Case Analysis: The Lego Group: Publish Or Protect?

The use of LEGOs is an extraordinary thing, but it is shocking to see exactly how controversial a small toy can become. People of all ages have been found to enjoy this toy. Companies and organizations such as MIT and NASA have even found a use for them. The toy has become known as a child’s imagination tool and has not been exclusively used for adults. The documentary shows that adults come together to compete in competitions on who can create the greatest LEGO sculpture. Many people may not know just how big this toy is used around the world.

This will ensure that no competitor can simply take her design and manufacture the product. This will also reduce the amount of direct competition due to the fact competitors cannot copy her product and market it to consumers.

The Lego Group tried to catch up the market trends during the period, but they ignored that the industry total profit pool decreased by 50% Between 1999 and 2003. It's naturally for players to reduce mass production and focus on core competency. However, the Lego Group invested significantly in expansion not only in brick-based product lines, but also beyond the brick. The expansion was not focusing on its core competency.

Lego Corp was established in 1932 by founder Ole Kirk Kristiansen. With just 10 employees, they start crafting wooden construction toys. The most famous of these were the wooden duck. As the popularity of plastic toys rose in the mid-1950s, the company did away with wooden toys and started focusing on manufacturing plastic automatic binding blocks. As early as the beginning of the company, their motto was “Only the best is good enough.” High quality and safe products have been the focal point of LEGO Group for decades. Over the years LEGO Group has kept its word on that motto and has supplied millions of families with creative toys that last.

Tessera was an innovative developer company for the miniature technologies which were widely used in the production of consumer electronics devices. Company’s inventions mainly focus on advanced chip packaging for microelectronic devices and image capturing devices. The company practiced what intellectual property attorneys referred to as “ carrot licensing”. Carrot licensing is a model where a company invents and patents a new idea. Then the company is licensing the idea to other companies with the trade secrets and know-how, and helps them to implement the innovation to the production. The opposite model to carrot licencing is the “stick licensing”, in which a company used either the threat of or actual litigation to

LEGO,  like  most  companies  in  the  toy  industry  are  fighting  to  stay  profitable  in  this

There are many barriers to new organizations in the toy industry, making the threat of new entrants low. Lego and other big toy companies like Mattel benefit from economies of scale. An economy of scale is achieved by lower costs through large volume production (Textbook glossary). Economies of scale can occur in many departments within the organization including production, marketing, research and development, and finance. Some manufacturing of Lego products was shifted to Central Europe and Mexico in order to benefit from lower wages and to shorten product supply chains (p. 13 of case). The management of Lego additionally holds expertise on production, distribution and customer needs; which are absent in a new organization. To enter the toy sector a potential entrant needs to calculate the start of production at a level that will give a competitive position and production costs lower than the market.

Lego President and CEO Jørgen Vig Knudstorp was surprised when Greenpeace activists, in an attempt to stop Arctic drilling, mounted a campaign criticizing his popular toy company for its cobranding relationship with Shell Oil. At first, Knudstorp and his executive team at Lego headquarters in Billund Denmark didn’t quite understand Greenpeace’s criticism. Was the criticism justified? Why didn’t Greenpeace tackle Shell directly? Would Greenpeace’s campaign be taken seriously or would it simply fade away? As Greenpeace beefed up its efforts through social media, Lego’s top management was left wondering how to respond to Greenpeace or whether they should respond at all. And more importantly, executives didn’t know whether Lego should continue its business relationship with Shell.

