Lego's Value Chain Analysis
Introduction
The following report discusses how LEGO’s corporate values reflect both its internal and external environments. This is done by identifying the added value that the organization offers to customers which gives them the competitive advantage against their competitors (Porter 2008). In addition, it also explains the core competency of LEGO’s linkages to the functions of their value chain.
Value
Generally, what attract new customers and keeps loyal customers with LEGO is the building of children’ creativity, imagination, fun, caring and learning. LEGO’s customer groups are mainly children and caring parents, which is apparently an extremely large market (Bros 2015). Parents love the thought of educating their children through creativity
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As parents are the ones who pay for the toys and as they are the force that often decides over children’s playtime, they will be the ones who make children play with traditional toys rather than computer games. LEGO has therefore a critical competitive advantage over its competitors, as they cannot look back on such a long history.
Threat of Substitutes – High
There is the risk that children are switching from traditional toys to computer games (Miller 2014). Children are spending more time with digital products as computer games are regarded as educational tools by a number of educational institutions.
The Core Competencies
LEGO 's core competencies may be seen as coming from both its brand recognition and its ability to use innovative technology. Albeit there are many other competitors in the toy or children 's entertainment market, LEGO remains the brand of choice in the field of construction toys despite the rise of alternative substitute products such as video games.
LEGO has a strong association with contemporary IT, design and manufacturing systems which help to make the product both more durable as well as helping to reduce manufacturing costs.
In addition, their product is unique and costly to imitate. They have a unique selling point – that is to capture creative
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