Current Business Conditions of the Barbie Brand

1) The current business conditions of the Barbie brand are challenging because Mattel is having a difficult time keeping up with the changing tastes of American girls. Despite the fact that foreign sales of Barbie remained flat, domestically, they have dropped significantly. The decline in Barbie sales may have been due to increased competitiveness that currently exists within the market. This ranges from new technological innovations such as video games, and interactive online games, to a new popular doll on the market besides Barbie.

2) There are a few primary factors that are currently impacting the performance of the Barbie brand which include indirect and direct competition. Instead of parents buying Barbie dolls for their children, they have been spending their discretionary money on electronic items such as I-pods, and video games for their children. This is an example of indirect competition. Children today enjoy highly interactive games. A Barbie doll involves a child to utilize their imagination. In the past, this was fine, however, times have changed! "The Barbie doll brand does not capture the imagination of young girls as it has in the past". (Gogoi, Mattel's Barbie Troubles). In addition, Mattel faces direct competition from a doll brand called Bratz made my MGA Entertainment. This new brand features a doll which looks cool and trendy, hence it has garnered the attention of young girls. Since the Bratz brand began, Barbie's sales have eroded considerably. "Barbie sales have dropped 30% from 2004, no doubt affected by MGA's newer, hipper doll. By 2006, Bratz had captured about 40% of the fashion-doll market and posed the biggest threat to Barbie since her debut in 1959". (Townsend, Barbie vs. Bratz: It's a Doll-Eat-Doll World)

3) Today's Barbie consumers are the parents of children who have fond memories of playing with the dolls when they were children. They want to give their child the same rewarding experiences that playing with a Barbie doll had when they were younger. The problem is that Barbie portrays the upper middle class lifestyle that in today's society is difficult to achieve. With high unemployment, and an extremely large rift between the rich and the poor, the middle class is finding it more and more difficult to spend money on luxurious items. For example, Barbie has a dream house, owns multiple expensive sports cars, and has an extensive wardrobe full of designer brands and accessories. During the 1960's, the U.S. economy was different as compared to modern day. The economy was robust, jobs were plentiful, and the American dream was possible. Unfortunately, today the average American struggles just to make ends meet. Barbie's excessive line of materialistic products makes it difficult for the average young girl to relate.

Also, in the 1950's, the man was expected to work and be the sole provider for the family,