...HBS’s The Lego Group: Publish or Protect? Innovation and Intellectual Property Project 10.12.2014 Lego Group is the worlds’ fourth largest toy manufacturer. Their core product is a construction play design which allows for bricks to interlock together to design pre-designed or unique creations. In terms of volume and precision, the company relays on their core competence of “high volume precision molding” and has developed further strategies and technologies to ensure their growth and success in the area. The company is therefore faced with the difficulty in deciding how to protect this internal process and technology. Should this information be patented, kept as a trade secret, or published? This paper explores the options and proposes a possible solution for Lego Group, through careful research and analysis. Table of Contents 1 Introduction 2 Main Body 3. Conclusion 4 Bibliography Who is Lego Group? Lego Group was founded in 1932 by Ole Kirk Kritiansen in Billund, Denmark. In the beginning Lego Group made wooden toys and later (1946) changed their production to plastic interlinking building bricks after purchasing their first Plastic Moulding Machine. Lego group states that the “brick is their most important product” and although they have continued their almost 100 year expansion their core product remains to be their brick. In 1958 their “stud-and tube” coupling system was...
Words: 2511 - Pages: 11
...Lego Case Study -Avinash Mavireddi 1. After Knudstorp has taken the control of Lego, the first thing he stressed on was the Supply Chain Management. Earlier, the components produced by Lego were primarily used for only one pattern or model. So the prototype designers were asked to use the same blocks for more than one design. This was the first step taken by Knudstorp that resulted in reducing the production of Lego components to almost half of what they were producing before. It also helped in reducing the expenses on the components mold significantly. The new approach has generalized the Lego components and this gave children an unlimited ability to think and create different models and design beyond what they can imagine. On the whole it even widened the range of products that Lego had. Another strategy that Lego employed was to induce the themes of films that were a huge success like Indian Jones and Star Wars. They didn’t stop at this and started to carefully maneuver into the Video games which featured animated Lego cast. All this growth in the company created a pressure on the Information Systems. Order management and fulfillment were the two sectors that were impacted severely and in turn it resulted in missing the customer demands. To overcome this situation, Employee management systems were widened by adding new employees to the stability and growth at many new locations. Product design and development were the other two modules which needs to be concentrated now...
Words: 1489 - Pages: 6
...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...
Words: 541 - Pages: 3
...Case Studies Lego The Danish company Lego is one of the most famous brands in the world when it comes to children’s toys and has grown since it was founded in 1932 into a global business. Its origins lie with Ole Kirk Christiansen, a carpenter from Billund (where the firm is still based) who bought a woodworking business in 1916 and made furniture for local farmers. For various reasons he shifted his production range in the 1930s to make children’s toys and in 1934 named the company ‘Lego’ from the Danish words leg and godt, meaning ‘play well’. His early products - wooden pull toys, piggy banks, cars and trucks – were reasonably successful but a key turning point for the business came in the 1940s when they began making plastic toys including a truck which could be taken apart and re-assembled. In 1949 Lego began producing a set of interlocking bricks (based on an original patent by the UK Kiddicraft company for which they bought the rights) made from cellulose acetate and using an early version of a hollow design with holes and studs. The now familiar Lego bricks appeared on the market in 1953 but were not initially very successful, partly due to poor perceptions amongst consumers and retailers of plastic toys. The key was probably the emergence of the idea of a building system based on interlocking bricks – an idea which took some time to develop and is closely linked to the son of the founder, Godtfred Kirk Christiansen. His discussions with buyers, especially in the USA...
Words: 2908 - Pages: 12
...construction plans in its film-franchised LEGO sets was the right strategy or not, it’s important to start with what the company itself stands for. The name LEGO means “play well”—the focus of the toy manufacturer being “play.” The perennial toy maker has a brand that stands for “self-expression,” and “sponteneity,” and “innovation.” That is, the core of LEGO is not jus that it’s a toy, but that it encourages children to be imaginative and creative with it’s simple interlocking bricks—a child can build anything that he or she can dream up with LEGO products. In fact, LEGO itself recognizes that two of its sources of competitive advantage are creativity and innovation. These are the decisive points for LEGO. They are what make LEGO, LEGO. Creativity and innovation are the product’s differentiators. They are the source of the company’s competitive advantage and, therefore, a key element in the company’s strategy. These differentiators are what propelled LEGO to a peak 85% market share of the construction-toy market. While licensing film francises into its merchandise wasn’t the wrong strategy, including detailed construction plans with those LEGO sets was the wrong strategy. By including detailed construction plans with its products, the company is sending cues to its customers that its products are not designed for creative, innovative play. Instead, construction plans are prescriptive step-by-step instructions—a dichotomous concept to the one that LEGO stands for where it wants to encourage...
Words: 766 - Pages: 4
...Tim Chou Spring 2014 Fact Paper LEGO “It’s not a franchise, it’s a highly sophisticated interlocking brick system,” says Will Ferrell to his adolescent son in the recently released mega blockbuster hit The LEGO Movie. Yellow, vibrant, educational, and fun, LEGO’s have been around for generations. Created by Danish carpenter Ole Kirk Kristiansen in 1932, and derived from the Danish words “Leg Godt” which means “play well”, LEGO’s have made a remarkable recovery from almost being bankrupt in the early 2000s, to the very much alive and thriving business it is now. Jorgen Vig Knudstorp, who came to be the LEGO CEO in 2004, helped them become the most profitable and fastest growing company in the toy industry besides Mattel. Their products are developed with the upmost care; as stated in their motto: “Kun det bedste er godt nok” which means 'only the best is good enough', and is marketed at children but bought and collected and loved by adult fans as well. LEGO’s have not only stood and passed the test of time, it is also a “psychological tool and a way to relax”, quoted by leading psychologist Jon Sutton, and proven to help children’s play, creativity, and imagination. In the Lego Movie, Emmet Brickowski (The LEGO Movie’s protagonist) uses creativity and intelligent management to save his city of Bricksburg. Coincidentally, the same went for Knudstorp who saved the LEGO Company from almost certain bankruptcy. In the 1990s, LEGO was facing bankruptcy due to a few major...
