...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
...LEGO as we know it today first came into being in 1949 when Godtfred Kirk Christiansen used a “new” material – plastic – to create simple four and eight stud building blocks. Today, LEGO has turned into one of the most famous toy brands in the world. The aim of this case study essay is to asses the macro and micro environment in which LEGO is performing today. Micro Marketing Environment The micro marketing environment is defined as “the forces close to the company that affect its ability to serve its customers – the company, market channel, firms, customer markets, competitors and publics, which combine to make the firm’s value delivery system” (Kotler, Wong, Saunders and Armstrong, 2005) One of the most notable things concerning the micro environment of LEGO is that it is viewed as a strong brand. It been part of the toy market for so long, that grandparents and parents can remember playing with the toy as a child, and so often feel they have a relationship or bond with the product. The brand has also infiltrated many markets world-wide, and its fame is instrumental in its continued success. The case study states, it’s the only European company to enter the worlds Top Ten toy manufacturers. The product also has a unique selling point. The toy of LEGO is aiming to capture a creative imagination and also enable it to stand out in the market of dolls, cars, computer games etc. It is promoted as a “system of play”, which can be a strong selling point when trying to compete...
Words: 2439 - Pages: 10
...Sommaire Synthèse managériale I) Analyse de la situation concurrentielle de LEGO sur le marché des jeux et jouets 1) Description des marchés et analyse de la concurrence 2) SWOT : Diagnostic externe 3) SWOT : Diagnostic interne SYNTHÈSE MANAGÉRIALE LEGO est une entreprise danoise réputée dans le monde entier pour sa fabrication de jeux qui consistent en l'assemblage élémentaire de briques en plastique. L'entreprise est née en 1932 à l'initiative de la famille Christiansen. Dès sa création, la société a opté pour la conception de jouets contribuant au développement et à l'apprentissage de l'enfant. Sa politique repose sur trois valeurs clés: créativité, imaginaire et appartenance. En outre, l'entreprise privilégie fortement la recherche comme en témoigne son étroite collaboration avec le « Massachussetts Institute of Technology ». LEGO a connu une forte ascension jusqu’à devenir l’un des premiers fabricants de jouets. Mais à partir de 2000 LEGO commence à afficher des pertes records (250 millions USD en 2003). La diversification du groupe hors de son métier de base, la brique, a fait perdre à LEGO ses consommateurs traditionnels. Sur le marché français, LEGO a également subi des pertes conséquentes passant d'un résultat net de 16 millions d'euros en 2002 à 6 millions d'euros en 2005. LEGO France fait face à une forte concurrence au sein du marché des jeux et jouets, d'une part la concurrence des autres industriels français du jouet, à savoir les filiales...
Words: 1945 - Pages: 8
...S |Subject Name |Relationship Marketing | |Week |2 (Tutorial Questions) | |Topic |The Nature and Characteristics of Relationship Marketing | 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...
Words: 607 - Pages: 3
...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
...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
...and be. When going to any type of toy store, people can clearly see difference between the toys for girls and the toys for boys. Even the simplest of toys are separated by gender just because of the color scheme that it holds. Legos are simple toy blocks, but they have two separate sets, one for girls and one for boys. The appearance of the toy, the activities of each set, and the packaging of the toy reinforces stereotypes and the connotative meaning of boys and girls. One difference between the girl and boy Legos are their packaging. The packaging of the girl and boy Lego sets are almost completely different. The boy packaging has dark colors, such as blues, blacks, greens, yellows and reds. Some of the boy packaging also has just boys playing with the Legos on the front of it. When it comes to the boys’ Legos none of the colors are bright and colorful, but the girls’ Legos...
Words: 812 - Pages: 4
...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
...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...
Words: 4389 - Pages: 18
...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
...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
...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 aimed at girls. The fact behind this...
Words: 1070 - Pages: 5
...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
... Tsinghua Univerity 1. 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 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 affected by toy trends • Take calculated risk to ride on the trends...
Words: 573 - Pages: 3
...1. Introduction LEGO is a combination of the Danish words “leg” and “godt”, meaning “play well”. As their name and ideal, Lego has been beloved by the children as well as the parents for decades. Not only as plastic toy bricks, but also effective educational tools, the LEGO Company enjoyed continuous growth and broaden the global brand value. The LEGO brand moved to third place in 2002/2003 with only Coca-cola and Kellogg having greater respect among families with children. Even though as the overall toy market faces challenges, LEGO’s revenue and profits are increasing rapidly, especially since 2005. This profitability didn’t change even in the current recession in the global market. The LEGO Group achieved record-breaking profits in 2011 that secured the health of the company. Interestingly, not far from this climb, the LEGO Group had a deep retreat in the late 1990s and the beginning of the 2000s. Major strategic efforts such as theme parks, Clikits craft sets (marketed to girls), Galidor (an action figure) couldn’t respond to management teams’ goal, and brought failure. As a result the LEGO group created bad financial results: their profit margin was -2.5 and Return on equity was -3.5 in 1998. What intrigues me, as one of thousands of enthusiastic users of its products, is a simple curiosity about what kind of sustainable efforts could enable the LEGO to survive from the turbulent recession and gain even better market share. In order to observe the effective management...
Words: 3172 - Pages: 13
