...Principles of Marketing Management – Case Study of LEGO Chapters: • Introduction ------------------------------------------------ 3 • Company Background ----------------------------------- 4 • Marketing Focus------------------------------------------- 5 • SWOT Analysis -------------------------------------------- 6 – 7 • Time Series Analysis ------------------------------------- - 8 – 9 • Product Analysis ------------------------------------------ -10 – 11 • Suggested Marketing Plan --------------------------------12 – 13 • Conclusion --------------------------------------------------- 14 • References --------------------------------------------------- 15 INTRODUCTION – For a company that has firmly established its foothold for the last 75 years, developing a futuristic three – year marketing plan involves critically analyzing the current marketing strategies and stating new strategies to be implied in the next few years. In this paper, four current marketing development plans namely SWOT Analysis, Time Series Analysis, and Market Product Analysis are dealt in a detailed way. Awarded the “Toy of the Century” at the end of the millennia, LEGO Group has nurtured generations of children and pre-teens with its creative and learning construction blocks. Over the years, LEGO has developed newer version of...
Words: 2946 - Pages: 12
...Potter Value Chain Analysis The value chain analysis identifies all of the activities and strategies the organization must perform to conduct a successful business. (Potter) .The activities are classified into primary and support activities. Each of the activities performed will add value to the product and services provided by an organization. LEGO had incorporated various strategies to gain a competitive advantage. LEGO’s inbound logistics was not in proper shape. There was no control over the inbound logistics and management of inventory. The supply and demand of the goods was not in parity. In most situations, the forecasting was done dynamically without any evaluation of estimates. Later, LEGO management team synchronized the sales supply and demand by starting a sales and operations planning process (S&OP). This technique helped LEGO to optimize their demand planning, forecasting and inventory management. LEGO can accurately estimate their demand, supply and estimate customer demand for particular product during a given period. Using demand planning to develop accurate forecasts is critical for effective inventory management. Forecasts are compared to inventory levels to ensure that distribution centers have enough, but not too much, inventory to supply stores with a sufficient amount of product to meet demand. The optimal amount of raw materials was released to cater to the demand. This played a pivotal role in building an efficient supply chain management. VALUE...
Words: 797 - Pages: 4
...3 STEPS TO LEGO GROUP FINANCIAL TURNAROUND * Easy, Fast & Quick Results EXECUTIVE SUMMARY Rivkin, Thomke and Beyersdorfer (2013) suggested in 2004, the market size of the toy industry is worth $61% billion in the wholesales revenue, with a steady growth of 4% per year in the retail market for toys. Thousands of toymakers flourish the market to serve global demand while keeping track of the 3 new trends in the industry which are toys demand rise while product life cycles decline, children has less time to play, and lastly increase demand of technology integration in physical toy or online worlds. Changes in conduct of competitors have change as witnessed by manufacturing in Asia, entering diverse retail channels and engaging in heavy marketing efforts. Therefore, we recommends LEGO Group to first, bring back LEGO DUPLO concepts and offer to unexplored market by establish strategic partnerships. Second, increase investment in R&D of new product designs and innovations. Third, adopt internal supply chain monitoring system and LEGO retailers’ system integrator. As external analysis has suggested increase of retail competition sector in the toy industry and this will have effect on LEGO Group because internal analysis shows that firms have high operational costs and as a result the firm is making no profit. By implementing these recommendations LEGO Group will achieve lower operational cost, establish sustained competitive advantages which will led to higher market shares...
Words: 1559 - Pages: 7
...deals with The LEGO House, an experience venue LEGO built by The LEGO Foundation. The research design is using positivism paradigm with qualitative interviews in an inductive approach where the design science is used with a Socio-Technical perspective (Bækgaard, 2011). 1.1.1 Stakeholders To make the problem background and problem formulation clear a simple organization chart has been developed. Table XX authors creation The LEGO Foundation has 100 % ownership of The LEGO House. The LEGO Group has a department called Corporate IT marketing. Corporate IT marketing from The LEGO Group is hired to find a...
