Incorporated in 1948, Mattel, Inc is the manufacturer of a variety of toy products which are directly sold to the customers. The company markets its products under three major segments   namely ‘Mattel Girls and Boys US’ – aimed for children aged 5-14, ‘Fisher Price Brand US’ – aimed for children aged 0-5 and ‘American Girl Brands’ – targeting girls aged 0- 14 (Reuters,2012).  
At present while Mattel Inc’s share price (par value $1.00 per share) trades at a favorable price of $37.07 on the NASDAQ Stock Exchange as of 7th December 2012, Mattel Inc. still faces a number of potential problems that may arise of the company does not anticipate the changes in tastes and trends and tries to identify customer’s preferences successfully.   At the same time, it is important to keep in mind that Mattel has a highly seasonal business which is largely on peak in the very short holiday season. Any even that may disrupt Mattel’s activity during this time is likely to adversely hit the company’s operations and profit margins.   While a majority of Mattel’s sale occur during September – December, its operating results are largely dependent on the sales during this season. Also, Mattel has a ‘concentrated; customer base which means that changing economic conditions nowadays because of the hiking interest rates, the cut in temporary tax reliefs and benefits and the Eurozone crisis all of this combined would significantly affect the purchasing patterns of Mattel’s customers especially Mattel’s three largest customers namely: WalMart, Toys R US and Target.
Today, Mattel is significantly being challenged by the increasing popularity and demand for digital games which affects the traditional toy sales considerably. While Mattel has shifted some of its product line on to digital form, this constant changing in consumer’s preferences is causing Mattel to incur high product development costs.