Preview

An Examination of Pricing Strategy: the Lego Group, Ltd

Best Essays
Open Document
Open Document
3336 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
An Examination of Pricing Strategy: the Lego Group, Ltd
|Running Header: Pricing Strategy |
|An Examination of Pricing Strategy |
|The LEGOTM Group, Ltd |
| |
|Jay R. Johnson |
|4/1/2012 |

American Military University

|We will examine the market structures of Monopoly, Monopolistic Competition, Oligopoly, and Perfect Competition and there subsequent pricing |
|strategies. Using this information we will examine in brief The LEGO Group as a Monopoly and now competing with Monopolistic Competition |
|tendencies. |

Legos have been sent into the edges of space aboard a weather balloon, two teens from Toronto, Canada on 25 January 2012, and been assembled on the International Space station by a Japanese Astronaut on 24 February 2012, gaining huge attention for the eighty year old toy maker. In this paper we will discuss the four common types of market structure: Monopoly, Oligopoly, Monopolistic Competition, and Perfect Competition and the different pricing strategies available to each of them. In the case study we will examine the monopolistic competitive market of interlocking brick children’s construction toys, and how The LEGOTM Group has competed with


Bibliography: Oligopoly market Structure. (2007-2012). Retrieved from BasicEconomics.info: http://www.basiceconomics.info/oligopoly-market-structure.php Merriam-Webster Dictionary larrymarak. (2008, October 12). The Bloks Forum. Retrieved from Bloks.Hyperboards.com: http://bloks.hyperboards.com/index.php?action=view_topic&topic_id=1338 Marks, S Mortensen, T. F. (2012, January 9). About Us, Lego History Timeline. Retrieved from LEGO.com: http://aboutus.lego.com/en-us/lego-group/the_lego_history/ Olson, R Stigler, G. J. (1988). Monopoly. Retrieved from The Concise Encyclopedia of Economics: http://www.econlib.org/library/Enc/Monopoly.html unknown White, M. (2008, August 18). Strategies in Oligopoly Markets. Retrieved from University of Pennsylvania, Wharton School of Business MGEC 621: http://bpp.wharton.upenn.edu/mawhite/MGEC621/Session%20Note%2003%20-%20Oligopoly%20Strategies%20I.pdf Whitman, G [2] Stigler, George J., 1988, Monopoly, The Concise Encyclopedia of Economics,2nd Ed. Retrieved from http://www.econlib.org/library/Enc/Monopoly.html [3] Oligopoly Market Structure, BasicEconomics.info, 2007-2012 [4] Olson, Reid Neil, Monopoly and Perfect Competition, 2000. Retrieved from http://courses.missouristate.edu/ReedOlsen/courses/eco165/Notes/pc-m.pdf [5] ibid [6] Monopolistic Competition, BasicEconomics.info, 2007-2012. Retrieved from http://www.basiceconomics.info/monopolistic-competition.php [7] Whitman, G., Price Theory (Perfect Competition), 2005 [10] LEGO History retrieved from http://aboutus.lego.com/en-us/lego-group/the_lego_history/ [11] Larrymarak, The Clone Ranger, Posted Oct 12th, 2008 at 09:38pm, Retrieved from http://bloks.hyperboards.com/index.php?action=view_topic&topic_id=1338
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Bis 320 Week 3 Assignment
    • 727 Words
    • 3 Pages

