Strategic Management and Leadership

- A lot of kids growing up in the 70s and 80s had very positive memories of build LEGO and make things .They probably was a huge fan of Lego. So when these kids grew up and started having kids of their own (right around the 2000s), they were happy to buy Lego and will assent their children to play Lego rather than holding tablet or phone watched cartoon series whole day.

In this report, the association, Lego, its image and present business sector standing have been inspected in subtle element. Lego (adapted and trademarked as LEGO) is a line of plastic development toys that are made by The Lego Group, a secretly held organization situated in Billund, Denmark. The organization's lead item, Lego, comprises of vivid interlocking plastic blocks going with a variety of apparatuses, puppets called minifigures, and different parts. Lego pieces can be collected and associated from numerous points of view, to develop protests, for example, vehicles, structures, and working robots. Anything developed can then be dismembered once more, and the pieces used to make different articles.

LEGO is a Danish company that was established in 1932. LEGO started in a small carpenter’s shop and has transformed into one of the world’s largest toy companies and most recognizable brands (lego.com). Specifically, LEGO produces small plastic bricks that can be put together to create larger creations. Bricks are sometimes sold in packs that create a specific creation, such as Star Wars ships or police stations, or they can be sold in packs that let the consumers make their own creations using their imaginations.

My aim in this section is to convey my views regarding the fact that Lego is a global superpower in the toy industry. I will be analysing and evaluating the business strategies Lego has been incorporating in the last decade.

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

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.

Companies in the toy industries including Lego have ensured low suppliers’ bargaining power. Retailers play an important role in selling and distributing Lego’s company (Hjuler & Robertson, 2009).

Today the brand of LEGO seems to be as ever expanding as the product itself, but with a life span of just over 82 years the company must have had to adapt and change in this ever expanding world. Even just over the past 20 years things have moved on so rapidly especially in terms of technology. 20 years ago the first full-length animated film was a year away from the cinema (Toy Story: USA release – November 22nd 1995), Sony released the first PlayStation in Japan (December 3rd 1994) and the top selling toy at Christmas was the ‘Mighty Morphin Power Ranger’ Toys.

LEGO purchased a plastic injection molding machine in 1947 to create the plastic version of LEGO bricks (they were originally wooden), and then expanded to pursue the idea of a toy system where various toys would be included in a line of related products. Items such as doll furniture were also developed as LEGO Group looked to enter different markets. During the 1970’s the foundation of the company’s manufacturing facilities and research and development department were established to keep the manufacturing methods up to date. A LEGO production plant was opened in Enfield, Connecticut in the United States. This growth enabled The LEGO Group to continue expanding their product offering over the decades to eventually land at 6 product segments by 2007: pre-school products, creative building, play themes, licensed products, mindstorm NXT, LEGO Education, and LEGO games. The consolidated portfolio was meant to reflect the need for more challenging stimulation as children grow and develop.

In this Mandatory Assignment we had 2 questions witch we have answered. First, we made an internal analysis and assessed LEGO’s core competencies. Furthermore, we developed a strategy that will be useful for the company and help them to be on the first place for a long period. After that we used knowledge and skills from Statistics class to solve the second question.

Strategic Management, according to the text, involves conducting an environmental scan which includes customers and knowing competition, establishing goals, setting targets, developing an action plan, implementing the plan, and evaluating success (Hubler, 2014, p. 331) This is used to establish a company’s vision or mission. This process helps a company to gain awareness of things that they need to do in order to become more successful than they are or against their competition. This process begins when an organization realizes their need for change or improvement to a more competitive position within their market or when they are seeking some other status such as seeking Magnet status as mentioned in the text. (Hubler, 2014) There are three questions that need to be addressed when a plan is being implemented the questions are about where the company is currently sitting, where they want to go, and how they will get to their end goal. They then need to create an organizational vision or a mission. (Hubler, 2014) Strategic management boils down to being the foundation of the company, the structure, and is the source of power.

Video games are very complex and have developed immensely in the last thirty years. Lego Group is not a specialized company for video games and should therefore remove its interest in developing their online Lego Universe. It is imperative that the www.LEGO.com site be interactive and engaging as well as serve to promote their customer project designing feature which has proven successful. However, having a paid membership high end video game does not fit with the core image of Lego being a building toy manufacturer with a vision to develop children. Lego Universe should be scrapped as soon as possible and efforts should be directed to promoting successful lines of building toys.

LEGO, the company has always been known by kids and parents alike for its colorful building bricks however between 1997 and 2004, LEGO stretched its product lines to include movies, clothing, video gaming and event theme parks. Unfortunately, these activities generated limited returns and were capital intensive as a result, LEGO’s bottom line plummeted. LEGO “strayed too far” from its core business of manufacturing building blocks and ventured in industries which it no knowledge or specific skills sets to compete in ("Fun and Games: The LEGO Success Story" 2). Also, a lack of financial and product profitability analysis meant that management had no idea which products were making money and which were not producing adequate returns on investment. Another problem was that retailers were constantly overstocked with products which offered diminishing margins as clearance offers ensued (Ashcroft 14). This was due to a lack of

The Lego Company is the world’s second largest toy maker and is primarily known for its trademarked plastic bricks. It has branched out with successful video game and movie franchises in recent years and although it has some prominent competitors, none but Mattel have managed to compete at its level. The company had found success, after struggling in the early 2000’s with near bankruptcy, with 2016 marking the first year of single digit sales growth in nearly a decade. This, coupled with increased marketing expenses of nearly 35 million over 2015, have led to flat-lining sales and wasted efforts. (Coffee, 2017)

LEGO, being one of the leading toy companies in the world, is very well known in Europe and Americas. As LEGO has recently began accelerate its expansion into Asia, China contains the largest portion of the company’s market share in Asia. Besides, Chinese toy industry is the fastest growing toy industry in the world. This serves many advantages for LEGO to become bigger in the region. Therefore, we examined the current situation of the company in China in many different ways, and eventually brought a strategic solution to the growth of LEGO in China by increasing its market share.