The Lego Group Analysis

The Lego Movie is a film that focuses on the impression of life in a Lego world but misses key concepts incorporated with Lego. At a first impression, the Lego Movie is viewed as a movie directed towards children to stir their imagination but this would be ironic to what is being portrayed in the film. By analyzing the ideas behind the movie in a sociological process, distinct themes can be connected and reflected within reality. The Lego Movie can be viewed in a functionalist perspective that is influenced by the conflict theory within the divided Lego society. To connect the sociological views to their society, one must understand how they interact and why they interact the way they do.

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

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.

By 2004 Lego was in considerable trouble; it had made a loss of approximately £200m; sales fell by 40%. One reason for this was lack of success in moving into new markets, such as computer games and clothing. However, a major cause for the financial woe was due to issues in the supply chain; costs were not being squeezed out, and the increase in specialised LEGO models had led to an explosion in the total number of unique bricks; each requiring expensive moulding, production and inventory. LEGO rightly decided to address this supply chain cost issue, and turned to Flextronics, a company with considerable experience in

Introduction ............................................................................................. 2 Wider Debate Of Strategy .................................................................. 2 Placing The Article In The Wider Debate.................................... 4 Strengths & Weaknesses of the article......................................... 4 Conclusion................................................................................................. 6 References................................................................................................. 7

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.

Through studying the entire retail toy industry, we have been able to understand the complexity of the industry in which Toys "R" Us operates. Upon completion of the analysis, we realized that the industry is growing stably,

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.

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

More young children prefer the game in Ipad video game and online game rather than traditional toys; therefore Toys R Us is facing on high threat of substitution.

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 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