CASE 1 Presentation: “Lego: The fall and rise”

MK-210 Principles of Marketing (Section-A) Program: BBA
Marks: 5
-------------------------------------------------

There is one company that has made more than 400 billion bricks (62+ for every individual on this planet). It may also be called world’s largest tire manufacturer though in this case ‘bricks’ and ‘tires’ are of blocks made by Lego. This Danish company was registered in 1958 though it had been manufacturing blocks since 1932. It has twice been named Toy of the Century, by Fortune magazine and the British Association of Toys.
Lego employees about 10,000 people, is spread in over 130 countries and is world’s fourth largest manufacturer of toys in terms of revenue after Mattel ($5.8bn), Namco Bandai Holdings ($4.5bn) and Hasbro ($4bn).
Losses epoch (1998-2004)
In 1990s the videogaming era boosted and in 1995 the internet came eventually taking away the share of children’s time from toys. As some analysts said that videogames in particularly were the prime reason for Lego’s eroding sales to the point that in 1998 it suffered losses for the first time in its history, however, it was not for the last time.
Its losses reached the highest figure of 1,800 mDKK (million Danish Krone) in 2004 that was when hopes of its survival appeared low as the then newly appointed CEO Knudstorp said that hundreds of our customers wrote to us “Please don’t die”. He was then the major force in bringing the company back on its tracks and as can be seen in table Lego is far away from losses with its current sales. | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | Revenue | 7,680 | 9,808 | 9,467 | 10,670 | 11,426 | 6,770 | 6,295 | 7,027 | 7,798 | 8,027 | 9,526 | 11,661 | 16,014 | Net profit / (loss) | (194) | 273 | (916) | 433 | 428 |