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 CHAIN ANALYSIS FOR LEGO

LEGO bypassed intermediaries by developing own stores across Europe and USA. It also provided an online medium for shopping. Later, LEGO focused on building efficient relationship with retailers and robust distribution channel. This will help LEGO to improve its service level to retailers by creating an efficient distribution channel that made the products available