strategic repositioning and a change in Mattel’s core business model (Baptista et al., 2020). The strategic move into the entertainment industry shows a deep level of change, which introduces a transformative layer that deals with more than the challenge of financial instability. This strategic move presents a comprehensive change in Mattel’s purpose and market presence, which shows a willingness to embrace the future.
Assessment of Ynon Kreiz’s Change
The changes that Kreiz has implemented in Mattel show both positive and concerning aspects. One of the positive aspects is the strategy to move towards the media and become a movie production company. This move diversifies the company’s revenue stream and, at the same time, reduces dependence on traditional toy sales. This strategy focuses on cutting costs fix, fixing the broken brand, and improving the value of intellectual property, showing the existence of a clear and targeted strategy.Mattel’se focus on having movie projects that renowned studios and talents produces can modernize some of their brands, such as Hot Wheels and Barbie. The simplified strategy of cutting costs, analyzing the value of intellectual property and fixing the brand of Mattel is another commendable approach. This strategy is clear and targeted, enabling efficient and streamlined allocation of resources while addressing the areas that need immediate attention. The focus on improving the existing brand through movie projects aligns the company to leverage the entertainment industry and shows the company’s commitment towards adaptation and innovation based on their customer preference.
One of the concerns accompanying these changes is that the success of the movie projects has yet to be known, and Mattel has invested in a very competitive and unpredictable industry with meager returns for toy manufacturing companies. The company depends on external partners such as actors and movie studios, which adds more risk since the company has to depend on the performance and decisions of the collaborators (Islam et al., 2020). However, reducing some product lines, such as Monster High and American Girl, indicates prominent trends that cannot be solved by internal transformation. The company needs to understand and adapt to the industry changes to be able to remain competitive and successful.
Despite having these concerns, in 2019, the company presented positive financial indicators such as positive cash flow and increasing sales. The positive acceptance in the stock market shows a high level of investors’ confidence in the direction the CEO sets. Ynon Kreiz’s changes at Mattel show a strategic shift towards movie and media production which is forward-looking, aligns with the industry trends, and provides room for diversification. The existence of uncertainties and risks that exist in the entertainment industry and external dependencies require a vigilant and adaptive approach. As the company continues its transformational journey, the connection between the internal project and external market operations will shape how Mattel will perform in the entertainment industry.
Image of Change Management Illustrated by Ynon Kreiz
The leadership presented by Ynon Kreiz has been characterized by a mixture of change management styles that have contributed to the company transformation and deal with significant challenges. Ynon’s approach shows a strategic vision that considers strategic, transformational, innovative and adaptive elements. Transformational leadership is evident through Ynon’s vision to change the identity of Mattel. Through moving the company towards being a high-margin media organization he envisions a transformative change from the traditional toy maker to a more innovative company in the entertainment industry. This shift aligns with the principles of transformational leadership, which focuses on a forward-thinking strategy to reimagine the market position of the company.
Strategic change management is another image that is presented by Kreiz’s leadership style. He has made a decision to streamline Mattel’s focus using a simplified strategic approach, which shows targeted and clear ways to bring about organizational change. Through identifying the key priorities, such as improving the brand, cutting costs, and making use of intellectual property, Ynon shows a strategic mindset that focuses on addressing the major issues that affect the performance of Mattel (Bhardwaj et al., 2021). Adaptive change management is also an image that is evident in Kreiz strategy to market dynamics. Ynon has recognized the decline of some brands, such as the American Girls and Monster high, and he is willing to adapt to emerging trends. He has also established a strategic move to categorize the different brands based on customer preference, which indicates an adaptive approach to meet the changing market demands. This flexibility enables Mattel to navigate through the evolving customer preference and maintain a competitive landscape at the same time.
A notable feature of Kreiz change management is how willing he is at taking risk and fostering innovation. He has ventured into the entertainment industry through producing movies that are based on Mattel toy brands which shows a bold and innovative move. There is also collaboration with big studios and working with experienced movie producers, which shows commitment to risk-taking as a way to drive growth. The risk-taking strategy is a characteristic of change leaders who use unconventional and experimental strategies that drive growth. The changes implemented by Ynon in Mattel shows a comprehensive strategy towards addressing the challenges they are facing. The use of different leadership styles, such as transformational, adaptive, strategic and risk-taking, presents a multifaceted strategy for transformation. Though there are risks that exist by venturing into the entertainment industry the positive indicators shows that Ynon’s vision and leadership style might change the story of Mattel and position it for future success in the ever-changing markets.
References
Baptista, J., Stein, M. K., Klein, S., Watson-Manheim, M. B., & Lee, J. (2020). Digital work and organisational transformation: Emergent Digital/Human work configurations in modern organisations. The Journal of Strategic Information Systems, 29(2), 101618.
Bhardwaj, A., Mishra, S., & Jain, T. K. (2021). Analysis of strategic leadership for organizational transformation and employee engagement. Materials Today: Proceedings, 37, 161-165. https://fardapaper.ir/mohavaha/uploads/2020/07/Fardapaper-Analysis-of-strategic-leadership-for-organizational-transformation-and-employee-engagement.pdf
Islam, M. N., Furuoka, F., & Idris, A. (2020). The impact of trust in leadership on organizational transformation. Global Business and Organizational Excellence, 39(4), 25-34. https://www.researchgate.net/profile/Idris-Aida/publication/340161551_The_impact_of_trust_in_leadership_on_organizational_transformation/links/5eaf8eea45851592d6b8558c/The-impact-of-trust-in-leadership-on-organizational-transformation.pdf
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