Between 2001 and 2004, Mattel lost 20% of its share of the worldwide fashion-doll segment to smaller rivals such as MGA Entertainment, creator of a hip new line of dolls called Bratz. MGA recognized what Mattel had failed to—that preteen girls were becoming more sophisticated and maturing more quickly. At younger ages, they were outgrowing Barbie and increasingly preferring dolls that looked like their teenage siblings and the pop stars they idolized. As the target market for Barbie narrowed from girls ages three to 11 to girls about three to five, the Bratz line cut rapidly into the seemingly unassailable Mattel franchise. Mattel finally moved to rescue Barbie’s declining fortunes, launching a brand extension called My Scene that targeted older girls, and a line of hip dolls called Flavas to compete head-on with Bratz. But the damage was done. Barbie, queen of dolls for over 40 years, lost a fifth of her realm almost overnight—and Mattel didn’t see it coming.
Scanning the Periphery
Reprint: R0511H
Companies often face new rivals, technologies, regulations, and other environmental changes that seem to come out of left field. How can they see these changes sooner and capitalize on them? Such changes often begin as weak signals on what the authors call the periphery, or the blurry zone at the edge of an organization’s vision. As with human peripheral vision, these signals are difficult to see and interpret but can be vital to success or survival.
Unfortunately, most companies lack a systematic method for determining where on the periphery they should be looking, how to interpret the weak signals they see, and how to allocate limited scanning resources. This article provides such a method—a question-based framework for helping companies scan the periphery more efficiently and effectively. The framework divides questions into three categories: learning from the past (What have been our past blind spots? What instructive analogies do other industries offer? Who in the industry is skilled at picking up weak signals and acting on them?); evaluating the present (What important signals are we rationalizing away? What are our mavericks, outliers, complainers, and defectors telling us? What are our peripheral customers and competitors really thinking?); and envisioning the future (What future surprises could really hurt or help us? What emerging technologies could change the game? Is there an unthinkable scenario that might disrupt our business?).
Answering these questions is a good first step toward anticipating problems or opportunities that may appear on the business horizon. The article concludes with a self-test that companies can use to assess their need and capability for peripheral vision.
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