Lego

1st CASE STUDYWinter term 2012/2013Student: Aitor Martin SantanaProfessor: Ravinder Kaur-LahrmannSubject: Management Tools |
THE LEGO GROUP

1. In this case I have identified some keycharacteristics that are in relation with the strategy that LEGO has been following.
In the 1970-1980 decades, environment was hostile. There was a huge oil crisis, and there were too much difficulties.However, LEGO maintained its philosophy, and their image of unique and iconic brand. Competence was also hard, with Mattel and Hasbro in the market, but LEGO sustained its powerful position.
If we focus,for example, in the strategy that they carried out between 1995 and 1998, an interesting fact is that their objectives (become the best known global brand, increase the sales, etc.) are set in a longterm direction.
Another important point is that they wanted to expand the scope of their activities. They entered in new areas such as films, games… and they also built new LEGOLAND parks.
However,the turnaround attempts that happened between 1999 and 2003 forced this company to check their strategy. Different factors such as the changing environment, lead times… affected negatively LEGO`sstrategy. This shows that the uncertainty of strategic decisions is also decisive.
If we look at the exploring strategy model, we can see that the strategic decisions have affected the three mainelements (position, choices and action). Regarding to the strategic choices for example, we can mention the corporate-level and the business level strategies. I think that LEGO took some correct decisions,such as changing their relationship with retailers, renewing their supply chain…
2. There are many external features that have more or less influenced LEGO`s strategy development. One of this factorshas been the competitor`s influence. Due to the high competitiveness in the toy market, LEGO has to make a big effort in strategy in order to be one of the leaders of this industry.
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