Lego case study analysis

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

On one hand, partnering with such supplier has offered the company the greatest freedom to operate. One the other hand, technological spillover and inventions came up from the developmental stage are also likely to occur. The worst case is that competitor might protect those inventions which prevent the LEGO Group form using their own innovation. Protection of those inventions is deemed necessary to the growth of the

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

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.

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 Corp was established in 1932 by founder Ole Kirk Kristiansen. With just 10 employees, they start crafting wooden construction toys. The most famous of these were the wooden duck. As the popularity of plastic toys rose in the mid-1950s, the company did away with wooden toys and started focusing on manufacturing plastic automatic binding blocks. As early as the beginning of the company, their motto was “Only the best is good enough.” High quality and safe products have been the focal point of LEGO Group for decades. Over the years LEGO Group has kept its word on that motto and has supplied millions of families with creative toys that last.

Everyone knows about The Walt Disney Company and The Lego Group. Whether it be The Walt Disney Company’s many theme parks (Disneyland, Walt Disney World, Shanghai Disney Resort), the different media networks (Disney Channel, Freeform, ABC), or the studio entertainment (Walt Disney Studios, Pixar), everyone has hear of Disney. The Lego Group is very popular as well. Aside from the colorful bricks that make amazing Lego sculptures, they also have theme parks called LEGOLAND. Many kids grow up playing with Legos, or have seen them in stores before. Both of these companies have an impact on children’s lives. While people may know about the companies

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

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, from the Danish words “leg godt” or play well, was founded by Danish carpenter Ole Kirk Christiansen in 1932 (Herman, 2012). Known for producing iconic studded plastic bricks that were enjoyed by both children and adults, Lego produced more than 30 Lego-based video games and, through licensing agreements, popular Star Wars and Harry Potter Lego sets (Baichtal & Meno, 2011). Lego also sold a series of Arctic sets including an Arctic Base Camp, Arctic Outpost, Arctic Helicrane, Lego Ice Crawler, and Arctic Snowmobile. Those sets sold for $89.99, $49.99, $39.99, $14.99, and $6.99 respectively. Lego’s 2014 film, The Lego Movie, grossed more

Based on the case study Lego appears to be using the Focus strategy. Michael Porter proposed three generic strategies Cost Leadership, Differentiation and Focus. Focus is a strategy where organization focuses on specific niche markets; this may include a particular geographic region or particular segment of customers. Organizations which use this strategy develop their products after having a study of dynamics of the segment and unique needs of customer. Lego before the appointment of the new CEO appear to use the focus strategy as their top priority was always to focus on innovation and creativity with taking profits into consideration. Add to that the case study also mention that Lego used to create products that primarily targeted boys. After the appointment of new CEO Jorgen Vig Knudstorp the company appears to have changed its policy form Focus to Cost-Leadership. Cost-Leadership is a strategy where organizations focus on gaining competitive advantage by offering products and services at the lowest possible price. They achieve this by increasing profits by reducing production cost and other way is to increase market share by reducing the prices of products compared to the competitors. Knudstorp after taking charge of Lego changed their focus on reducing the production

Product differentiation strategy: Lego was facing stiff competition from its Canadian rival Mega Blocks. They used the product

It is important to notify that Lego Classics and Make & Create (core products) double the sales in that year. In the same year the company was struggling with another category of the business that was not part of their core business the LEGOLAND parks, providing limited return to the company.

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).

Lego's key strengths may be seen as coming from both its brand recognition and its ability to use innovative