Essay on The Lego Group Case - 3410 Words

Introduction Founded in 1932, the LEGO Group is a privately held company headquartered in Billund, Denmark. The vision of Lego Group is to â€Å"inspire children to explore and challenge their own creative potential†[1] Lego now ranks 4th in the world as a toy manufacturer. The Lego Group employs nearly 9,000 workers and its own product, Lego Brick can be found in over 130 countries. The financial performance of Lego declined drastically through the 1990’s and early 2000’s. In 2004, the company accumulated losses of DKK1.9 billion.[2] Therefore, Lego tried to implement some changes in order to cut the production cost and reverse the poor situation. In the last step of the process of restructuring Lego’s supply chain, the Group tried to close†¦show more content†¦While the family was moving towards a more international business, the company also upheld the belief of its traditional business pattern while continuing to increase market share and growth by focusin g on new product development. It wasn’t until 2004 when LEGO faced the largest deficit yet that an outsider was appointed as the CEO. Jorgen Vig Knudstorn suggested to drop the arrogance and listen to the customers. He attempted to fix the ineffective and inflexible supply chain traditionally used by LEGO. Knudstrom was more willing to try something new and adopt and establish a new value for the group. LEGO’s Competitor’s LEGO maintains the leading position on the market for construction toys in the world. United States is the largest market for the products while Mega Bloks is the second player[1]. LEGO has an advantage over new competitors considering the costs required for advertising and the costs for promoting a name in the market that can reach the LEGO brand recognition. As of 2004 the LEGO Group was the fourth-largest toy manufacturer in the world. A few years ago, the LEGO Brick was acclaimed â€Å"Toy of the Century† by Fortune Magazine and the British Association of Toy Retailers[2]. In fact, the arrival of competitors in the market for construction toys has done little to damage the sales of the LEGO Group. LEGO is competing with companies producing interlocking plastic building bricks. The number of companies in the market is relatively small, however,Show MoreRelatedThe Lego Group: an Outsourcing Journey Case Analysis2789 Words   |  12 PagesThe LEGO Group: | An Outsourcing Journey | | | 8/2/2012 | Introduction 2004 began an especially difficult period for The LEGO Group, which entered into a financial crisis resulting in a deficit of 1.8 billion DKK ($294.9MM USD). The internal turmoil lasted through 2009 as the leading toy manufacturer, famous for the signature LEGO brick, nearly went bankrupt. This experience was a first-hand lesson in the negative effects of not having a stable and organized supply chain design.    Read MoreThe Lego Group: Building Strategy Case 10 Essay1738 Words   |  7 Pages The Lego Group: Building Strategy, Case 10 Overview LEGO, the brand of toy that has been played with by multiple generations of people was founded during the Great Depression in 1932 by Ole Kirk Kristiansen, a Danish carpenter. Kristiansen started making toys out of wood and had 12 employees under him. The word LEGO combines two Danish words leg and godt, which mean â€Å"play well† and in Latin, fittingly means â€Å"to put together†. 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Then, with the development of social media Lego appeared to hit a brick wall when faced with the challenge of how to market their Lego Bricks on the social web. Then, Jack Mckee, at former social media practioner at Lego, â€Å"was able to help change the culture within the organization, so they could use the social web to buildRead MoreThe Lego Group1284 Words   |  6 Pages20101233 20054057 Assignment Title : The LEGO Group: working with strategy. Date : 03 March 2012 Programme : BTECH-MANAGEMENT IV Question 1 Explain how the development of strategy at the LEGO Group reflect the key characteristics of strategic management outlined in section 1.2 and in the model in Figure 1.4? â€Å"Strategy is the long-term direction of an organization† (Johnson, Whittington and Scholes, 2011, p.3). The LEGO Group started with the manufacture of stepladders, ironingRead MoreCase Analysis Lego A The Crisis1161 Words   |  5 Pagesï » ¿1. From early 1990s to 2004, the Lego Group, a long successful toymaker with a world-renowned brand, fell into the edge of bankruptcy. Compared with the highest revenue in 1999, the revenue in 2014 decreased by 35.6% while the net profit was negative, seven times less than that in 1999, the lowest in the past ten years. Its net profit margin and ROE were also the lowest. The gross margin and inventory turnover were all lower than its competitors. The strategic moves in the two main periods â€Å"growth