Words: 1079 - Pages: 5
...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
... | Part A: Short Answers 1. Explain the factors that may influence the organisation in adopting RM. 2. Suggest for a company with which you are familiar. Where would you place the company on the hypothetical RM/TM continuum? What factors led to your decision to place them at this point on the continuum? 3. What are the differences between Relationship Marketing and Transactional Marketing? 4. What effect do switching costs have on a relationship? 5. Explain the association between risk, salience and emotion. Part B: Case Study Lego is one of the world’s largest toy manufacturers. It is estimated that more than 400 million children and adults play with Lego each year. However, despite being voted the nation’s favourite toy for a number of successive years and a YouGov pool into the top ten favourite toys of the past century showing Lego as the clear winner (ahead of computer games, teddy bears, Meccano and train sets!) Lego is in serious financial difficulty! With an annual revenue of over £1 billion and employing around 8000 people in North and South America, Asia and Europe, the company has posted a loss for a number of consecutive years. After attempting unsuccessfully to redress its losses with new products such as computer games, the company is attempting to restructure so as to focus on its core values. As Frank Martin, of Hornby toys states, “Children are still interested in Playing. Blaming the TV or...
Words: 607 - Pages: 3
...5. Summarize the strategic risks using the Strategic Risk Management framework and map the risks on the LEGO PAPA model. The LEGO Group uses a four step Strategic Risk Management model which is comprised of Enterprise Risk Management, Monte Carlo Simulations, Active Risk and Opportunity Planning, and Preparing for Uncertainty. Using the Strategic Risk Management Framework, there are many different risks on the pyramid that the LEGO Group are open to. They are shaded and explained below. Customer Risk—LEGO’s products are geared to younger children. It needs to fulfill otherwise unmet customer needs in the Asian market to make a presence and gain market share in that market. “Market research firms noted a strong preference for preschool and educational toys in most emerging Asian economies. For example, Chinese sales of scientific/educational toys and construction toys had grown 20% between 2009 and 2010.” The LEGO Group has a plethora of construction toys and it prides itself on its ability to use consumer insight in product development. “Anyone can get consumer insight, but many people have a hard time dissecting this information and utilizing it in their product development.”1 We believe LEGO should proceed with caution and do more research because their own focus groups with Chinese mothers contradicts the preference above. “The post-eighties mums grew up in this hard school paradigm. They don’t want to offer their kids that same experience. These parents want...
Words: 1157 - Pages: 5
...physical toys. Children are playing computer games at a younger age, eroding the share of their playtime that was once dominated by toys. 1.2.2 Demographics In developed countries, aging population coupled with lowering birth rates are the primary driving forces for industry players going forward. I believe that this should provide implications on the future directions that LEGO should take. 1.2 External Environment – SWOT Analysis 1.3.3 Strengths and Opportunities The LEGO brand itself is entrenched deeply within the building toys industry. This strength is especially valuable to certain sub-industries under the broader toys industry such as infants’ toys and serious gaming. LEGO is also a trusted brand in education and with parents. LEGO can leverage on this strong brand name to perhaps explore opportunities in non-traditional markets such as the silver industry. LEGO, being an established brand that the older generations are familiar with, can expand into these industries. In addition, the trend towards more playtimes spent on computer games opens up the digital market for LEGO as well. The culture of innovation and LEGO’s unique product offering – providing building blocks for players to create and invent is a valuable and complex strength embedded in its organizational culture that can be used to reliably gain a foothold in the digital games market. 1.3.4 Weaknesses and Threats The consolidation of licenses under Disney, coupled with LEGO’s...
Words: 1550 - Pages: 7
...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
...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
...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
...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 Writing Tips Dissertation Writing OUR ADVANTAGES LEGOLAND parks in various countries to boost its sales by 100%. However, things continued to worsen and Kjeld as the top manager took the initiative and the responsibility to change the company back to its track in the stiff ...
Words: 2630 - Pages: 11
...the company entire loss history and regained its fame over the time. When Lego was a startup company it was in profits, it Gradually failed to turnout its customers, by implementing his strategic plan, credibly he manufactured almost 90% of products with same components and built the products to attract the customers. It was Successful and it gradually gave a rise in using of the Lego toys all over again. Designers were made to reuse the components in the new products. In this way he cut-shorted the number of products from 13,000 to 7,000. This reduction saved a significant amount to the company. He followed an expression which says “managing at eye level,” meaning his ability to talk to people on the factory floors, to engineers, marketers at home. He emphasized the importance of performance. Knudstorp followed a principle that everyone need to build a mind-set where non-performance is not accepted because there is no place to hide if performance is poor. Lego has introduced computer games with building blocks characters with playing heroes and villains. He introduced theme based building of games. The core theme of Knustorp’s plan is “nourishing a child”. 2. Which of the generic strategies does Lego appear to be using based on this case? Provide support for your choice. Lego was formulated with mainly three business strategies organizational, business and information systems strategy. The Line of Lego mainly...
Words: 1070 - Pages: 5
