...Qn1. Explain how the development of strategy at the LEGO Group reflect the key characteristics of strategic management The LEGO Group has a very rich and proud history that span nearly over 100 years. The LEGO Group’s core success would be their traditional yet innovative toy ‘brick’. This brick is so popular till date mainly due to its unique interlocking principle that offers unlimited building possibilities. It encourages one’s mind to be creative and allow the imagination to keep going. Qn2. Features of the external environment that influenced strategy development at the LEGO Group Qn3. Resources and competences of the LEGO Group that enabled them to regain their successful position in the global toy market Lego has managed to regain successful position in the global toy market through having capable human resources and financial resources as well as having the competency in creativity, innovation and quality control. Capable human resources Lego’s Chief executive recognized and acknowledged the problems LEGO are facing. * Kids were getting older younger and leaving Lego sooner. * The channel has changed. Companies, like Toys 'R Us and Walmart, that sell Lego had become more sophisticated. * Many of Lego's patents had expired leading to increased competition. * Rivals were outsourcing productivity to China and other, cheap economies whereas Lego was based in Denmark. * Lego needs to reduce debt, increase growth and to improve profitability...
Words: 561 - Pages: 3
...LEGO Paper: When we were looking for a company to present at the marketing pitch, LEGO was the first thing that came to our minds. Although being a toy company for mostly little children, people are fascinated with this company, especially with their brilliant marketing. The LEGO movie, which most of our group saw was the latest coup in LEGOS brilliant marketing strategy that perfectly connected both children and adults. In 2003 the company almost got bankrupt due to loosing sight of their core product. In 2004 the former Mc Kinsey consultant Jorgen Knudstorp took over as CEO and managed to turn around the company in a text book approach. From the time Knudstorp entered the company to 2010 LEGOS revenue had grown 165% in a stagnant toy market. By cutting costs, focusing on their core products and especially the developing new marketing strategies, the company managed to become the biggest toy maker in world in 2014, overtaking one of the biggest competitors Mattel. We constantly came up with new ideas, how to innovate LEGOS strategies, but soon found out that literally all of our suggestions have already been implemented. Our admiration for this company only grew along the way, although it was rather frustrating to get excited about a new idea, just to find out that LEGO has already done it. Everything from watches to furniture to clothing has been done before. Along the way of researching we stumbled upon LEGO education, a branch that was introduced in order to promote...
Words: 559 - Pages: 3
...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 their products...
Words: 2946 - Pages: 12
...that rivals with Lego about children playtime, such as other traditional toys or computer games. Children get bored fast and switch to substitutes. They prefer to play with more sophisticated toys. Substitutes come from the entire toy industry as well as the electronic gadget market. There are no switching costs for substitutes and the prices of substitutes vary, the barrier to switch is therefore low. Bargaining Power of Customers (pressure high): The pressure from customers is high. Customers of Lego are retailers such as Wal-Mart or Toys”R”Us. These have the bargaining power over lead times and price. For example, if Lego does not provide the toys quickly enough at Christmas, Wal-Mart could take Lego out of the shelves. Bargaining Power of Suppliers (pressure high): Lego brick stones are made of plastic. Plastic is produced with oil and there is no chance for Lego to bargain with oil companies. Fluctuations in oil prices directly affect Lego’s margin. Competitive Rivarly (pressure low): There is Best-Lock from Hongkong and Mega Brands from Canada. Both compete with lego by low prices. Lego has a strong brand image and brand loyalty among customers and can charge premium prices. Parents know Lego because they played with it themselves. As the parents are the ones who pay the toys and as they are the force that often decides over children’s playtime, they will be the ones who make children play with traditional toys rather than computer games. Lego has therefore a critical...
Words: 349 - Pages: 2
...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
...Part 1: Background info In 2004, Lego found itself losing up to $1 million dollars a day (page 39), a position no big company wishes to find itself in. It had been determined that new leadership was vital to the company’s survival. As a result, Jorden Vig Knudstorp took over as CEO five years later. Knudstorp immediately noticed poor internal organizational structure that ultimately resulted in frustrated retailers and less shelf space (page 39). Knudstorp successfully cut production costs by creating new designs. He also successfully introduced new markets for Lego products, such as movie collection and video game products targeting adults and girls. From within the organization of the company, Knudstorp successfully shifted the culture away from ineffective and costly innovation and geared more towards profit. Some of these organizational changes included incentives for developing cost cutting methods, innovation and sales. He also took the initiative to create new markets in the virtual world through video games and movies (page 40). With these changes brought about by Knudstorp, Lego found itself in a situation where they were successfully developing new technology, new methods and a more simplified information of enterprise systems, all which were cost effective and ultimately brought the company back to success. Part 2 (discussion questions at the back of the book) The key change in business strategy was to cut costs and gear more towards profit. The objective was...
