In the toy industry, Mattel is one of the world leaders, especially with its line of Barbie dolls. However, it has faced competition from MGA Entertainment, who has produced Bratz dolls since the 1990s. Which of the following statements is true about the strategic group in which these companies compete?

Question

Krista Proctor

Social Studies

18 September, 21:31

In the toy industry, Mattel is one of the world leaders, especially with its line of Barbie dolls. However, it has faced competition from MGA Entertainment, who has produced Bratz dolls since the 1990s. Which of the following statements is true about the strategic group in which these companies compete?

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Answers (1)

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Miles · Answer 1

By competing in the same strategic group, the two companies are dealing with customers who view their products as direct substitutes for each other.

Explanation:

Mattel Inc. is one of the top toy making and entertainment company in the world. It has its headquarter in California. Mattel is famous for its toy especially Barbie dolls.

MGA Entertainment is also a toy manufacturing company which makes toys for children and other entertainment products. Its famous toy is the Bratz doll.

Both the companies are dealing with the same strategic category of people who considers their toys as a direct substitute for each other. Thus they are fighting in the same strategic group.