{"id":1760,"date":"2017-10-08T09:54:22","date_gmt":"2017-10-07T22:54:22","guid":{"rendered":"http:\/\/casestudyhelp.com\/sample-questions\/?p=1760"},"modified":"2018-01-19T18:29:33","modified_gmt":"2018-01-19T07:29:33","slug":"case-study-on-the-lego-group-building-strategy","status":"publish","type":"post","link":"https:\/\/casestudyhelp.com\/sample-questions\/case-study-on-the-lego-group-building-strategy\/","title":{"rendered":"Case Study on The Lego Group: Building Strategy"},"content":{"rendered":"

Case Study Assignment<\/a> on<\/strong> – The Lego Group: Building Strategy<\/p>\n

Question\u00a0<\/em>Description ::<\/h5>\n
A) Draw a competency tree for Lego.<\/em><\/h5>\n
B) What is their core competency?<\/em><\/h5>\n
C) Does it pass the tests? <\/em><\/h5>\n
D) Are their markets – they are currently not in, that it could be applied?<\/em><\/h5>\n

Attached is the case.<\/p>\n

\n

On\u00a0 February\u00a0 15,\u00a0 2011<\/strong>,\u00a0 world-famous\u00a0 toy\u00a0 maker\u00a0 the\u00a0 LEGO\u00a0 Group\u00a0 (LEGO)\u00a0 assembled\u00a0 an\u00a0 internal<\/p>\n

management team to create a strategic report on LEGO\u2019s different product lines and business operations.<\/p>\n

Over the past two years, numerous threats had emerged against LEGO in the toy industry: the acquisition of\u00a0 Marvel\u00a0 Entertainment\u00a0 by\u00a0 The\u00a0 Walt\u00a0 Disney\u00a0 Company\u00a0 created\u00a0 major\u00a0 implications\u00a0 for\u00a0 valuable\u00a0 toy\u00a0 license agreements; LEGO had lost a long legal battle with major competitor MEGA Brands \u2014 maker of MEGA\u00a0 Bloks\u00a0 \u2014\u00a0 with\u00a0 a\u00a0 European\u00a0 Union\u00a0 court\u00a0 decision\u00a0 that\u00a0 removed\u00a0 the\u00a0 LEGO\u00a0 brick\u00a0 trademark;\u00a0 new\u00a0 competition\u00a0 was\u00a0 preparing\u00a0 to\u00a0 enter\u00a0 the\u00a0 marketplace\u00a0 from\u00a0 Hasbro\u00a0 \u2014\u00a0 the\u00a0 second-largest\u00a0 toy\u00a0 maker\u00a0 in\u00a0 the\u00a0 world\u00a0 \u2014\u00a0 with\u00a0 the\u00a0 company\u00a0 launching \u00a0a\u00a0 new\u00a0 rival\u00a0 product\u00a0 line\u00a0 called\u00a0 Kre-O.\u00a0 It\u00a0 was\u00a0 critical\u00a0 for\u00a0 the\u00a0 management team to identify where to expand LEGO\u2019s product lines and business operations in order to develop\u00a0 a\u00a0 competitive\u00a0 strategy\u00a0 to\u00a0 continue\u00a0 the\u00a0 organization\u2019s\u00a0 financial\u00a0 success\u00a0 and\u00a0 dominance\u00a0 in\u00a0 the\u00a0 building toy market.<\/p>\n

 <\/p>\n

COMPANY HISTORY<\/p>\n

1<\/p>\n

LEGO first began during the Great Depression in 1932, when Danish carpenter Ole Kirk Kristiansen and<\/p>\n

his sons started making wooden toys after the demand for building houses and furniture declined. Some<\/p>\n

of\u00a0 the\u00a0 first\u00a0 toys\u00a0 they\u00a0 made\u00a0 included\u00a0 yo-yos,\u00a0 wooden\u00a0 blocks,\u00a0 pull-along\u00a0 animals\u00a0 and\u00a0 wooden\u00a0 vehicles.\u00a0 Kristiansen believed that \u201conly the best is good enough\u201d in manufacturing children\u2019s toys; this motto was so important to him that it was carved on a sign and hung on the workshop wall to serve as a reminder to always produce top-quality products. He used the highest quality materials and workmanship to produce toys\u00a0 that\u00a0 were\u00a0 designed\u00a0 to\u00a0 last\u00a0 through\u00a0 years\u00a0 of\u00a0 play.\u00a0 In\u00a0 1934,\u00a0 the\u00a0 company\u00a0 name\u00a0 LEGO\u00a0 was\u00a0 created\u00a0 when Kristiansen held a friendly competition among th<\/p>\n