Words: 1633 - Pages: 7
...INTL 4400 – Assignment 1 2012-2013 LEGO Group: Building Strategy Professor: Kelly Lecouvie Celeste Chan, Richard Guo Table of Contents Executive Summary 1 Problem statement 2 ANALYSIS 2 External Analysis - Porter’s five FORCES: 2 Internal Analysis – Core Competency 4 Main Issues 4 ALTERNATIVES 5 Recommendation 7 Appendices 8 APPENDIX A – LEGO’s VALUE CHAIN 8 APPENDIX B – Core competencies & LEgo 9 APPENDIX C – FOUNDATION & DIRECTION OF LEGO 10 Problem statement LEGO as a company has withstood many years of changing business environment, and has grown from creating wooden toys to interchangeable blocks, and eventually becoming an international symbol of innovation. It is again facing a changing environment, with its patents expired, its rising number of competitors, and facing losses in court as well as loss of market share to its competitors. ANALYSIS External Analysis - Porter’s five FORCES: Bargaining power of suppliers: LEGO’s suppliers have low bargaining power. After Jorgen Vig Knudstorp took over as the director of strategic development, he was able to cut 80% of LEGO’s suppliers to improve efficiency. The technology needed to create LEGO’s bricks is not specialized, since the company has in house machines to create the blocks. From the above two points, it’s apparent that the bargaining power of suppliers is low, since their services are easily substitutable and disposable. Bargaining power of customers: The bargaining...
Words: 2192 - Pages: 9
...model 4.1 Bringing Back the Bricks 4.2 Improving Quality and Logistics 4.3 Lego Turnover 4. Conclusion 5. Recommendations 6. References Executive summary: The purpose of this report is to analyze the Lego’s turnaround and business model in light of its competitive position from approximately 2003 – 2013. This report will includes the aspects such as new product launch strategies, new collaborations which contributed to the creation of superior value and changes to the business model. It also provides the solutions for Lego’s continues competitive success and recommendations for the future based on what will sustain competitive advantage. Introduction: In 2003, the Lego group was about to bankrupt, as many of its innovative efforts like Clikits crafts sets which were introduced for girls, theme parks and Galidor, an action figure supported by the television show were all unprofitable and were failed outright. The Lego group had a loss of over 400 million dollars on its annual sales with just over 1 billion dollars. The Lego group was compelled to take a look at its every operations including overheads, costs, marketing, sales, margins and product offers. The company also sold off its non – performing assets like Legoland parks. Then, the company started to bring new business models and innovations with the new management, which leads the Lego...
Words: 1732 - Pages: 7
...The LEGO Company in Asia 1 2 INTRODUCTION .................................................................................................................. 3 THE LEGO GROUP ............................................................................................................. 6 2.1 PRESENTATION ................................................................................................................ 6 2.2 HISTORY ............................................................................................................................ 7 STRUCTURE OF THE PROJECT ..................................................................................... 11 3.1 INTRODUCTORY PART .................................................................................................. 11 3.2 THEORETICAL PART ...................................................................................................... 12 3.3 EMPIRICAL PART ............................................................................................................ 12 3.4 ANALYTICAL PART ......................................................................................................... 13 METHODOLOGY ............................................................................................................... 14 4.1 CHOICE OF THEORY ...................................................................................................... 14 4.2 EMPIRICAL CHOICES .......................................
Words: 46146 - Pages: 185
...Tyler Lubben Marketing 442 LEGO Case Analysis LEGO experienced many problems throughout many years, but none of which had to do with creativity or innovation. The problem was 100% operational, and how the company manufactured and distributed LEGO around the world. Years of continuous growth added layers of complexity to LEGO’s operations. This ultimately led to Kjeld (The CEO at the time) to step down in 2004. Knudstorp would become the new CEO and would assemble a leadership team of senior executives and managers to start analyzing every part of LEGO’s supply chain operations as a whole. Another main problem was to identify new markets where it can expand its product line and business operation. LEGO group as a whole had many strengths that are worth noting. One of the many strengths that sets them apart from the competition is there overall innovation. The ability for them to continuously make products that continually attract more consumers and increase brand recognition is second to none. Along with their strong innovation skills, the diversification of products that LEGO group has is another reason why they are a world-renowned company. They have diversified its brand into Video Games, TV and movies. The main weakness that I see with the LEGO group is that their product designs are very easy to duplicate and copy. LEGO group needs to think about moving their production operations somewhere where it would be cheaper to produce. The way they are doing it now works...
