Background
The Lego Group is a Danish toy producer best known for its Lego brand of interlocking plastic brick toys. The corporation was established in 1932 and is headquartered in Bilund, Denmark. As of 2018, it employed more than 19,000 people (Zou, 2022). Lego sets are essentially toys that can be made using interlocking bricks of varying sizes, forms, and colors following the set’s design and outline. In 2015, the firm overtook Mattel to become the world’s biggest toy company and sales leader (Zou, 2022). Additionally, the firm has established six Lego-branded amusement parks worldwide, dubbed Lego Land, and accompanying films and games.
As previously stated, Lego is the world’s largest toy manufacturer. Children have played with Legos for generations, resulting in yearly sales of $1 billion (Zou, 2022). Lego has a recognizable brand. Lego has suffered a grisly demise in recent years as children’s toys have advanced technologically. The corporation eventually discovered methods to innovate by producing pre-packaged Lego items and expanding its line of technology-based children’s activities.
SWOT Analysis
The SWOT analysis of the Lego corporation elucidates the company’s internal and external factors, notably its strengths, weaknesses, opportunities, and threats, as summarized below.
Leadership
Jorgen Vig Knudstorp, who ascended from Director of Strategy to CEO of Lego in less than three years, is not afraid of a challenge. The venerable toy firm faced ten years of stagnant sales and poor product introductions. Experts predicted that traditional building toys would never appeal to a new generation reared on iPads and video games.
Today, Lego is well entrenched in the game. According to Knudstorp, this is a typical turnaround tale where stringent budgetary discipline and complex reorganization achieved the impossible (Grimard, 2019). It is the sort of job he was prepared for directing McKinsey’s Paris office; yet, when asked to expound on what distinguishes his approach to leadership, Knudstorp stresses the second phase of Lego’s recovery—a moment in which the potential of paradoxical thinking was discovered. Knudstorp’s paradoxical worldview is also used in internal management. “Take responsibility and let go,” one of his favorite slogans, exemplifies this attitude.
Corporate Social Responsibility Actions
Corporate Social Responsibility (CSR) motivates corporations to care about the well-being of their clients. It prioritizes corporate outcomes above ecological and climatic conditions. It is critical for businesses to match their fundamental processes with their CSR efforts (El Sawy et al., 2020). Lego Group’s CSR activities are usually well-publicized.
Additionally, it completely describes the data across digital platforms and the website. Lego offered facts about the activity and included links to each CSR subject. Lego takes a worldwide approach to expressing its Corporate Social Responsibility goals in markets impacted by the national environment in which they began operations.
Human Resource Strategy
Organizations have difficulties maintaining highly skilled personnel and keeping them interested and focused. Due to a decline in profit margins at Lego, the workforce is becoming unstable. With the advancement of new and innovative technology, workers have become more hesitant, and it is becoming more difficult for Lego to retain qualified staff. As an innovator, Lego recognized the potential of games to attract and retain new and bright employees while also keeping them aligned and focused on their work (El Sawy et al., 2020). Lego’s introduction of gamification proved to be the most effective strategy for recruiting the best candidate for the appropriate position through a virtual world of games.
Market Strategy
A large part Lego’s success is attributed to its marketing approach, which embraces digitization and places a premium on consumer knowledge. The brand is just as strong in terms of marketing as it is in terms of goods. Lego’s success and expansion are a consequence of a persistent commitment to quality mixed with an excellent marketing approach. Lego has increased its attention on consumer interaction, product quality, and customer connections in response to the rising competition in the toy business besides employing marketing initiatives to increase brand recognition.
Expansion Strategies
Businesses utilize a variety of market entrance strategies to expand into new markets and increase their worldwide presence. In the instance of Lego, globalization has resulted in the company growing at a quicker rate. Legos market and expansion strategies involve.
Greenfield investment
It involves the establishment of production and distribution infrastructure on the ground. However, businesses engage in Greenfield projects when they are certain in the profitability of a specific market. The firm has five production plants globally in Denmark, China, the Czech Republic, Mexico, and Hungary. Apart from that, it built regional centers and opened Lego land Parks in the USA, the UK and Singapore.
Licensing
Licensing is an appealing alternative for corporations interested in worldwide growth since it allows them to give up rights to enterprises with a significant market share in those areas. The Lego license agreement encompasses a broad range of items and accessories. The corporation has, nevertheless, engaged in licensing arrangements with a select group of licensed partners.
Partnerships
Partnerships have become critical in a number of instances, most notably in Asian markets. Lego has partnered with Tencent in China to provide special digital experiences for local consumers. The company’s collaboration arrangements also involve marketing firms such as Adidas.
References
El Sawy, Omar A., Pernille Kræmmergaard, Henrik Amsinck, and Anders Lerbech Vinther. “How Lego Built the Foundations and Enterprise Capabilities for Digital Leadership.” Strategic Information Management, vol.5. pp. 174-201. Routledge, 2020.
Grimard, Céleste M. “Lego Mansion: An Experiential Exercise for Understanding Leadership Styles.” Developments in Business Simulation and Experiential Learning: Proceedings of the Annual ABSEL conference, vol. 46. Pp. 8-14. 2019.
Zou, Lukuan. “Incorporating History into Innovation: A Case Study of LEGO.” In 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022), pp. 1582-1589. Atlantis Press, 2022.