1- HISTORY OF LEGO
I will be responsible for starting the presentation. In my part, I will begin by introducing the group’s members and saying what everyone is going to talk about. Secondly, I will begin by introducing our partners in LEGO to have a global information of the company, short but clear.
I will talk about the history of the company, beginning, growth, expansion and current affairs.
Later I’ll do a little description of their products, kind of them, why kids likes them, what they offer in their product, if they are safety or not…
And finally I will also focus on the organization of the company like its organizational chart, managers and where they operate.
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Lego continuously prepared for any problems concerning the political sector. Unless the political environment will change rules that relate to its operations, Lego prefers to stay away from such subject. The political environment has allowed the liberation of the market, liberation of the market paved the way for improvement of products. Economic
Lego can be said to be economically stable for the past years. Its economic stature is doing well that’s why they try to improve their products to give the best to their clients. It is not only the internal economic situation of the industry that should be taken note of but also the economy of the domestic market. Lego check first the economic status of the market they are operating in. The economy of the US domestic market has given opportunities to Lego .. The status of the economy has paved the way for Lego to prosper in the region and help in proving that the domestic market is one the premier region that houses the industry.
Social
The social environment serves as the conscience for Lego. This environment ensures that the Lego will not do things they know can ruin the industry’s reputation with the society. The society ensures that Lego will consider first its environment before making any decisions. Lego and other educational toy companies make sure that the products they offer will be accepted by the public. Lego tries to minimize the creation and delivery of some products they
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.
To achieve its business strategies the LEGO has taken the help of the IT vendors IBM and SAP for the establishment of their IS making it possible to extend more quickly and add capacity and functionality as it was needed. Supporting massive expansion brings its own challenges, one of which is to ensure that the underlying systems can scale reliably and effectively. The main issues with the supply chain management, end customer feedbacks, product profit accountability, spread its market and the various unit functioning etc. had been addressed completely by the advent and the establishment of the efficient IS for the business.
On one hand, partnering with such supplier has offered the company the greatest freedom to operate. One the other hand, technological spillover and inventions came up from the developmental stage are also likely to occur. The worst case is that competitor might protect those inventions which prevent the LEGO Group form using their own innovation. Protection of those inventions is deemed necessary to the growth of the
Provide an overview consisting of a brief description of the chosen company, your chosen product or service, and annual sales.
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.
By 2004 Lego was in considerable trouble; it had made a loss of approximately £200m; sales fell by 40%. One reason for this was lack of success in moving into new markets, such as computer games and clothing. However, a major cause for the financial woe was due to issues in the supply chain; costs were not being squeezed out, and the increase in specialised LEGO models had led to an explosion in the total number of unique bricks; each requiring expensive moulding, production and inventory. LEGO rightly decided to address this supply chain cost issue, and turned to Flextronics, a company with considerable experience in
LEGO Group is very clear about their goal when it comes to early education. They are dedicated to their product and
Company Overview: Conduct research and describe the company, its operations, locations, markets, and lines of business. Collect financial statements for the past three years, fiscal or calendar.
LEGO, like most companies in the toy industry are fighting to stay profitable in this
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.
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
Describe the company and the major initiative(s) they have planned for the next 5 years.
Ever since LEGO started experiencing double digit annual sales growth, (by launching new toy games, branded theme parks, entering the video game sector, introducing mobile applications, introducing toys for girls, etc.) they realized they needed a model that was standardized, modular and scalable. Hence, allowing them to expand to new markets in a less amount of time. They already had a decently established market in USA and UK; they were looking for an expansion in other countries as well. This model had to tackle major issues like scalability challenges, employee
In 2002 and beginning of 2003 LEGO struggle with low sales and an increase in their inventory levels due to an intensification of their competitors, adapting their process as LEGO did in the beginning
1. What led the LEGO group to the edge of bankruptcy by 2004? Please focus on the management moves during “the growth period that wasn’t” (1993-98) and “the fix that wasn’t” (1999-2004).