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Case Study: Lego Group

999 Words4 Pages

LEGO group is a family business that started in 1932 making wooden toys in the city of Billund, Denmark. The LEGO group continued its strong growth in 2013 as revenue increased by DKK 2.3 billion in 2013. Besides toys, the company has a varied portfolio and services including games, video games, apparel and theme parks.
LEGO hasn’t just relied on the good-will built up from being one the most beloved brands on the planet. LEGO has been dedicated to maintaining its core competency as the brand with the ultimate imagination-building toy as stated in their mission: “Our ultimate purpose is to inspire and develop children to think creatively, reason systematically, and release the potential to shape their own future”. With this mission, LEGO has …show more content…

Secondly, diversification into new product areas such as computer games based upon a Lego theme or using the Lego brand.
LEGO’s suppliers have fairly low bargaining power because there is intense competition in chemicals market. In this respect LEGO holds a “code of conduct of suppliers”, this helps LEGO to sustain the product quality and maintain the product brand image.
The bargaining power of customers for the toy industry is relatively low. However, a geographic analysis of toys sale shows that sales are mainly in the USA and Western European markets. As regards the Asia Pacific markets the demand for toys is low but it is growing due to economic development. The cost of switching to competitive products is very low in the toy industry. Therefore, it is imperative that Lego is responsive to customers’ needs and …show more content…

Innovation is critical because market share can be increased. LEGO is strengthening its market share by introducing innovative products like LEGO Technic and LEGO Space.
As the name implies, a value chain is a tool that useful when trying to uncover and highlight the process in which the company adds value to their products through the manufacturing sequence.
LEGO’s patented plastic ingredient a derivative of ABS insures the right durability and color properties that LEGO desires. The wish to always deliver top quality and reliable products, with no missing components, is consistent with LEGO’s indentified values about quality. Relating these value and operational procedures to the value chain, LEGO imbues its product with superior quality and safety standards along with the right practical management to insure.
Beyond the LEGO group pledge to superior quality, LEGO utilize customer’s retention schemes via its official website; include “VIP” points that are awarded to customers for online purchase. In addition to this service, a lot of materials are available online, customers who lost their construction manuals, are able to download them in PDF form via

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