Lego Effect On Children

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.

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

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 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.

While the lack of product management and rapid unneeded growth amongst its core Lego lineup was continuously digging Lego into even more debt, it soon encountered its biggest external issue in the form of technology. The technology was also one of the main problems. Lego had a problem with the kid’s technology market. LEGO was concerning about how they would take their essence of “development, imagination and creativity” and insert it into their toys.

The toy market has become increasingly slow (Ferrell & Hartline, 2011). First, the sector was hit by the economic recession, and then came the realization that children are simply growing up faster (Ferrell & Hartline, 2011). They are leaving toys earlier for new technologies (Ferrell & Hartline, 2011). Children today are also busier (Ferrell & Hartline, 2011). They are involved in more extracurricular activities, and simply do not have as much time for toys (Ferrell & Hartline, 2011).

This was needed to avoid the problem of toy phenomena, “Beanie Babies” and “Tickle Me Elmo” of getting replaced by newer toys in the toy industry. They developed the LEGO System, which entailed them to only produce the LEGO bricks or something related to it. Because of this structured system, there would be no need to manufacture and develop new products despite the change in children’s preference in toys. The minor changes in toy manufacturing would save the company from spending more than expected (Robertson

The LEGO Group is a privately held company based in Billund, Denmark. It was founded in 1932 by Ole Kirk Kristiansen, initially a small carpenter’s workshop (Lego Group, 2011). It has since grown into a modern, global enterprise that is now, in terms of sales, the world’s fourth-largest manufacturer of toys (Keynote, 2010). The LEGO Groups core product is a line of plastic, interconnecting building bricks, predominantly targeted at children aged 3-14 years, sold in over 130 Countries (Encyclopaedia of Consumer Brands, 1994). The LEGO Group operate globally in the Toys & Games sector, with the UK market valued at

LEGO, as we know, is everywhere today. Not only in their classic, cuboid shapes, but also in video games, on the movie screen, on clothes, and in the formation of theme parks populating the globe. Within a world that is increasingly being surrounded by colorful, snappable bricks, it is hard to describe LEGO as anything other than a major success story. However, the brick road has not always been yellow for the Danish firm. Up against the volatile toy industry, LEGO has had their share of ups and downs, nearing bankruptcy in the early 2000s. One may say that LEGO has always been unique, but it was not until this pivotal low they they became disruptive in the way they operated as a brand. This

LEGO has been in the toy industry since the Great Depression when Danish carpenter Ole Kirk Kristiansen and his sons began making wooden toys (Bigus, 2011). Showing ingenuitive spirit, after the end of World War II, LEGO became the first company in Denmark to purchase a plastic injection molding machine, this was an expensive moving hinging on the risk that plastic toys were the toy of the future (Bigus, 2011). Soon after the purchase, LEGO expanded its business to include the first plastic LEGO bricks (Bigus, 2011). Godtfred Kirk Christiansen, one of Kristensen 's sons observed during the toy fair of 1954 a new way to market LEGO as a system of play so that the toys could be used separately or together to build large projects

LEGO’s major threat can be seen in the varying nature of the market in the run up until 2004. Where it has remained the market leader of construction toys, it should be taken into account that LEGO’s traditional toys have been widely replaced by substitutes in the electronic sector. Despite such threats to the core product offering in this trend in the run up to 2004, the company could turn around this situation and use this threat as an opportunity to diversify in markets such as games and films as well as the development of non-traditional LEGO products. In the years preceding 2004, LEGO already had practice with diversification into direct retails with its very own LEGO stores and the launch of the ‘LEGO Land’ amusement parks. However this signifies as a substantial opportunity for further development.

After careful review of the LEGO Group website and the merchandise sold in stores, it is apparent that the LEGO Group offers a plethora of products for children to enjoy. To sum up a few, there are such products as the popular LEGO City which introduces children to their everyday environment from building Airport terminals and Fire Emergency stations. LEGO Creator lets you build three different items such as a cat, rabbit and a puppy, using all the same LEGO’s in a variety of ways. Of course LEGO goes on to expands its horizons with such collections as “Chima” which revolves around “Chi” a natural resource of the land that is the energy source and the power behind the eight animal tribes in the Lego

LEGO started in 1932, when a father and his sons began designing wooden toys. The idea started out very small, but they ended up becoming one of the biggest toy leaders in the world. Although they are a huge success and known globally today, that does not mean they never encountered roadblocks; they actually ran into quite a few, including competitors, lawsuits, and loss of revenue (Bigus, 2011). Like every company, LEGO brand has their strengths, weaknesses, opportunities and threats, presented using a SWOT analysis (Rothaermel, 2017, p. 130).

The case for LEGO’s change in strategy was due to the decline in profit and growth. The company was not up to date with the consumer and market trends. They did not have prepare for future scenarios or have a contingency plan, thus they were very unprepared for the changes in the toy

Lego, the toy industry was established in 1932. It’s more than 70 years of time period.