Porter’s Five Forces Analysis of Mattel 

Mattel is a toy manufacturing and entertainment American multinational company. The toy company started its business in 1945. Today, we’ll discuss Porter’s five forces analysis of Mattel; bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Unique and Differentiating Factors of Mattel

• Environmental sustainability initiative and using recyclable material
• Innovative product designs and moving towards digitalization
• Worldwide distribution network 
• Proactive media engagement like TV shows, web series, movie franchises
• Toys for infants for their early childhood development 
• American Girl doll character 

Substitutes and Competitors of Mattel

• Leapfrog 
• Vtech
• Hasbro
• Funko
• Spin Master
• GTX
• Lego
• Toys R Us
• Walt Disney 
• Pixar Animation Studio 

Porter’s five forces analysis of Mattel would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Mattel Porter’s five forces analysis of the toys and entertainment business as follows;

Porter’s Five Forces Analysis of Mattel

Let’s discuss Porter’s five forces analysis of Mattel as a competitive forces in strategic management and they’re as follows; 

Bargaining Power of Suppliers in Mattel

The bargaining of suppliers is Moderate and lower in Mattel as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Mattel Porter’s five forces analysis of toys and entertainment business are as follows;

I-Material Suppliers Availability 

Mattel has a very large network of suppliers in various countries worldwide. It allows the toys and entertainment brand to decrease its reliance on a few raw material-providing suppliers. The company could easily switch from one supplier to another without incurring any cost. Easy availability of suppliers and lower switching decrease their bargaining power. 

• Some of the main suppliers of Mattel are as follows; 
• Rawyal India
• Firstunion Animation Technology China
• Sinergi Karya Kharisma Indonesia 
• Sky Dragon Toys 

II-Long Term Contracts 

Mattel builds a long-term professional relationship with suppliers to ensure the smooth availability of raw material and supplies for production. Suppliers prefer to partner up with the leading retail toys brand due to the consistent supply of orders and they don’t have to find new clients. On the other hand, the toy brand would receive a smooth supply of raw materials without any disruption. 

Bargaining Power of Buyers in Mattel

The bargaining of Buyers is Higher in the toys and entertainment business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in Mattel Porter’s five forces analysis of the toys and entertainment business are as follows;

I-Variety of Toys Alternatives 

While shopping for toys, customers and parents have a wide variety of toy options available to them of different brands with multiple action figures. They could easily switch from one branded toy to another relevant to their budget requirements without incurring any costs. It increases their bargaining power in the presence of multiple toy alternatives. 

II-Differentiation & Influence 

Mattel invests a significant amount of capital resources in products and toy differentiation in terms of quality, price, toy figure, character, and idea. The differentiation factor has allowed the company to establish a unique brand position in the market; it helps the company gain a competitive edge. 

Threat of New Entrants in Mattel

The threat of new entrants is Moderate in the toys and entertainment business as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the Mattel five forces analysis of toys and entertainment business are as follows;

I-Creative Toys Idea & IPR

While building a toy company, the first thing you should require is the highly unique idea and its scaling up scope and then earning the patents for the unique concept. Mattel and other toy companies invest a significant amount of capital resources in the development of unique and innovative toys for customers. 

II-Mass Production & Distribution 

In order to make a profit from the toy business; you would require mass scale production and worldwide distribution along with marketing and branding. Mattel has established a worldwide distribution network in various key retail stores across the world. On the other hand, the new businesses don’t have access to the global retail network, and it limits their growth; without mass production, their sale and revenue don’t cover up the expenses. 

Threat of Substitutes to Mattel

The threat of substitute products and brands is higher in the toys and entertainment business as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the toys and entertainment business five forces analysis of Mattel are as follows;

I-Digital Entertainment 

Instead of playing with toys of Mattel; children could watch cartoons and play video games. The substitute options are readily available to the parents and children, and they don’t cost a lot. Easy availability of alternative entertainment options would increase the threat of substitution rate. 

Competitive Rivalry in Mattel

The competitive rivalry among toys and entertainment businesses and companies is very high as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the toys and entertainment business five forces analysis of Mattel are as follows;

I-Tough Competition 

Mattel is facing tough competition from competitive brands like Hasbro, Lego, Toys R Us, and others. They have established a strong brand positioning in the market and Mattel competes against them in terms of price, creative idea, and brand influence. Their market presence has made it difficult for the company to maintain its market position. 

II-Customer Loyalty & Retail Network 

Mattel has established a very loyal database of customers and a strong relationship with retailers. The retailers give the top visible shelves to the toys of Mattel; higher product visibility in the stores would increase the sale and conversion rate. 

Conclusion: Mattel Porter’s Five Forces Analysis |5 Forces Analysis of Mattel

After an in-depth study of Porter’s five forces analysis of Mattel; we have realized that Mattel is the world’s leading toy and entertainment brand. If you are learning about the Mattel 5 forces analysis of the toys and entertainment business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.