Case Study Of Lego

1.1) Definition of a Strategy and a Strategic Issue

A Strategy is a plan, proposal or well-organized idea to fulfill an action and design to achieve a long-term or overall aim.

Basically strategic issues are essential policy questions or serious challenges critically disturb the business, its orders, Company’s values, the mission, finance and cost, business processes, structure, product or service mix, customers and payables and the total Management.

1.2) The strategic issues came across when analyzing the LEGO Group’s crisis period and their further development

1) Sudden leave of the most powerful, knowledgeable and experienced asset

Whatever the organization when their experienced and well knowledgeable employees leave, they take away

In 2003 sales was fallen off and further it was a drop of 29 percent in 2004 worldwide, concluding the largest loss in the Group’s history of 1800 million DKK.

The losses were not due to a sudden decision as it shows that the strategies used were not fit enough to overwhelmed or face the challenges affected the Group.

After the analysis of LEGO case study, found out that the Management has not taken a hard look at every facet of operation cost and this has resulted in uncontrollable increase of Expenses.

It was all caused by a strong decline in sales and a massive increase of debts. This huge debt was almost equivalent to LEGO Group’s annual sales in 2003 and 2004. One of the biggest mistakes that the Management has taken was, spending bulk of money into unsuccessful ventures like building LEGOLAND theme parks universally, new Management requirements, sudden hiring of Specialists and unexpected ambitions.

The strategies they implemented to overcome these challenges created an extra cost to the Organization and it caused the increase of Expenses.

4) Unachievable

Therefore whatever happens the basic product of LEGO brick was having the market. Problem was laid not with the product; issue was with the concept and it was getting outdated with the modern technologies and specially relevant to video games according to age groups. To attempt the issue LEGO broaden its product line for female market and launched with a name of LEGO Friends, apparel, more LEGOLAND theme parks and etc. When they started to focus on these new entries by keeping more weight on these, their Core Business was directly affected and neglected.

The reality is, diversification should happen in any business market but it should not be harmful to the Core Product of the business. With the concept above the strategies to upgrade the Traditional Product was not so stronger like the promotional aids used to weight the new strategies.

7) Digital