Lego Strategic Analysis

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.

2) Which of the generic strategies does Lego appear to be using based on this case? Provide support of your choice.

Ryan McMaken defends Lego’s gender marketing issue as he focuses on Lego primarily as a profit-seeking business, as well as a business who has proven to know exactly what they are doing. McMaken concentrates on how Lego’s introduction of their Friends Line increased the worth of the female construction toy industry’s from 300 million to 900 million dollars. Evidently, these Lego sets may appear stereotypical or sexist to some, but there are what many people prefer to buy. He explains that Lego, in a competitive industry, must aim to please consumers, meet their needs, and gain a competitive advantage. To do so, it is crucial to offer products that other companies may not; products that will satisfy the needs of all children. Therefore, after extensivea research, and various

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.

At that time, the performance winners for LEGO were speed (of delivery), and flexibility (wide range of products, volume and delivery adjustments at short notice). Cost, dependability and quality were not as vital. To achieve these objectives, LEGO had made several operational decisions: Speed: • Maintain multiple distribution centres, close to key markets: 5 in Europe, 1 in USA • Maintain high stock levels, of finished product, and components so products could be assembled quickly. Flexibility: • Supply retailers both large and small, from relatively close distribution centres • Frequent, small, orders accepted • Introduce new products to the range, and discontinue old

LEGO Group is very clear about their goal when it comes to early education. They are dedicated to their product and

The first node that the1958 Lego connects to is architecture because it allowed children to be creatve and innovated after the depressing Cold War. Using brightly colored and easy to use bricks influenced children to have fun critically thinking and experiment with artecture.

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

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.

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

LEGO Group was formed by a carpenter Ole Kirk Christiansen in 1932 in Billund, Denmark. The Word, LEGO was meant to attract kids of various age groups, it is derived from Danish phrase, “leg godt” meaning: “Play well”. Initially LEGO was produced as a wooden brick, with their motto, “Only the best is the best.” The LEGO Brick was produced in 1958 composed of interlocking tubes that offered unlimited building opportunities. The purpose of The LEGO Brick was to inspire creative and controlled problem solving, while adhering to common curiosity using your everyday imagination (Sandgaard Jensen). It was awarded “Toy of the century” by Fortune Magazine, as well as British Association of Toy Retailers. LEGOs was sold in more than 130 countries. A couple major products include: Pre-school products LEGO DUPLO, Play Themes LEGO city line, BIONICLE, and many more Licensed Products built up around movies or books also including a LEGO Education Board game. Market sizes category US, Australia, United Kingdom, New

The Progress Report is part of the overall reporting concept for the LEGO Group. The overall reporting setup consists of three independent publications that interconnect and together form the total 2009 reporting from the LEGO Group. Read more about the concept on the back cover of this report. The Progress Report, which you are reading now, is targeted to those who are interested in the detailed follow-up on progress of the LEGO Group regarding Environmental, Social and Governance (ESG) activities linked to the LEGO Group’s ability to deliver on the four promises given

It was 2003 and the LEGO Group, a standout amongst the most well known toy makers on the planet, was on the very edge of an enormous emergency. The organization was delivering an ever increasing amount, however the misfortunes were additionally

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