e workshop employees to help name the company, with\u00a0 a\u00a0 bottle\u00a0 of\u00a0 wine\u00a0 as\u00a0 the\u00a0 prize.\u00a0 Kristiansen\u00a0 won\u00a0 the\u00a0 competition\u00a0 himself\u00a0 by\u00a0 creatively\u00a0 combining\u00a0 the first two letters of the Danish words leg and godt, meaning \u201cplay well,\u201d to form the name LEGO, which also meant \u201cI put together\u201d in Latin. In 1942, disaster hit the small company of only 12 employees as the entire\u00a0\u00a0 workshop\u00a0\u00a0 burned\u00a0\u00a0 to\u00a0\u00a0 the\u00a0\u00a0 ground.\u00a0\u00a0 Not\u00a0\u00a0 willing\u00a0\u00a0 to\u00a0\u00a0 quit,\u00a0\u00a0 Kristiansen\u00a0\u00a0 rebuilt\u00a0\u00a0 the\u00a0\u00a0 factory\u00a0\u00a0 and\u00a0\u00a0 painstakingly remade all of the lost designs from memory in order to kee the company going.<\/p>\n

Following the end of World War II, LEGO became the first company in Denmark to purchase a plastic-injection\u00a0 molding\u00a0 machine\u00a0 in\u00a0 1947;\u00a0 however,\u00a0 the\u00a0 new\u00a0 machine\u00a0 came\u00a0 at\u00a0 a\u00a0 high\u00a0 cost,\u00a0 requiring\u00a0 the\u00a0 company\u00a0 to\u00a0 risk\u00a0 a\u00a0 large\u00a0 portion\u00a0 of\u00a0 revenues\u00a0 and\u00a0 face\u00a0 the\u00a0 additional\u00a0 financial\u00a0 risk\u00a0 of\u00a0 plastic\u00a0 toys\u00a0 being\u00a0 expensive\u00a0 to\u00a0 manufacture.\u00a0 With\u00a0 the\u00a0 acquisition\u00a0 of\u00a0 the\u00a0 new\u00a0 machine,\u00a0 one\u00a0 of\u00a0 the\u00a0 first\u00a0 plastic\u00a0 toys\u00a0 to\u00a0 be\u00a0 created by LEGO was a baby rattle that was shaped like a fish. It did not take long before the investment in the machine proved to be a success, as LEGO quickly expanded its business operations to produce over 200\u00a0 varieties\u00a0 of\u00a0 plastic\u00a0 and\u00a0 wooden\u00a0 toys.\u00a0 Using\u00a0 the\u00a0 new\u00a0 technology,\u00a0 the\u00a0 first\u00a0 plastic\u00a0 LEGO\u00a0 bricks\u00a0 \u2014\u00a0 named\u00a0 Automatic\u00a0 Binding\u00a0 Bricks\u00a0 \u2014\u00a0 were\u00a0 created\u00a0 and\u00a0 sold\u00a0 in\u00a0 sets\u00a0 in\u00a0 1949;\u00a0 however,\u00a0 this\u00a0 name\u00a0 did\u00a0 not\u00a0 last long as it was changed to LEGO Bricks in 1953, with the addition of the LEGO name being molded onto every brick manufactured.<\/p>\n<\/div>\n

