Lego: Management and Business Strategy
Lego Case Study:
1. How did the information systems and the organization design changes implemented by
Knudstorp align with the changes in business strategy?
Knudstorp changed the business strategy by reforming the production, supply chain and various other departments. This mandated that the supporting Information Systems be changed. Also, the company’s expansion into newer technological domains such as virtual interaction games and video games forced the company to use advanced technologies for their Information Systems. Lego implemented an enterprise architecture using software package SAP, which enabled them to modularize and standardize the information systems architecture. Two most important modules for Lego are Supply Chain management and Product Life Cycle Management. So, the new SAP implementation of these modules perfectly aligned with the changed business strategy. Knudstorp also made a drastic change in the organizational structure of the company. Lego switched its employee pay structure, offering incentives for appropriate product innovation and sales. This aligns with the business strategy of expanding business through innovation and creativity.
2. Which of the generic strategies does Lego appear to be using based on this case? Provide support for your choice.
There are three kinds of strategies Lego used, they are 1. Business Strategy 2. Organizational Stategy 3. Information Systems Strategy. Lego’s new Business Strategy of embracing the newer technologies and expansion into newer domains is evident in its involvement in Hollywood and entering into video games and virtual-interaction games markets. Also the new strategy is to change the target customers of the Lego products. In order to align with the Business Strategy Lego also made drastic changes to its organizational structure. It made changes to employee pay structure in a way to improve innovation and creativity. Another most important change is made to the production process. The
1. How did the information systems and the organization design changes implemented by
Knudstorp align with the changes in business strategy?
Knudstorp changed the business strategy by reforming the production, supply chain and various other departments. This mandated that the supporting Information Systems be changed. Also, the company’s expansion into newer technological domains such as virtual interaction games and video games forced the company to use advanced technologies for their Information Systems. Lego implemented an enterprise architecture using software package SAP, which enabled them to modularize and standardize the information systems architecture. Two most important modules for Lego are Supply Chain management and Product Life Cycle Management. So, the new SAP implementation of these modules perfectly aligned with the changed business strategy. Knudstorp also made a drastic change in the organizational structure of the company. Lego switched its employee pay structure, offering incentives for appropriate product innovation and sales. This aligns with the business strategy of expanding business through innovation and creativity.
2. Which of the generic strategies does Lego appear to be using based on this case? Provide support for your choice.
There are three kinds of strategies Lego used, they are 1. Business Strategy 2. Organizational Stategy 3. Information Systems Strategy. Lego’s new Business Strategy of embracing the newer technologies and expansion into newer domains is evident in its involvement in Hollywood and entering into video games and virtual-interaction games markets. Also the new strategy is to change the target customers of the Lego products. In order to align with the Business Strategy Lego also made drastic changes to its organizational structure. It made changes to employee pay structure in a way to improve innovation and creativity. Another most important change is made to the production process. The