    Bis 320 Week 3 Assignment

    A company that experiences each of the market structures under one roof is Best Buy. While the company as a whole operates as a Oligopoly the various departments and items it offers may fall under different market structures. Best Buy has competitors such as Fry’s Electronics, HH Gregg, and Wal-Mart. The prices established for the technology offered is often time similar between each competitor. The amount of capital needed to open such as store is quite large. Expertise is needed to ensure it is obtaining good products to offer customers at a good price. The rate in which the technology changes is also quite rapid. It must be careful not to purchase too much of a product it cannot sell out of before the next new thing becomes available. Within the big, box store it has several different market structures. For example, a monopolistic competition exists among the sale of accessories for the various electronics such as cables, cases, and blank media. The offerings are large, the cost is low to get into the market, and the profits are high for the supplier and the retailer. At one time the service Geek Squad would have been viewed as a Monopoly. There were no other retail stores that offered such a service. Recently the market has changed and it is more of a oligopoly. When it originally launched the price of the services offered were very high, and customers that lacked knowledge had no other place to go. Media sold at Best Buy would be considered a perfect competition market. There is very little profit made from the sale of the product. Several competitors exist from specialty music stores like Virgin or Tower Records to mega, superstores like Wal-Mart. The pricing of products in the media department will vary based on various factors such as popularity and pricing at competing stores. Managers of the store spend a…

    • 727 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Week 4 Assignment Xeco212
    • 805 Words
    • 4 Pages

    Week 4 Assignment Xeco212

    The three important market structures in economics are competitive markets, monopolies, and oligopolies. Each market plays a different role in the economy. Competitive markets are when no firm has the power to affect the market price of a good and “many buyers and sellers trading identical products so that each buyer and seller is a price taker” (Mankiw, 290). A monopolistic market is when a specific person or enterprise is the only supplier of a certain good. An oligopoly is a market in which a good has only a few “similar or identical” (Mankiw, 346) products for sale.…

    • 805 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Xecom Uop Week4
    • 984 Words
    • 4 Pages

    Xecom Uop Week4

    To consider different roles in the economy we will have to look at competitive markets, monopolies, and oligopolies. We will discuss in this paper exactly how each of these roles play a part in our economy. Some of the things we will discuss are the characteristics of each of these market structures, along with how price is determined in each of these structures. Other topics will include how the output of each market structure is determined in terms of maximizing profits. The last two things we will look at are the barriers to entry if and ultimately the role in which each market structure plays in this economy.…

    • 984 Words
    • 4 Pages
    Good Essays
    Read More
  • Better Essays

    Ebay and Business Structures
    • 1173 Words
    • 5 Pages

    Ebay and Business Structures

    2. "Economics Basics: Monopolies, Oligopolies and Perfect Competition." Investopedia – Educating the World about Finance. N.p., n.d. Web. 19 Nov. 2012. <http://www.investopedia.com/university/economics/economics6.asp>.…

    • 1173 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    Differentiating Between Market Structures
    • 1098 Words
    • 5 Pages

    Differentiating Between Market Structures

    References: Brown, K. (2010, December). An explanation and analysis of market and market structures to include monopolies, oligopolies, monopolistic, and pure competition. Retrieved from http://www.suite101.com/article/the-market-a322381…

    • 1098 Words
    • 5 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Monopoly Vs Monopoly
    • 510 Words
    • 3 Pages

    Monopoly Vs Monopoly

    Not everyone has a “get out of jail free” card in life; unless of course they are playing the classic family board game, Monopoly. Those who monopolize a specific market most definitely do not have a “get out of jail free” card, as they are committing felonies. Both of these different monopolies are a great pleasure to win, but a pain to lose. In this paper I will compare and contrast these two different forms of monopolization.…

    • 510 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Woodty's Competitors
    • 253 Words
    • 2 Pages

    Woodty's Competitors

    A reduction in market share during these three years indicates that Woodty’s brand is becoming less preferred among competitors. There may be one reason to explain the decline in the revenue market share of Woodty’s brand. Jones toys came into existence in 2015 that posing a potential threat on it, Jones brand quickly seized 31% of revenue market share through lower price (£300) and cost leadership strategy (£180) when it entered…

    • 253 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Passion for Learning
    • 2031 Words
    • 9 Pages

    Passion for Learning

    The toy industry has seen high competition due to presence of many medium and small players. Major players competing…

