I certainly don't know what all their mistakes might be, but, IMO, there are some things that stand out: extreme gender differentiation and the emphasis on all the sort-of violent spy/criminal/robo-gang products which may alienate their strongest market (well-educated parents and other adults with money to spend on creative-play toys.)
I support this thesis.
I have a small collection (30) of figures on my shelf in my office and I notice a certain interest in these figures by the people coming into the office. Often - if the visitor is a parent - I am asked what this toy is and where they could buy it...I have to bite my tongue not to pull a "Rasputin" ("These are Legos...").
On Saturday, we celebrated my daughters birthday and for her friends, we dumped out the Playmobil crate...needles to say it never was so easy to tame a flock of hyper-energetic eight year-olds...
Hardly anyone knows the brand...