Words: 502 - Pages: 3
...Assignment 1: Individual case analysis report Mahmud Safari (21295746) 1 Individual Case Analysis Report LEGO (A): The Crisis Mahmud Safari 21295746 Assignment 1: Individual case analysis report Mahmud Safari (21295746) 2 Table Of Contents 1.0Introduction 2.0 Analysis of General Environment 2.1 Economic 2.2 Socio-‐Cultural 2.3 Global 2.4 Technological 2.5 Political/Legal 2.6 Demographic 3.0 Analysis of the Industry Environment...
Words: 4389 - Pages: 18
...! ! ! ! ! ! ! ! ! ! ! ! The LEGO Case Study 2014 ! ! ! ! ! ! ! ! ! ! The A CONTENTS ! ! ! 1! ! 2! ! Introduction! ! ! ! ! 3! ! 4! ! 5! ! 6! ! 7! ! 8! ! Difficult start to the decade 2001.! Signs of Recovery 2002.! Hopes dashed - 2003.! LEGOLAND parks.! LEGO Brand Stores.! The Knudstorp Review.! Financial Focus - the ! Oveson addition. ! Back to basics and the limit to adjacencies. ! ! ! ! 9! ! 10 ! Developing the strategy ! why do we exist? ! 11 ! First the action plan - first ! things first. ! ! 12 ! Summary and Conclusions! ! 13 !Appendices ! ! 13.1 Knudstorp on! ! communication ! ! 13.2 References and slides The A 1 Introduction ! In 2014, LEGO® announced record results. In the financial year 2013, revenues had increased by 10% to 25.4 billion danish krona. Profits before tax were 8.2 billion DKK. The company had once again delivered an impressive operating margin of 33% before tax.! ! In US dollars, the company had achieved $4.5 billion of revenues and profits of $1.5 billion. Revenues had increased from just over $1 billion some seven years earlier. LEGO® had replaced Hasbro to become the largest toy company in the world second only to Mattel. ! ! In just eight years, revenues at the Danish toy manufacturer had tripled. The company had turned around a loss of 2.5 billion krona in the financial years 2003 and 2004 to an operating margin the envy of high tech stocks around the world.! ! ! ! ! The...
Words: 6708 - Pages: 27
...| Lego: One More Brick In The Wall? | | | 1. How has the mission definition of Lego evolved overtime? Is it relevant today? How does this definition shape Lego's strategy? First we need to define mission. Mission is the purpose of the company it should be market-oriented, meaningful and motivating. They shouldn’t simply describe what the company sells; they should “emphasize the company’s strengths in the marketplace“. Since the beginning of Lego the mission was to produce quality toys. Like many other companies, they simply described what they were selling instead of reveling their strengths and motivations. In 2004 Kjeld Kirk Kristiansen stepped down as chief executive and hired Jorgen Knudstorp to run the family company. One of the first things Jorgen did was changing the mission to one that was truly oriented “To inspire and develop the builders of tomorrow” which they explained was driven by their “ultimate purpose is to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future – experiencing the endless human possibility“. Nowadays this change revels that not only they were able of distinguish themselves from the other competitors but also create a brand that is known by is premium quality and creativity. 2. Prior to 2004 was Lego focused on its products or its marketplace? By analyzing the case we see that 2004 was...
Words: 1488 - Pages: 6
...------------3 1.1 Lego design-------------------------------------------------------------------3 1.2 Manufacturing operation----------------------------------------------------3 1.3 Reasons for company’s success--------------------------------------------3 2 current business and operation strategy--------------------------------------3 3 Strengths and weakness-------------------------------------------------------3 4 Order winners and qualifiers-------------------------------------------------3 5 Environment analysis---------------------------------------------------------3 6.1 external analysis--------------------------------------------------------------3 6.2 Forces analysis---------------------------------------------------------------3 6 main expectations-------------------------------------------------------------3 7.3 main expectation--------------------------------------------------------------3 7.4 improvement from the relationship with Flextronics---------------------3 7 key challenges-----------------------------------------------------------------3 8 key issues-----------------------------------------------------------------------3 Reference---------------------------------------------------------------------------3 Appendix---------------------------------------------------------------------------3 Abstract This report is based on the case study of Lego Group’s outsourcing journey...
