Lego Case Study Essay

The 26% decrease in sales revenue LEGO experienced last year illuminates faults in our current growth strategy. For LEGO to survive and once again flourish in this dynamic industry, we must together implement change. Before moving forward, we shall look at our past and present to identify problems, both externally and internally.

First, the problem of changing consumer interests threatens our company. Consumers are more interested in fad toys, rather than classics, and have an increasingly shorter attention span. Consumers have also started to adopt a preference for technology at a younger age, now as young as three years old. Lastly, consumer’s lifestyles have increasingly become more structured, leaving less time for play.

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Retailers charge per shelf space, something LEGO sets require, and are frustrated with our issues with restocking their inventories.

Internally, we have a management team that hasn’t been allowed to establish roots and grow in their specified business unit because they have been rotated every 6-12 months. Although general leadership is a valued attribute at LEGO, managers must remain in one position for longer than one year in order to grow and develop as individuals, increasing their expertise in that area, which in turn allows that business area to flourish.

Another internal threat is the company’s apprehension to change, as exemplified in the resistance to the launch of the Star Wars product line. Given the dynamic nature of the toy industry, in order for LEGO to succeed, we must embrace continuous change and innovation. Together, management must stop blaming external factors for subpar performance (like good weather), decrease our apprehension to new brand directions, and begin to trust outside business leaders who are new this tight knit, family-like

Marketing starts with an unfulfilled need in the market and then creates a product to satisfy that need; Art starts with the idea and later figures out how to sell it. The profitability of a new product, how well and quickly consumers will adopt it, how it will impact our relationship with retailers, and how it might affect other product lines within our company must be considered first.

Building off this flipped method of brainstorming, we must also implement gender neutral product lines. The industry has begun to move towards this in response to a growing societal need for less gender and sexuality pigeonholed products. This will widen our target audience to include some females and increase the likelihood that mothers will play LEGOs with their children.

In response to the younger adoption of technology, we must focus on the repositioning of LEGO DUPLO line. By moving segments of our brand to target a younger demographic, we are following where the willing buyers are and are capturing the consumer and family’s brand loyalty