Words: 746 - Pages: 3
...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
...Caso LEGO 1. Why did LEGO's first turnaround effort (Ploughman 1999-2004) fail and its second attempt (Knudstorp, 2004-2010) succeed? La administración de Ploughman(1999 -2004), fue afectada por factores externos al Grupo LEGO. Debido a que la compañía se encontraba en una industria altamente competitiva, con productos cuyo ciclo de vida era cada vez más corto, por lo difícil que resultaba diferenciarlos, entró en una guerra constante en la que la competencia ofrecía imitaciones a menores precios. Otro de los factores que influyó en el retroceso de la empresa fue el hecho de que los niños contaban con menos tiempo para jugar, por otras actividades extracurriculares, reduciendo su tiempo libre. Además, la introducción de los videojuegos y actividades en Internet, redujo la etapa de niñez y perdiendo el interés por los juegos para pequeños. Ploughman decidió atacar con una estrategia demasiado agresiva, que consistía en diversificar sus productos. Hasta llegar a un punto en el que era demasiada la diversidad de productos y no existía ningún control para limitar la diversificación. Pasaron de ofrecer únicamente juguetes a invertirle en productos como camisetas, relojes e incluso la apertura de parques temáticos. Ellos esperaban que al incluir estos productos en su portafolio les generaría mayores ingresos, pero sucedió lo contrario, puesto que la inversión fue muy alta, aumentando sus costos de operación y generando un inventario “slow-moving” con una retorno sobre la inversión...
Words: 1179 - Pages: 5
...Appendix 1 BCG Matrix (business units – LEGO products) A Cash Cow – will be such products as LEGO Star Wars, LEGO City, LEGO DUPLO & LEGOLAND, which are the strongest selling products of LEGO of all times and with constant big market share. A Star – will be such products as movies or comics based brick sets ( Harry Potter, Spiderman, Batman, Indiana Jones, Sponge Bob ) which will have big market share and big market growth while the general popularity of the movie or comics. And Digital Design Service on LEGO web site. A Question Mark – LEGO products that are in a growing market, but they do not have a high market share, such as LEGO Soccer, LEGO NBA Basketball, Discovery, Bionicle, NHL etc. A Dog – will be movies or comics based brick sets that already lose their popularity. Appendix 2 Stakeholder Map Stakeholders: | Expectations: | Kristiansen Family | Brand value, profits, company growth | CEO Jorgen Vig Knudstorp | Management development, company growth | Consumers | Appropriate cost, high range of products | Competitors | Higher market shares, | Suppliers | Better supply agreements, company growth | Employees | Workplace, salaries | Disney | Appropriate fees for licensed rights | Appendix 3 Porters Five Forces Analysis Level of rivalry (medium) The overall level of rivalry may be seen as relatively intense for the LEGO group in the run up in 2010. While LEGO occupies a strong position in the market for...
Words: 711 - Pages: 3
...------------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 Group A short presentation 2011 2 The LeGO GrOup 2011 Contents It all began in 1932 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The LeGO Group in key figures . . . . . . . . . . . . . . . . . . . . . . 5 Focus on growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Idea and production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 LeGO® products for all children . . . . . . . . . . . . . . . . . . . . . . .9 The LeGO history - in short . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 The minifigure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 LeGOLAND® parks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 LeGO community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Learning through play . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Fun LeGO facts . . . . . . . . . . . . . . . . . . . . ....
