The Case Of Lego : Change Of Strategy

1171 WordsNov 3, 20155 Pages
3. THE CASE OF LEGO CHANGE OF STRATEGY The company LEGO (Appendix 1), was far from the reality when in the year 2000 the famous Bricks were named as ‘the toy of the century’ by Fortune Magazine. the numbers were reflecting a different reality when in 2003 and 2004 the losses were of more than $400m on annual sales of over $1b (Lego case of study 2014). Once they analysed what were the main issues that led the company into that situation, two were the main problems. First of all, the product portfolio was unprofitable, more than the 94% (Breen 2013). They adopted many directions by diversifying in excess and lost their focus and went too far from being the initial toy manufacturer that they wanted to be, they diversified in new areas such as Video Games, Television, Retail Stores and the famous Theme Parks. Moreover, the products were developed based on what the company believed the consumers wanted (O’Neill 2010). The group completely forgot one of the keys of success of every company, the customers and their needs. The products that had given the company success, were forgotten. For that reason, the new strategy was based to revive those ‘core products’ and bring with them back the values that their founders set at the beginning (Breen 2013). (See Appendix 2) 2.2 MARKETING MIX -PRODUCT Lego has many diversified products, but the base of all of them are the plastic Bricks, which actually makes the company successful as the result of the possibility of rebuilt the

More about The Case Of Lego : Change Of Strategy

Open Document