Question 1: What are the companys strategies?

The bricks and the system

Care for education and incorporate within combines unique, inspiring qualities of

LEGO bricks with STEM subject. Develop product series according to the age

categories.
Quality masters of the mold
Only the best is good enough the founders legacy. To achieve that LEGO

had become masters of the mold, a core competency, an important

component in the basic skill set. The bricks as the Legos trademark

product, Lego provide the best quality in the bricks.

Logistic the right product in the right place at the right time
Logistics would demand the co-ordination of operations involving

warehouses in Mexico and USA with manufacturing operations in

Denmark, Hungary, Czech republic, China and USA in order to make the

product arrived on time in the market.

Question 2: Analyze Legos internal performance using TOWS and financial

performance.

Strenghts (S) Weaknesses (W)

Famous brand name Brand perception as

Existing customer blocks toys

base High pricing

Existing distribution Higher

network diversification
Opportunities (O) SO Strategies WO Strategies

New emerging ATTACKING STRATEGY BUILD STNEGTHS for

markets ATTACKING STRATEGY

Cross-selling

opportunities

Alliances- co
branding

New products
Threats (T) ST Strategies WT Strategies

New Entrants DEFENSIVE STRATEGY BUILD STENGTHS for

DEFENSIVE STRATEGY
Digitally advanced

and competitive

products

Changing customer

choices

Strength-Opportunity (SO) Strategy is leveraging the strengths for maximizing the

opportunities. Known as maxi-maxi strategy.

Lego use its strengths as a famous toy producer with a lot of costumer data to expand its

market.
Weakness-Opportunity (WO) Strategy is counter the weaknesses by maximizing

its opportunities. Known as mini-maxi strategy.

Lego counter its weaknesses in a high price and brand perception as toy block only with the

opportunities in new products such as games and films.

Strength-Threat (ST) Strategy is leverage the strengths for minimizing the

threats. Known as maxi mini strategy

Lego use its strengths as famous brand name, existing customer base,

existing distribution network to defend its threats as a new comer.

Weakness-Threat (WT) Strategy is counter its weaknesses with threats.

Known as mini mini strategy.

This strategy is the last option in TOWS strategy.

Financial Performance

Ovesen as the new Financial Director quickly completed the financial

analysis and began to develop financial targets, particularly for line profitability.

Targets of full manufacturing cost ratios (FMCs) and ROS return on sales targets

were set. The company introduced a 13.5% return on sales target for all products
within the LEGO portfolio. Analysis of capital allocation and measurement of

return on capital performance would place the LEGOLAND parks under scrutiny

leading to disposal in 2004.

As we can see that from 2004-2009 Lego profit is increasing while after that its start

to decreasing.

Last year the LEGO Group today released its financial results for 2016, reporting the

highest revenue in the companys 85-year history.

2016 highlights:

Revenue for the full year increased by 6.0 percent in DKK to DKK 37.9 billion

compared with DKK 35.8 billion for 2015.

Revenue for the full year increased 5.5 percent compared with 2015, excluding the

impact of foreign currency exchange.

Operating profit (profit before financial items and tax) for 2016 was DKK 12.4 billion

compared with DKK 12.2 billion for 2015, an increase of 1.7 percent year on year.

Net profit for the full year was DKK 9.4 billion compared with DKK 9.2 billion in

2015.
 Cash flow from operating activities for the year was DKK 9.1 billion compared with

DKK 10.6 billion in 2015.

Tax on profit for the year amounts to DKK 3.0 billion, unchanged from 2015.

Significant investments were made in building capacity and capability to deliver the

groups long-term growth ambition.

This result shows that Lego performance start to get better by Revenue growth was driven

by performance of core themes including LEGO City, LEGO NINJAGO, LEGO Friends,

LEGO Technic, and LEGO Creator. During 2016, more than 335 new items were launched,

including LEGO NEXO KNIGHTS, an innovative platform that combines digital and

physical play. Innovation is critical to Lego success and each year around 60 percent of its

portfolio is new products. Lego is constantly challenging ourselves to engage and inspire

children with the most relevant, exciting and fun play experiences. This year Lego have

strengthened our efforts around digital engagement, and found new ways to connect with

children online and through a range of digital platforms.