External Analysis
Substitutes: High. Fad toys, electronic products, videogames, online activities could easily be substitutes of Lego products.
Threat of new entrants: Moderate to high. Rapid imitation and limited protection of intellectual property lowered entry cost.
Suppliers:
1) For raw material, suppliers such as chemical factories should have more bargaining power. Mold suppliers have more power than the company, if mold was not manufactured by Lego itself.
2) As Inferred from the case, Lego should have certain power over plastic injection - molding machine suppliers, as the business grows.
Buyers: Buyers have strong power over Lego products.
1) Retailers would have more power than Lego if Lego decided to cooperate with retailers instead of selling directly to consumers through online shop and Lego-owned retail stores.
2) It's a highly seasoned business. Consumers bought a large fraction during the holiday season, retail purchasing occurred mainly in the second half of the year.
Rivalry:
1) For retailing channels, the rivalry is low. As Lego sold directly to consumers through two channels online and self-owned retail stores.
2) Competition among its competitors heated up in recently years. Pressures from retailers became higher. Retail channels consolidated, and mass discounters featured toys more aggressively. Outsourcing to lower cost became popular in this