Mgmt3347 individual case study TABLE OF CONTENTS Introduction The essay is a strategic analysis for LEGO Group. LEGO Group is a famous toy company in the world, which established in Denmark. LEGO Brand is not only the familiar logo, but also the expectation. LEGO acts as a guarantee of quality and originality. LEGO’s core values are imagination, creativity, fun, learning, caring and quality. The essay will show strategic analysis by identifying the industry, analyzing general and industry environment, listing resources and capabilities, analyzing the company’s core competency, SWOT, current strategies. Then, giving the key issues. Finally, the essay will recommend the business-level strategy. Identifying The …show more content…
Political/legal element Global political environment is stable in general in the current. International relation between main political powers in the world has gotten a balance after strong competition, which is relative stable. To creating a favorable atmosphere for economic development and encouraging a positive development of the toy industry, most countries seek a stable, peaceful and develop international environment. Analysis of the industry Environment Bargaining power of buyers There are a few large buyers, which are large retail chains such as Kmart, Target and Big W in Australia. They buy products from many different brands. Buyers bargain for higher quality, lower price and great level of service. Bargaining power of suppliers For toy industry, there is no bargaining power of suppliers because there are many different suppliers in this industry. Risk of new entrants For toy industry, new companies are easy to entry the industry because toy industry has fewer berries. The products are similar, which is easy to copy. Toy industry does not need new firms to invest a lot and switching costs are low because most consumers so not have the loyalty. If the products are more attractive, consumers will buy, especially major target people are children. It is easy to access to distribution channels, but it is hard to cover the market because many retail ways about toys, including online stores, department stores and so on.
Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.
Should all major league sports follow behind Major League Baseball in changing potentially offensive names or logos?
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.
Based on the case study Lego appears to be using the Focus strategy. Michael Porter proposed three generic strategies Cost Leadership, Differentiation and Focus. Focus is a strategy where organization focuses on specific niche markets; this may include a particular geographic region or particular segment of customers. Organizations which use this strategy develop their products after having a study of dynamics of the segment and unique needs of customer. Lego before the appointment of the new CEO appear to use the focus strategy as their top priority was always to focus on innovation and creativity with taking profits into consideration. Add to that the case study also mention that Lego used to create products that primarily targeted boys. After the appointment of new CEO Jorgen Vig Knudstorp the company appears to have changed its policy form Focus to Cost-Leadership. Cost-Leadership is a strategy where organizations focus on gaining competitive advantage by offering products and services at the lowest possible price. They achieve this by increasing profits by reducing production cost and other way is to increase market share by reducing the prices of products compared to the competitors. Knudstorp after taking charge of Lego changed their focus on reducing the production
Thus, in the LEGO Case study provided, the new CEO Knudstorp has very efficiently aligned the IS and organization design with respective to the business strategy to bring success for the company.
A black African-American that was one of the many few who was born free in Wilmington, North Carolina went by the name of David Walker. Walker’s father whom died before his birth was a slave but his mother was a free woman. In the state’s laws Walker inherited his mother’s liberated status although, being free did not keep him from witnessing slavery. Walker traveled throughout his time in his younger days in the South, noticing the injustices of the slave system that the whites had going on. Even though Walker was a free slave he still seen and knew what slavery and racism was. Charleston, South Carolina is where he settled and eventually found a church home that goes by the name of African Methodist Episcopal church. A large population of free African Americans lived there at the time. In the year of 1822, a revolutionary plot was uncovered that resulted in severe cruelty of black churches which made things very difficult for the blacks during those times. Walker up and moved to Boston in the year of 1825 where he married a fugitive slave that went by the name Emily. He established a profitable secondhand clothing business and very active in helping the poor and needy even including the runaway slaves. During that time he joined a political organized black community group. Walker became involved with the nation 's first African American newspaper, that went by the name Freedom 's Journal out of New York City, in which Walker contributed some. He spent a lot of time
1. From early 1990s to 2004, the Lego Group, a long successful toymaker with a world-renowned brand, fell into the edge of bankruptcy. Compared with the highest revenue in 1999, the revenue in 2014 decreased by 35.6% while the net profit was negative, seven times less than that in 1999, the lowest in the past ten years. Its net profit margin and ROE were also the lowest. The gross margin and inventory turnover were all lower than its competitors. The strategic moves in the two main periods “growth period that wasn’t” (1993-1998) and the “fix that wasn’t” (1999-2004) lead to its poor performance.
An Analysis of the Operations Strategy and Management Decisions in Lego Group between 2004 and 2009
Through studying the entire retail toy industry, we have been able to understand the complexity of the industry in which Toys "R" Us operates. Upon completion of the analysis, we realized that the industry is growing stably,
This essay will consider firstly the position of Lego in relation to both the constraints of the internal and external
Toys R Us is one of UK’s leading toy and game retailer. This report conducts an academic research focus on Toys R Us (UK) in toys and games retailing sector. In the first part of this report, we will discuss the toys and games industry background and the overview of Toys R Us. Then, the research will focus on Poster’s Five Force Model and Porter’s Generic Strategies. In the next parts, this report will concentrated on the potential strategies which Toys R Us might pursue in the future. Conclusion and recommendation will be mention in the final part of this report and the recommendation will be covered the best strategy for Toys R Us which can be used for the future competitiveness.
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
In addition to their commitment to the builders of tomorrow, LEGO Group makes 4 promises. The first promise they make is to their partners. Building partnerships with their customers, suppliers, and intellectual property partners based on mutual value creation is fundamental. The second promise they make to their people, to enable execution of the business strategy and build the long-term health of the company. The
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.
The Mr Price Group Limited is very successful. The divisions within the group are made successful by its stakeholders. In order to strategically plan for the future and grow, Mr Price needs to carefully analyse both the internal and external environments. In this process they can use problem identifying techniques such as SWOT analysis, Porter’s Five Forces and PESTLE analysis to gain better understanding and insight into the Micro, Market and Macro environment. By doing this Mr Price can identify new opportunities for growth and further develop into a well-known and successful brand. Once all issues have been identified Mr Price can put in place strategies in order to alleviate these issues and better the internal functioning