    • 2031 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Best Essays

    Oligopolies in the United States Economy
    • 1779 Words
    • 8 Pages

    Oligopolies in the United States Economy

    There are many models of market structure in the field of economics. They include perfect competition on one end, monopoly on the other end, and competitive monopoly and oligopoly somewhere in the middle. In this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market. Although oligopolies can also be global, we will focus strictly on the United States here. We will define oligopoly, give key characteristics important to the oligopoly structure, explain why oligopolies form, then give an example of an oligopoly in today’s economy. Finally, we will discuss the benefits and costs in this type of market structure.…

    • 1779 Words
    • 8 Pages
    Best Essays
    Read More
  • Powerful Essays

    Lego case study analysis
    • 1354 Words
    • 4 Pages

    Lego case study analysis

    By the end of 2003 Lego was already facing crisis owing to dipping profits and declining market pool for toys. Lego had planned to expand into markets beyond building toys and needed huge investment to be made in it. But it found difficult to compete when fad players and other toy manufacturers were giving them stiff competition in a market that already was supposed to be giving lesser returns every year. This was mostly due to factors out of the control of Lego and other toy companies because, firstly, a research suggested that the demand of children who were primary customers of these companies were changing rapidly to fashionable and electronic products. They had lesser attention span and looked for instant gratification, and were lesser inclined to play with toys involving physical activity. Also Lego found it difficult to be competitive when its manufacturing base was in European markets while toy companies were moving to Far East and Middle East where labor was comparatively cheaper.…

    • 1354 Words
    • 4 Pages
    Powerful Essays
    Read More
  • Good Essays

    2 the Lego Group
    • 1122 Words
    • 5 Pages

    2 the Lego Group

    Recent (2005) overhaul of supply chain has increased efficiency and resulted in a huge cost savings. Lego is leaner and profitable…

    • 1122 Words
    • 5 Pages
    Good Essays
    Read More
  • Good Essays

    Monopoly Economics Essay Example
    • 607 Words
    • 3 Pages

    Monopoly Economics Essay Example

    "Having been found guilty, in April 2000, of abusing its monopoly, Microsoft, the software giant was ordered to be broken in two."…

    • 607 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Analysis of Global Business Expansion: Toys R Us
    • 538 Words
    • 3 Pages

    Analysis of Global Business Expansion: Toys R Us

    Toy Industry Analysis—The entrance of the toy industry is low since the toy industry needs relatively inexpensive equipment, and its mainly cost comes from the labor cost, operation cost and marketing cost. Also, the switching cost of the toy industry is not that high, which means people have less brand loyalty and easy to switch from one to another brand. The power of buyer becomes stronger since the toy industry has expanded its range of target consumers. Furthermore, the bargaining power of supplier is strong since with its low level entry mode, the market has a large number of suppliers. Companies have strong bargaining powers so that the cost tends to decrease more and more. Moreover, since the industry lies in a mature stage in its lifecycle, the competitive rivalry is strong. It’s normal to trigger the pricing wars so that the industry is easy to suffer the loss of profit.…

    • 538 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    It Is a Syllabus of Economic Analysis 2011 Iqra University
    • 254 Words
    • 2 Pages

    It Is a Syllabus of Economic Analysis 2011 Iqra University

    The objectives of this course are to provide students with a basic understanding of the economic theory and analytical tools that can be used in decision-making problems. The course is designed to equip students with the skills necessary for career position in national and international organizations.…

    • 254 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Strategic Management and Leadership
    • 729 Words
    • 3 Pages

    Strategic Management and Leadership

    * Strategic position: three emerging trends in LEGO external environment influenced its strategy: (1) strong competition from existing companies (e.g. Mattel and Hasbro), (2) threats posed by new entrants offering advanced digital products (e.g. Sony and Nitendo) and (3) as a result of children maturing earlier, the age spam during which they play LEGO products was getting shorter. To mitigate these threats, LEGO made use of its strong position on its market in Denmark as well as its core strengths.…

    • 729 Words
    • 3 Pages
    Powerful Essays
    Read More

Related Topics