Lego 's Creative Toy Line

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.

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.

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.

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

Growth strategy: With the help of growth strategy, LEGO introduced new toys in the market. Initially LEGO was something that boys liked playing with but Knudstorp introduced LEGO for girls thus targeting girl child audience which increased his market. Not only this, they also entered the video game sector by making virtual games after collaborating with Sony (which was ruling the gaming console market at that point of time). Later, they started making figures with famous characters from Hollywood movies (Star wars, Batman, The Avengers, etc.).

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

As their name and ideal, Lego has been beloved by the children as well as the parents for decades. Not only as plastic toy bricks, but also effective educational tools, the LEGO Company enjoyed continuous growth and broaden the global brand value. The LEGO brand moved to third place in 2002/2003 with only Coca-cola and Kellogg having greater respect among families with children. Even though as the overall toy market faces challenges, LEGO’s revenue and profits are increasing rapidly, especially since 2005. This profitability didn’t change even in the current recession in the global market. The LEGO Group achieved record-breaking profits in

Currently, LEGO is one of the world’s leading manufactures of play materials. The company is guided by the motto, “Only the best is good enough,” committing to the development of children and aiming to inspire and develop the builders of tomorrow through creative play and learning. Valuing imagination, creativity, fun, caring, quality, and learning is what drives LEGO Group. By sticking to these values, LEGO holds themselves to the expectations that the people have towards the company and its products.

LEGO A/S Aastvej 1 DK-7190 Billund, Denmark Tel: CVR-no: Residence: Reporting Year: Internet: E-mail: +45 79 50 60 70 54 56 25 19 Billund 1 January – 31 December www.LEGO.com sustainability@LEGO.com