Essay on Lego Case Study

Knudstorp's slow-it-down approach of careful cash management, focusing on core products, and reducing product complexity certainly contributed to that success. Re-engaging with customers was also taken to another level. One of the insights Jorgen had when he became CEO was that he needed to reconnect with the community of loyal LEGO fans which according to him was one of the most powerful assets the company had. It was one of the big reasons for the comeback.(Most effective)

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.

Target Corporation enhance its information warehouses with latest big data that is technologically sophisticated to crunch large data using complex algorithms and provide vital output data for a daily operation as well as strengthen its capabilities over its rival which is a competitive advantage and speed up worker productivity. A quality tracking tool provided by information system tracks each package, parts ensuring the goods meet the quality standard.

• A situation where a reduction in production will result in less overhead allocated to the respective product

The company LEGO (Appendix 1), was far from the reality when in the year 2000 the famous Bricks were named as ‘the toy of the century’ by Fortune Magazine. the numbers were reflecting a different reality when in 2003 and 2004 the losses were of more than $400m on annual sales of over $1b (Lego case of study 2014).

Therefore the purchasing department will be able to reduce the cost to more efficient and effective process and it will be able to deliver better process.

Flinchbaugh, J. (2012, December 17). Lessons from the Road: Reducing Lead Time Changes Everything. Retrieved April 02, 2016, from http://www.industryweek.com/

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.

There was the change in the business strategy in the company that was brought up by the new CEO. The strategy was to survive, cut costs, sell businesses, generate cash and ignore the dash for the growth in the immediate future. Lego was known for the traditional blocks and components that will allow children to build anything with their imagination. The business strategy was to broaden the Lego products for the other customer segments. They created the

The high brand equity of Lego and other well established organizations offer another disadvantage to new entrants. Collaborations with the film industry helped Lego sustain market share and increase sales volume in the toy industry through franchise agreements on Harry Potter and Star Wars.

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 manufacturing cost can be lower as the rearrangement of the production line to meet urgent order can be minimize or even eliminated.

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

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