Lego One More Brick In The Wall
Lego: one more brick in the wall?1
Lego in 2004 was in severe difficulty, since 1998 it had been losing money and in 2003 and 2004 Lego suffered the biggest losses in its history. Despite being a much loved toy and brand Lego was facing financial collapse. This case study details the steps taken by new CEO Jorgen Vig Knudstorp to save Lego and I will also perform a SWOT analysis detailing the internal and external environment facing Lego at that time.
Lego SWOT Analysis
Internal Environment
Strengths
Widely Loved Toy
Huge Brand Loyalty
Highly Respected
Play Well Ethos
Steady Sales Growth (Pre 1998)
Patent On Interlocking Bricks
Weaknesses
Unsuitable CEO
Company Wide Strategic Inertia
Outdated Strategic Mission
Global Sales Falling (Post 1998)
Ineffective Marketing
Product Oriented
Not Engaged With Stakeholders
External Environment
Opportunities
Recession Proof
Booming Economies From 2002 Onwards
Cheaper Labour Abroad
Market Growth In Russia
Market Expansion Into China, India & Brazil
Threats
Falling Dollar
Cheap Chinese Imports
Electronic Gadgets Such As MP3s & Mobile Phones
Ineffective Partnerships
Changing Trends Towards “Virtual Play”
Strengths:
Lego is a toy that people love and enjoy playing with, it is also a brand that people trust and want to survive. When Lego was struggling people would write to the company imploring them to save the brand, it meant that much to them. In addition to this Lego was also a company that had an ethos, its name Lego was more than just an abbreviation it was an ideal. Lego takes its name from two Danish words “leg” and “godt” which mean “play” and “well” and this was something that Lego wanted to inspire children to do. The patent on interlocking bricks is also held by Lego and the Lego brand rivals Ikea as a symbol of Scandinavian design and values.
Weaknesses:
One of Lego’s biggest weaknesses was that it was a global company that operated like a small family run business. This is because Lego is a family
Lego in 2004 was in severe difficulty, since 1998 it had been losing money and in 2003 and 2004 Lego suffered the biggest losses in its history. Despite being a much loved toy and brand Lego was facing financial collapse. This case study details the steps taken by new CEO Jorgen Vig Knudstorp to save Lego and I will also perform a SWOT analysis detailing the internal and external environment facing Lego at that time.
Lego SWOT Analysis
Internal Environment
Strengths
Widely Loved Toy
Huge Brand Loyalty
Highly Respected
Play Well Ethos
Steady Sales Growth (Pre 1998)
Patent On Interlocking Bricks
Weaknesses
Unsuitable CEO
Company Wide Strategic Inertia
Outdated Strategic Mission
Global Sales Falling (Post 1998)
Ineffective Marketing
Product Oriented
Not Engaged With Stakeholders
External Environment
Opportunities
Recession Proof
Booming Economies From 2002 Onwards
Cheaper Labour Abroad
Market Growth In Russia
Market Expansion Into China, India & Brazil
Threats
Falling Dollar
Cheap Chinese Imports
Electronic Gadgets Such As MP3s & Mobile Phones
Ineffective Partnerships
Changing Trends Towards “Virtual Play”
Strengths:
Lego is a toy that people love and enjoy playing with, it is also a brand that people trust and want to survive. When Lego was struggling people would write to the company imploring them to save the brand, it meant that much to them. In addition to this Lego was also a company that had an ethos, its name Lego was more than just an abbreviation it was an ideal. Lego takes its name from two Danish words “leg” and “godt” which mean “play” and “well” and this was something that Lego wanted to inspire children to do. The patent on interlocking bricks is also held by Lego and the Lego brand rivals Ikea as a symbol of Scandinavian design and values.
Weaknesses:
One of Lego’s biggest weaknesses was that it was a global company that operated like a small family run business. This is because Lego is a family
Bibliography: P. Kotler et al., Principles of Marketing, 6th ed, 2013 Levitt. Theodore, “Marketing Myopia” Harvard Business Review, July – August 2004