Words: 2165 - Pages: 9
...! ! ! ! ! ! ! ! ! ! ! ! The LEGO Case Study 2014 ! ! ! ! ! ! ! ! ! ! The A CONTENTS ! ! ! 1! ! 2! ! ! 3! ! 4! ! 5! ! 6! ! 7! ! Introduction! ! ! ! Difficult start to the decade 2001.! Signs of Recovery 2002.! Hopes dashed - 2003.! LEGOLAND parks.! LEGO Brand Stores.! The Knudstorp Review.! 8! ! Financial Focus - the ! Oveson addition. ! 9! ! Back to basics and the limit to adjacencies. ! ! ! 10 ! Developing the strategy ! why do we exist? ! ! 11 ! First the action plan - first ! things first. ! ! 12 ! Summary and Conclusions! ! 13 !Appendices ! ! 13.1 Knudstorp on! ! communication ! ! 13.2 References and slides The A 1 Introduction ! In 2014, LEGO® announced record results. In the financial year 2013, revenues had increased by 10% to 25.4 billion danish krona. Profits before tax were 8.2 billion DKK. The company had once again delivered an impressive operating margin of 33% before tax.! ! In US dollars, the company had achieved $4.5 billion of revenues and profits of $1.5 billion. Revenues had increased from just over $1 billion some seven years earlier. LEGO® had replaced Hasbro to become the largest toy company in the world second only to Mattel. ! ! In just eight years, revenues at the Danish toy manufacturer had tripled. The company had turned around a loss of 2.5 billion krona in the financial years 2003 and 2004 to an...
Words: 6708 - Pages: 27
...Introduction Since LEGOs inception in 1932, the company has not only experienced extreme pressure from competitors, but it has overcome numerous challenging obstacles from the external environment to become the world’s largest toy manufacturer (Financial Times, 2016). Upon analysis of LEGOs strengths through Institutional Theory (IT) and Resource-Based View (RBV), this essay aims to combine these two theories to explain LEGOs internationalisation process. Firstly, the two frameworks will be used to analyse the period (1932-1990s) where LEGO established a culture centred on product quality and innovation. As a result, the company achieved legitimacy within the institutional environment which spurred their international expansion. Within this analysis, the strategic decision to enter specific markets, and the methods they used to so will be outlined. Secondly, LEGOs recovery from their financial crisis in 2003, is an excellent example of how new capabilities can be made, and existing ones rebuilt to deploy resources using organisational processes to produce a desired effect. Institutional theory Institutional theory describes companies that operate in foreign markets conform to the institutional environments in order to gain legitimacy from the perspective of other institutional bodies. These institutions are the rules, norms and beliefs that define socially acceptable behaviour and therefore influence economic activity (Scott, 1995). The degree to which a company...
Words: 4588 - Pages: 19
...Situation Overview of the LEGO Group • Market position: Niche player in a global toy market & No.1 in construction toy category • Core Competencies: Strong brand, high quality products and innovation abilities • Recent performance: experienced some major losses but is turning better 2. Problem Statement • Issue Definition: Being a niche player in a tightening market, How can LEGO group achieve sustainable profits of 13.5% and growth rate of around 7% in the coming years by leveraging its core competency? • To solve this issue, the company made a three-phased shared vision plan in which we based our strategies on [pic] 3. Strategies 3.1 Short-term Strategies: Profitability Focus 3.1.1 Interpreting the Profitability Goal • To achieve reasonable margin compared to major industry peers, that is operating margin of 13.5%, according to future expectations made in 2006 Annual Report • To maintain sustainable profitability in the relatively cyclical toy industry 3.1.2 Strategies and Implementations to Meet the Goal 3.1.2.1 Product Strategies: adjust product portfolio and build defensive core products • Focus on pre-school/infant toy segment in which the demand is driven up by “age compression” and is less affected by come-and-go entertainment fashions • Continue reinvigoration on LEGO classic toys, which are less...
Words: 637 - Pages: 3
