Essays on Strategy Development at the LEGO Group Assignment

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The paper "Strategy Development at the LEGO Group" is a great example of a business assignment.   For the global segment, having a presence in many countries drove the company to set a target of becoming the best global brand by 2005 (Jensen 2010, p. 543). In regard to the socio-cultural segment, market research findings showed that children seemed to mature earlier and hence needed toys at a much younger age. Hence, LEGO had to change its strategy to meet the changing needs (Jensen 2010, p. 543). Economically, there was an increased demand for toys, suggesting an increase in discretionary income among families with children (Jensen 2010, p.

545). Technology-wise, there was a need to constantly update the concepts used in the manufacture of toys so that the toys could reflect the reality of the changing environment (Jensen 2010, p. 545). Industry Environment The threat of new entrants in the market was high with companies such as Nintendo, Sony, Visual Arts and Activision entering the scene. This caused LEGO to think of a number of strategies to deal with the new competition (Jensen 2010, p.

543). There was also a high bargaining power of buyers since big retailers such as Walmart were putting pressure on LEGO to produce more innovative products and have shorter delivery times (Jensen 2010, p. 545). This caused the company to focus on getting closer to retailers so as to comprehend their sales to final consumers. Additionally, the intensity of the rivalry was high with competition stemming from traditional and large toy manufacturers such as Hasbro and Mattel as well as the new market entrants. This called for more innovation by LEGO to withstand the pressure (Jensen 2010, p.

543). Further, the threat of substitutes was high because of the high number of competitors producing toys. This forced the company to implement various measures including outsourcing production services in order to make its products more competitive in regard to pricing (Jensen 2010, p. 545). Competitor Environment Most of LEGO’ s major competitors had their manufacturing operations in China and this made the company to partner with Flextronics to manage its manufacturing operations in Billund and those outsourced in Eastern Europe in order to reduce manufacturing costs (Jensen 2010, p.

545). It was however agreed that this deal would be terminated later on. The collaborations formed by Hasbro and Mattel with filmmakers also caused LEGO to announce a deal with Warner Bros to make a LEGO movie in 2009 (Jensen 2010, p. 545). LEGO was basically trying to deal with the competition posed by the two major rivals. References Jensen, AB 2010, The LEGO Group: working with strategy, case study, University of Southern Denmark. What resources and competences of the LEGO Group have enabled them to regain their successful position in the global toy market?

(400-500 words ). Resources can be defined as the assets of a corporation (Hill & Jones 2013, p. 84). These resources can be divided into two types: tangible ones and intangible ones. Tangible resources are the physical entities that a company owns, such as buildings, manufacturing plants, money, inventory and equipment (Hill & Jones 2013, p. 84). Intangible resources are entities that are not physical in nature and are created by the management and other employees. These include the brand name, the company’ s reputation, the knowledge possessed by employees, as well as the company’ s intellectual property, including trademarks, copyrights and patents among others (Hill & Jones 2013, p.

84). LEGO Group’ s tangible resources that have helped it to regain its successful position include manufacturing equipment, money, and the products that the company makes (toys). The company has used these resources to increase its production capacity, sales and hence profitability. The intangible resources of the company that have enabled it to regain a successful position in the global toy market include its brand name, which traditionally holds a strong position in the market, the interlocking principle of brick toys which was invented and patented in 1958 (Jensen 2010, p.

542), and the knowledge and intellectual capital possessed by employees and management (LEGO 2013, p. 6) which has enabled constant innovation and change of strategy to deal with changing market trends.

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