It is worth noting that like many companies, Mattel has grown since its inception largely on the basis of population growth. Not to take anything away from Mattel's products, but the population of the world and its wealth have increased substantially since 1945. The company now stands to benefit from a surge in growth as the baby boom echo generation enters child-bearing age. This massive demographic will likely have a lot of children as well, giving Mattel a chance for strong demographic growth in the North American market. The company grew strongly during the baby boom years, and now their grandchildren are the next major wave of potential consumers.

There are a number of threats that the company faces, however. Competition is a major threat, as it comes not only from other toymakers but from video games, computers and other electronic entertainment. Children raised on computers are now having kids,...
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