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Case Write Up for Lego

In: Business and Management

Submitted By aolson421
Words 541
Pages 3
Alisa Olson
MGT405 Section 7
Sunduramurthy
29 November 2012

Case Write Up: LEGO Group

LEGO Group has been a successful company in the toy industry since they started in 1949. As of 2010, LEGO remained a privately held company by the Kirk Kristiansen family. Annual sales reached an all-time high equaling over $3.7 billion. The company’s strongest lines were LEGO Star Wars, LEGO City, and LEGO DUPLO. Even though the company has maintained a competitive advantage, they face some seriously threatening issues. Some of the current issues they face are maintaining patents, company acquisitions, court battles, and new competition. In 1984, TYCO introduced Super Blocks, which were almost identical to the plastic brick design that LEGO has. TYCO had advertisements that stated “if you can’t tell the difference, why pay the difference”. LEGO launched a four year lawsuit against them, but by 1988 the patent for LEGO’s building block design expired, so they lost the lawsuit. All the effort against TYCO was wasted. LEGO should have renewed their patent to prevent incidents such as this one from happening. Once this patent expired, the barriers of competition were lowered significantly in the building toy market. In 2009, Disney acquired the comic book company Marvel Entertainment for $4 billion. This provided Disney with control over Marvel’s vast catalogue of over 5,000 comic book characters to be used in future publishing, movie production, and licensing operations. This was a threat because it placed a large amount of entertainment licensing under the control of one organization. Mattel, Hasbro, and LEGO all had individual licensing agreements with Disney to produce toys, but Disney had a long and favorable history of licensing toys with Mattel. In addition, Hasbro had an existing license agreement to produce Marvel toys and games until 2017. This left LEGO at a...

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