Introduction
Currently, the LEGO ® Group is a global enterprise that has taken the place of the largest toy manufacturer. General income and operating profit have been steadily increasing in recent years, even despite the driving force of the digital industry in modern realities. Even the secondhand Lego market is growing in price by 11% annually, which has faster profits than gold, stocks, bonds, stamps, and wine (Sweney, 2021). The company’s success is the result of its focus on traditional toys and active strategic partnerships that allow it to diversify its range with products such as movies and games. In this paper, the activity system for current LEGO strategy will be investigated and analyzed, as well as an assessment of its changes over the past decades.
The LEGO ® Group’s Strategy
The company’s main activity is the development, production, and sale of gaming materials. The strategy of modern management never denied the differentiation of the standard game line, which expanded the range to the introduction of clothing, books, video games, and other abstract products. Despite the work of professional marketers and the company’s extensive experience, the strategy proved unsuccessful in the early 2000s. It almost brought the company to bankruptcy in a world with growing competition and children showing more interest in video games and technical products. The situation was changed by the turn of the business model, which creates more value for customers with less use of resources. This model included reengineering operations and increasing customer orientation. Actions mentioned laid the foundation for the activity system for the modern strategic model.
The current strategy implies the optimization of activities and the reduction of the complexity of operational processes. The number of toy bricks is decreasing, the production of which made it difficult for new lines to enter the market. The work is aimed at a standard design, which allows the company to adapt faster to market trends. The number of suppliers was also reduced, which helped focus on larger retailers. The most obvious and expected aspect of a business strategy is getting rid of products that do not bring sufficient profit. These actions help the current plan keep the LEGO in a leading position among toy manufacturers.
Since the company has existed since the 30s of the XX century, it has repeatedly changed its business model to meet the requirements and needs of potential buyers. For example, the LEGO ® Mindstorms line has smart bricks with software and hardware to develop miniature robots. The company also tries to adapt to different categories of children, including oppressed and minority groups. For the first time in a long time, a LEGO ® Friends line was created, aimed at an audience of girls. Active sales are carried out in foreign countries, where the company has also managed to gain buyers’ trust. Audience orientation, being part of the business strategy justifies itself and increases the company’s profit.
Conclusion
From all of the above, it follows that the strategic positioning of the LEGO can be assessed as differentiated. Having gained market share, the company offers its customers unique features from decade to decade and is not afraid to modernize the strategic model to increase profits. LEGO adheres to this positioning, if not from the beginning of the foundation, then for a long enough time to say that the program has not undergone dramatic changes in a decade.
References
Sweney, M. (2021). Investing in Lego more lucrative than gold, study suggests. The Guardian. Web.