Words: 6502 - Pages: 27
...go, Lego is for Girls Lego is a company that manufactured construction toys. Construction toys are variety of different pieces that allow making different models. (Tracy) Lego group is based in small town called Billund in Denmark. Because of Lego, Billund became second busiest airport in Denmark. And population doubles to above 6,500 each day during Lego business hours. (Leo) Lego started making toys in 1932 and in 1934 company came to be called “LEGO”. Lego is the number 1 brand in Europe and number 2 in the U.S. (Brad) Lego also became successful in technological field with video games and iPhone apps. (Joseph) However, Logo has serious competition in the market for construction toys. Logo has to strategies and develops with new ideas to beat the competition. Lego has compaction from brand name company Coco, Rasti, Tente, and Mega Brands. CoCo is Chinese toy company made same kind of toys that Logo produced and sell for low price. Logo sued the CoCo company for copyright. Over the years, Logo had more competition for gender differences in how kids play. Now, after research Lego will aim at girls 5 and up to stay in market and increased market value. January 1st Lego group lanced new toys in U.S market. USA always been big market for Lego since long time, Lego determined it was better to introduce the new toy after holidays. After holidays, Wal-Mart and Target would give more shelf because holydays rush is over. Lego group chief executive Jorgen...
Words: 658 - Pages: 3
...goLike Share 3.5k Madix madixinc.com Kitchenware retail fixtures for ideal store performance Call: +1 323 892 0530 Email: support@qessays.com Country: USA Qessays Research Papers Term Papers Book Reports Custom Essays Editing Services ORDER NOW Q e ssays Live C hat Contact Us LEGO strategic management case study Share Tw eet 1 0 Search... Username When his son Godtfred took over the business LEGO products continued to gain popularity as the company started to make new products to go with the current needs and demand. One of the features of a strategy is that the decision must be satisfy the expectations and value of the stakeholders such as customers. This is evident from LEGO which has input all its efforts in the growth of the company through innovation of new products. In 1990s when Godtfred’s son had taken over the leadership of the company and the company had gone global to seek foreign markets, many competitors began to emerge. Sony, Visual Arts and Nintendo started producing sophisticated electronic toys and gadgets. The company through its new CEO Kjeld set new strategic objectives to ensure that its global brand became known among the fast maturing children. The company also decided to build more Password Remember Me Login Forgot your password? Forgot your username? Create an account RELATED ARTICLES Write my term paper Essay About Teen Drugs and Abuse Benefits of Enabling Networking Caching Reaction Papers...
Words: 2630 - Pages: 11
...1) What are LEGOs “points of difference”? • History and leadership: Lego is the oldest company in the world that patented a similar play system. They have been in the toys industry for more than 80 years and they one of the largest toys manufactures in the world. This gives Lego visibility and positioning in the industry. • Play system: They have an open play system that is not limited to the toy that the customer buys. Their system has endless possibilities and depends on the imagination of the children. • Brand awareness: Lego has built a reputable brand that leverages their marketing and commercial efforts. The brand LEGO, although is associated with the toys industry, can be recognized beyond that industry and can be associated to other leisure and entertainment products. • Loyal customers: Lego has been able to build a loyal base of customers that keep loyal to the brand when their aging. • Strong corporate culture and core values that have been invariable for decades. 2) What has led the Lego Group to the edge of bankruptcy? Several reasons and factors led the Lego group to the edge of bankruptcy. They majority of them were during the “The growth period that wasn’t” and others during the “Fixing period that wasn’t”: • Birth rates in their markets declined. Lego products were primarily targeted to children and the demographic explosion in the previous decades had fueled the pipeline of sales of the organization. • Kids spent more and more time in extra curricula...
Words: 1007 - Pages: 5
...Case questions preparations and Hand-In Cases (LEGO) Christian GP A. LEGO 1. What were the biggest challenges facing Lego? Fundamentally, at this point (2004, per start of the case study), the challenges were myriad for LEGO; competition was on the increase, the toy industry was evolving in ways that did not favour the LEGO group and the company was on the verge of bankruptcy (limited cash, price pressures, high fixed costs, powerful retailers and new play platforms). Those two issues by themselves would have been cause enough for concern. However, the CEO also felt that the company had lost its way and had no clear idea of what it stood for (c.f. “who it was”) and what products it should offer. It was further clear to him, and to everyone, that changes were needed. In early 2004, they had formulated a new strategy (and presumably this was far from being tested and proven as a means to “turn the ship around”. That plan dealt with: (i) the financial situation (improving cash flow and eliminating debt etc) by selling off non-core assets, reducing operational complexity and outsourcing some manufacturing elements; (ii) Increasing profit margins, by revitalizing product lines, made harder by the need to cut costs. (iii) Grow organically; invent new ways of creating value. The first phase was accomplished by end 2005 but the second and third had yet to show fruit (or commence in some ways). The main challenge at that point was HOW to reinvent...
Words: 1390 - Pages: 6
