When Robert A. “Bob” Eckert was appointed Chief Executive Officer (CEO) of Mattel Toys in May 2000, he found a company that many believed had been lost. His former CEO, Jill Barad, who brought in Barbie from the toydeads in the 1990s and had been CEO since 1997, had been pressured months earlier when the company’s profits plummeted. The company was now losing about $ 1 million a day, and Barbie, who had been the cornerstone of the company’s sales and profits for ten years, was aging. Mattel’s stock price had fallen from $ 46 a share in 1998 to a current low of $ 10. Bob Eckert and his team had quickly reduced operating costs, shed the big money losers, and refocused on core products and brands, all in the hopes of reviving profitability. The financial and operational measures that were taken were swift and, at times, brutal. The market had been patient with Bob Eckert, but now, in the summer of 2004, four years after his entry, it was time to review what was accomplished and renew and revise expectations. The toy industry was notoriously short-lived, with many concerned that Barbie, Hot Wheels, Fischer Price, and American Girl would no longer provide the growth Mattel needed. The business mantra of profitable growth was very real to Bob Eckert and Mattel.
Thunderbird School of Global Management (TB0045-PDF-ENG)
September 25, 2008
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