Marketing and Lego

2048 Words Nov 4th, 2012 9 Pages
Executive Summary
Since LEGO Group’s (LEGO) inception in 1932, the world-famous toy maker overcame numerous challenging obstacles to become the leader in the building toy segment. By 2010, LEGO had witnessed all-time high annual sales of over US$3.7 billion to become the fourth-largest toy manufacturer in the world. Upon analysis of LEGO’s strengths through Resource-Based View, LEGO holds few key competitive advantages attributed to their success: strong brand name and innovative culture. These traits are not imitable or easily substitutable.
However, the competitive landscape has drastically increased in the building toy industry as analyzed with Porter’s Five Forces. Essentially, the deteriorating barriers to entry from loss of trademark
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SWOT Analysis (Appendix B)
LEGO is a globally recognized brand with long history of producing creative and educational toys and has established significantly positive image to the consumers. Thus, LEGO can embrace its reputation and knowledge in the industry to further diversify its product offerings. LEGO has many loyal parent customers buying LEGO products for their children. It is important to understand that the consumers are not the buyers of the products. Once the active consumers of LEGO, the parents trust its products and LEGO is deeply rooted in their personal experience. However, new product lines that reflect the current popular children’s culture face the challenge of appealing to the children and answering strict demands of parents.
Nonetheless, LEGO has weaknesses as well. Digital Design Program offering customized product offering with delivery can be assumed to be incurring extra costs since LEGO cannot leverage its economies of scale. LEGO’s loss of patent protection is also the weaknesses that other competitors exploit. As competitors introduce plastic brick products that are compatible with the LEGO brick designs, the consumers are misled into buying the products thinking that they are LEGO. As competition and licensing control intensify to threaten LEGO, the organization should avoid expensive/additional marketing and legal campaigns in the building blocks segment, and divert such resources to

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