Advances in the field of information technology and introduction of new hi-tech form of entertainment such as tablets and gaming consoles had left Lego trailing in the entertainment field. Jorgen Vig Knudstorp was appointed as the CEO to revamp the company’s business process, organization structure and information systems. Knudstorp was quick to act and first made changes in the company’s production process. He encouraged designers to use the unused components in development of new products and design, thus reducing the number of unused

The decision to buy them from other companies already made is called outsourcing. This can provide needed jobs for the community and inspires a sense of belonging in that community also. This decision is also based on direct materials, direct labor, variable costs, and fixed costs, but this time they are being used to compare one venture with another to see which one brings in more revenue. All the costs that it takes to make the product are added together in one column. All the costs that are needed to buy the item are added in another column. Once this is established, the opportunity costs must be evaluated. These are the potential benefits that could come from a side venture of using the production space for something else while the components for the first venture are being bought. These costs are added to the ‘make’ column. Often this is the make or break point of the deal. Also, when choosing to buy, make sure that a reliable company is chosen. They have to be able to keep up with the demand; otherwise the company will end up with not enough parts at a crucial moment. This decision, to make or buy, can have huge effects on the community that the business belongs to, as well as, other surrounding communities. They will benefit from jobs, supplies, and the well-being that comes from being part of a well knit group. Being in a stable environment is very important when raising families and having a steady income helps to provide

As their name and ideal, Lego has been beloved by the children as well as the parents for decades. Not only as plastic toy bricks, but also effective educational tools, the LEGO Company enjoyed continuous growth and broaden the global brand value. The LEGO brand moved to third place in 2002/2003 with only Coca-cola and Kellogg having greater respect among families with children. Even though as the overall toy market faces challenges, LEGO’s revenue and profits are increasing rapidly, especially since 2005. This profitability didn’t change even in the current recession in the global market. The LEGO Group achieved record-breaking profits in

Knudstrop comprehended the necessity for the Information framework and enhanced hierarchical structure. His front line procedure of reusing the modules to fabricate new items went about as rescue, where the module utilization was diminished to 7000 from 13000. Every module cost around 50000 euro, which coordinated in decreased expense for developing. In further new alterations are developed in building up the module with decreased cost, managed quality and enhanced item subjects with current business sector pattern helped LEGO to enhance its money related position in the business sector.

Currently, LEGO is one of the world’s leading manufactures of play materials. The company is guided by the motto, “Only the best is good enough,” committing to the development of children and aiming to inspire and develop the builders of tomorrow through creative play and learning. Valuing imagination, creativity, fun, caring, quality, and learning is what drives LEGO Group. By sticking to these values, LEGO holds themselves to the expectations that the people have towards the company and its products.

In 2111, Prof. Sethi and colleagues disclosed that Mattel Inc. had played a part in, what many would consider, unacceptable business practices (p. 483). Although Mattel took actions to investigate the level to which practices were truly occurring, they had also promised to remediate all noted unacceptable practices. One of the unacceptable business practices that was uncovered was the mandating of certain employee groups required to live in company dormitories and were not permitted to utilize any other options for housing. Was this practice a form of discrimination? In order to decide if the business practice and any alternatives are fair and ethical for all, resulting in the greatest amount of good for the greatest number of people, the scenario will be run through the EthicsOps.com’s Utility Test.

Lego is one of the most recognizable companies across the world. The Lego Group was founded in 1932 by Ole Kirk Kristiansen and has since been passed down from generation to generation, currently owned by Kjeld Kirk Kristiansen. The Lego Group has headquarters in Billund, Denmark and main offices in USA, UK, China, and Singapore. The Lego name originated from the abbreviation of two Danish words “leg godt” meaning “play well”. The present-day Lego brick was launched in 1958 with the interlocking principle which allowed for an infinite amount of building possibilities. Because of the Lego Groups mass size there also comes a very precise corporate structure. The Lego company is operated in a five-member Management Board. The Management Board consists of the Chief Executive Officer(CEO), Chief Marketing Officer(CMO), Chief Financial Officer(CFO), Chief Commercial Officer(CCO), and the Chief Operations Officer(COO)/Chief HR Officer(CHRO). From there it is further broken down into a 21-member Corporate Management and a board of directors. This corporate structure allows for individual departments to work successfully within the larger corporation. With the Lego Groups mission to “inspire and develop the builders of tomorrow” they have become one of the world’s largest manufactures of toys, valuing imagination, creativity, fun, learning, caring, and quality.