Lego case study Essay

Decent Essays

Program : Global MBA
Course : Strategic Thinking


Discussion Questions for “LEGO”

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).
2. Why did Knudstorp’s turnaround strategy work? In your opinion, which actions were the most effective? Which actions were the least effective? Be specific.
3. Should LEGO launch the new line of board games?


Ans 1 : …show more content…

All the initiatives like laying people off, streamlining things, globalization was like going by the turnaround book and yet the financial picture grew worse

Secondly, the company's growing complexity was choking it and was a big cause of concern. Adding more bricks made products harder to assemble, forecasts harder to determine, and inventory harder to manage. The complexity had a multiplier effect that went through the entire supply chain

Thirdly, the LEGO Group had also gotten too far away from the core values it had been building on for the better part of a century.

Ans 2

Jorgen Knudstorp was just 35 years old when Kjeld promoted him from director of strategic development to CEO in 2004. Unlike Plougmann, his turnaround attempt succeeded.

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)

Knudstorp recognized that innovation was part of that core, but he'd also seen the result of unconstrained creativity, so new product design began to be informed by market research, user feedback, and how well the toys

Get Access