\n
Godtfred\u00a0 Kirk\u00a0 Christiansen,\u00a0 one\u00a0 of\u00a0 Kristiansen\u2019s\u00a0 sons,\u00a0 had\u00a0 grown\u00a0 up\u00a0 with\u00a0 the\u00a0 family\u00a0 company\u00a0 and\u00a0 eventually\u00a0 became\u00a0 the\u00a0 junior\u00a0 managing\u00a0 director\u00a0 of\u00a0 LEGO.\u00a0 Upon\u00a0 returning\u00a0 from\u00a0 a\u00a0 toy\u00a0 fair\u00a0 in\u00a0 1954,\u00a0 Godtfred and a co-worker had a conversation during which they realized that no system existed to connect different products or items in the toy industry. To Godtfred this represented a key opportunity to design a new structured system of toy products, selecting the LEGO brick as the best company product with which to create what he referred to as the \u201cLEGO System of Play.\u201d The idea behind the LEGO System of Play was\u00a0 that\u00a0 each\u00a0 and\u00a0 every\u00a0 LEGO\u00a0 brick\u00a0 should\u00a0 connect\u00a0 to\u00a0 each\u00a0 other\u00a0 \u2014\u00a0 not\u00a0 just\u00a0 within\u00a0 one\u00a0 set\u00a0 but\u00a0 across\u00a0 multiple\u00a0 sets.\u00a0 A\u00a0 \u2018Town\u00a0 Plan\u2019\u00a0 series\u00a0 with\u00a0 28\u00a0 building\u00a0 sets\u00a0 and\u00a0 eight\u00a0 vehicle\u00a0 sets\u00a0 was\u00a0 developed\u00a0 and\u00a0 released. The strategy was simple but important: each additional LEGO set obtained by a child increased the\u00a0 amount\u00a0 of\u00a0 LEGO\u00a0 bricks\u00a0 that\u00a0 the\u00a0 child\u00a0 had\u00a0 available\u00a0 to\u00a0 build\u00a0 with,\u00a0 thus\u00a0 more\u00a0 sets\u00a0 equalled\u00a0 more\u00a0 creative opportunities. The different Town Plan models included LEGO bricks as well as various plastic people, trees, vehicles and road signs. In order to help market the product to children and parents, the sets were\u00a0 creatively\u00a0 designed\u00a0 in\u00a0 collaboration\u00a0 with\u00a0 the\u00a0 Danish\u00a0 Road\u00a0 Safety\u00a0 Council\u00a0 to\u00a0 help\u00a0 teach\u00a0 children\u00a0 about traffic safety. Godtfred commented on the LEGO System of Play: \u201cOur idea is to create a toy that prepares the child for life, appeals to the imagination and develops the creative urge and joy of creation that are the driving force in every human being.\u201d2<\/div>\n
<\/div>\n
The development of the LEGO System of Play lead Godtfred to realize that improvements were needed to the LEGO brick design so that bricks could lock together firmly yet come apart easily: he referred to this as\u00a0 the\u00a0 brick\u2019s\u00a0 \u2018clutch\u00a0 power.\u2019\u00a0 Finding\u00a0 the\u00a0 correct\u00a0 clutch\u00a0 power\u00a0 would\u00a0 allow\u00a0 for\u00a0 more\u00a0 stable\u00a0 and\u00a0 secure\u00a0 LEGO\u00a0 brick\u00a0 models\u00a0 that\u00a0 would\u00a0 not\u00a0 easily\u00a0 fall\u00a0 apart.\u00a0 With\u00a0 such\u00a0 a\u00a0 brick\u00a0 design\u00a0 and\u00a0 building\u00a0 capability,\u00a0 Godtfred believed that it would be possible to create anything out of LEGO bricks. In attempting to find such a design, LEGO experimented with different plastic-injection molding designs that included various shapes and connection methods before finally selecting a brick design that added hollow connection tubes to the bottom of the existing LEGO brick design. With the improved design, when two bricks were placed directly on top of each other, the hollow tubes on the underside of the top brick connected firmly between the existing circular studs on the top of the bottom brick, providing the perfect amount of clutch power. Pleased with the results, Godtfred submitted an application in Denmark on January 28, 1958, to officially patent the improved LEGO brick design. The year signified a historical event for LEGO; unfortunately, it also represented a major loss with the death of LEGO founder Kristiansen. This left Godtfred in charge of the company, which had grown to 140 employees.<\/div>\n
\n

The 1960s During\u00a0 the\u00a0 1960s,\u00a0 LEGO\u00a0 had\u00a0 experienced\u00a0 rapid\u00a0 success\u00a0 with\u00a0 the\u00a0 new\u00a0 brick\u00a0 design,\u00a0 expanding\u00a0 sales\u00a0 to\u00a0 many European countries as well as new markets in the United States, Canada, Japan and Australia. After another fire destroyed the workshop where LEGO wooden toys were made, the company decided to stop selling\u00a0 wooden\u00a0 toys\u00a0 altogether\u00a0 and\u00a0 focus\u00a0 completely\u00a0 on\u00a0 the\u00a0 LEGO\u00a0 brick\u00a0 and\u00a0 System\u00a0 of\u00a0 Play.\u00a0 By\u00a0 1967,\u00a0 more than 18 million LEGO sets had been sold in 42 different countries, with LEGO employing over 600 people. The company had also expanded the LEGO brick design to include over 200 different shapes such as wheels, flat bricks, train tracks, windows, doors and flags; this added further detail and allowed more creative possibilities to the System of Play sets. In an effort to help children and parents with the variety of\u00a0 bricks\u00a0 and\u00a0 the\u00a0 increased\u00a0 complexity\u00a0 of\u00a0 build<\/p>\n

ing\u00a0 sets,\u00a0 LEGO\u00a0 introduced\u00a0 building\u00a0 instructions\u00a0 as\u00a0 a\u00a0 standard\u00a0 feature\u00a0 of\u00a0 each\u00a0 building\u00a0 set.\u00a0 The\u00a0 increased\u00a0 success\u00a0 and\u00a0 popularity\u00a0 of\u00a0 LEGO\u00a0 around\u00a0 the\u00a0 world\u00a0 lead\u00a0 to\u00a0 the\u00a0 development\u00a0 of\u00a0 the\u00a0 first\u00a0 LEGOLAND\u00a0 theme\u00a0 park,\u00a0 opening\u00a0 in\u00a0 LEGO\u2019s\u00a0 home\u00a0 country\u00a0 of\u00a0 Denmark in 1968. During the same year, LEGO continued to experiment with new products, introducing a\u00a0 brick\u00a0 called\u00a0 DUPLO\u00a0 which\u00a0 was\u00a0 eight\u00a0 times\u00a0 the\u00a0 size\u00a0 of\u00a0 an\u00a0 original\u00a0 LEGO\u00a0 brick\u00a0 and\u00a0 safe\u00a0 for\u00a0 children\u00a0 under five.<\/p>\n<\/div>\n<\/div>\n