CASE STUDY

LEGO
A Danish Toy company
Founded in 1932 by a Danis, Ole Kirk
Christiansen. Derived its name from two
danish words “Let” and “godt” meaning play
well.
 LEGO KEY
1 TURNING POINT

Market innovations – adding wheels, figures, targeting and segmenting different markets, switching from
cellulose acetate to acrylonitrile butadiene styrene (ABS) plastic, adding instruction manuals, etc. – helped
fuel development.

Early products Turning Point- Worldwide Popularity

Wooden pull toys, wooden
ducks, piggy banks, cars
and trucks were some of
the first toy products of
Lego.
1940s
Growth continued throughout the
Lego began later years of the 20th century with
Lego becoming one of
making plastic toys the top ten toymakers worldwide,
including a truck which and with a wide range of products
could be taken apart and standing on their basic
re-assembled. platform.
 ADVANTAGES FOR THE COMPANY
1. Famous brand name- The public was reluctant to accept them at first
, preferring more traditional wooden toys than plastic (then a new
material). However, the LEGO bricks gained in popularity and the ba
sic bricks were supplemented with figures and technical features, s
uch as small electronic engines, which extended the playing opportu
nities.
2. Focus on the brand and brick quality- Over the years, the LEGO Grou
p has focused on brand building and product quality to compensate f
or the expiration of patents. At the core of this strategy has been
an accumulated knowledge about plastics and production technologies
. The results are superior gripping power of the bricks and leaders
hip in non-poisonous plastics which imitators have not yet been abl
e to achieve.
1 D i ff i c u l t i e s

Competitions
COMPETITION By the late 1990s the company had begun to run
into difficulties. In their main product area low cost
‘good enough’ quality competition was making
inroads into their market.
Rise in expenses lead to the circumstances that
saw the company increasingly losing money and
market share and the crisis peaked around 2003
Enter title Enter title with a reported loss of $240m and fears that the
giant Mattel company would take over Lego.

JOB SUMMARY REVIEW

1 RISE

CHANGE OVER TIME

PAST PRESENT
An early product was called Lego Mosaic, originally launched MAIN PROBLEM: MAIN PROBLEM:
in 2000, which allowed INTERNAL EXTERNAL THREATS
users to upload photographs to the company’s website. Lego WEAKNESS 1. Strong, growing
would digitize the picture and 1. Costly business competition
calculate the bricks required to make a wall-hanging mosaic 2. Inefficient 2. License market
with multiple colours. Productions, 3. Trademark protection
Mosaic provided an early learning experience which has fed distribution, sales loss.
through to an increasing variety
of user configurable products in which users can modify or
even design from scratch their own toys

JOB SUMMARY REVIEW

 LEGO AT PRESENT
• It Adapted the technological advances by using it to promote
the company's product.
• Lego Company has high quality and innovative products that
are used by children of all ages today and has been competit
ive until this day.
• Also, the problem of the company is the technological produ
ct or gadgets. But despite of the countless threats and other
competitors, the Lego Company still stands as a successful an
d highly profitable company throughout its business years.
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