But Mattel misjudged how, and how fast, to move. Learn from Mattel`s mistakes in gathering – and acting on – competitive intelligence.

Bad news came with Botoxed lips and belly shirts. In the summer of 2001, toymaker MGA Entertainment introduced the Bratz. The new fashion dolls,Yasmin, Jade, Sasha and Cloe, came in a rainbow of skin tones, with pouting expressions. No blonde hair, sugary smile or impossible figure, which for four decades had defined Mattel`s iconic Barbie doll. Girls in the coveted demographic of six to 12 bought $20 million worth of Bratz dolls in the first six months they were out.

And yet it was 14 months before Mattel came out with a Barbie offshoot, the My Scene dolls, that featured the right mix of vivid makeup and edgy clothes that young girls now craved.