Lego Group And Their Entrance Into The Board Game Industry

1527 WordsApr 25, 20177 Pages
In a recent case study involving LEGO Group and their entrance into the board-game industry, there was speculation of weather or not the firms entrance would be successful or not. Applying Porter’s Five Forces Framework I have concluded that this entrance, though bold, is not beneficial to the future growth of the company. For example, LEGO has dominated the toy market for years, even surpassing Mattel, their board games are unique because they are not limited to the parameters of the organization that created it but rather the customers imagination. However, in the mature market, which is dominated by brands such as Hasbro and Milton Bradley, LEGO’s foray into board games is limited by the power of the buyers because LEGOs are expensive…show more content…
buyer costs, supplier cost/performance). c) Provides analysis of customers to serve. For example, in order to widen the gap and create a competitive advantage the value chain shows what products appeal to certain customer segments. A value chain can be utilized to adjust the scope of operations. d) Value chain can also highlight areas where costs could be lowered via an inexpensive alternative and therefore widening the wedge. 29. The three tests of a good corporate strategy are as follows: a) The attractiveness test – an attractive firm/niche will have products with minimum alternatives or substitutes. b) The cost-of-entry test – cost-of-entry into a segment must be low and therefore, loss on return on investment will also be low. c) The better-off test – Primarily for direction decision-making, the better-off test focuses on whether or not actions benefit the firm. For example, producing a product that would share the segment with another, or the merger and acquisition of divisions/subsidiaries. There must be apparent benefits. 30. Buyers and Suppliers drive the market in both supply and demand. Therefore, they are crucial to the competitive advantage of a firm. For example, if suppliers are to increase their costs in shipping the products to their destination, the price may rise. As a result the buyer may purchase a substitute or alternative product and therefore lowering the sales of the firm.

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