Exploring Strategy: 9th edition, 2010: Johnson, Scholes and Whittington: Prentice Hall Publishing
LEGO Group: Working with Strategy – pages 542 – 546
1. Explain how the development of strategy at the LEGO Group reflects the key characteristics of strategic management.
As a reminder, strategic management has three key characteristics: strategic position, strategic choices and strategy into action (Johnson, Scholes and Whittington, 2010. Exploring Strategy, 9th edition. Virginia Woolf and The Judicial Imagination. London : Prentice Hall Publishing.)
Let’s use the development of LEGO’s Strategy (1995 – 98) to explain how the development of strategy at the Group reflects the key characteristics above:
* Strategic position: three emerging trends in LEGO external environment influenced its strategy: (1) strong competition from existing companies (e.g. Mattel and Hasbro), (2) threats posed by new entrants offering advanced digital products (e.g. Sony and Nitendo) and (3) as a result of children maturing earlier, the age spam during which they play LEGO products was getting shorter. To mitigate these threats, LEGO made use of its strong position on its market in Denmark as well as its core strengths.
* Strategic choices: LEGO set ambitious goals to guide future strategic developments including brand recognition, increase in sales, international growth and strategic alliances.
* Strategy into action: to implement the new strategy, LEGO introduced a new and more decentralised management style. As a result some old and senior managers left while new ones and more specialists were recruited.
2. What features of the external environment have influenced strategy development at the LEGO Group?
The following features of the external environment have influenced strategy