But what was going wrong with LEGO? Could not its product line, from its snap-together bricks for young children to MINDSTRORMS, a line of do-it-yourself robot kits for older kids, satisfy the customers any more? Was LEGO a victim of the highly developed sector for electronic toys? Were its products no longer competi-tive against low-cost substitutes from the Asian market? Or was LEGO just over-diversified with its great product portfolio and theme parks? All of these questions could be answered with yes but it would not get LEGO’s main problem totally into perspective. The supply chain provides in fact the best opportunity for improve-ments. The family who founded and ran the LEGO Group was sure that they had to change the company’s operations radically to get back on the right track. In March 2004 the former director of strategic development, Jorgen Vig Knudstorp, became part of the management team together with the board and CEO Kristiansen. After analysing the main problems they passed a seven-year-strategy plan .
This case study gives you a deeper insight into the former and current situation of the LEGO Group. It shows how LEGO got back on the right track by focusing on