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Lego Strategic Analysis

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Lego Strategic Analysis
Lego strategic analysis

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Lego strategic analysis
Introduction:
This essay will consider firstly the position of Lego in relation to both the constraints of the internal and external environment in the lead up to 2004. The essay will then go on to consider the position of the Lego group from
2005 onwards paying particular attention to how the company has reacted to adapt its internal resources in order to meet the needs of the external environment.

The Lego group up to 2004:
In 2004 the Lego group was u nder the leadership of CEO Kjeld Kirk Kristiansen, the company faced a large number of problems including posting a loss for the year of DKK 1,800m despite a group turnover of DKK
6,295m. As a result Kristiansen stepped down from the chiromancy and deposited a further DKK 800,000 of personal funds into the company. Despite these headline figures the problems facing the Lego group in 2004 many be considered has having a longer history than the single year of such great losses and be routed in both problems in the internal and external environment.

Five Forces Analysis
Porter (2004) outlines five forces which have an impact upon a business coming from the external environment and include the following elements which will now be considered individually:
Level of rivalry
Power of buyers
Power of suppliers
Threat of substitutes
Threat of entrants
Level of rivalry
The overall level of rivalry may be seen as relatively intense for the Lego group in the run up until the end of
2004. Whilst Lego occupies a strong position in
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