Caaso lego

LEGO

Introduction

In 2014, LEGO® announced record results. In the financial year 2013, revenues had increased by 10% to 25.4 billion danish krona. Profits before tax were 8.2 billion DKK. The company had once again delivered an impressive operating margin of 33% before tax. In US dollars, the company had achieved $4.5 billion of revenues and profits of $1.5 billion. Revenues had increased from just over $1 billion some seven years earlier. LEGO® had replaced Hasbro to become the largest toy company in the world second only to Mattel. In just eight years, revenues at the Danish toy manufacturer had tripled. The company had turned around a loss of 2.5 billion krona in the financial years 2003 and 2004 to an operating margin the envy of high tech stocks around the world. The transition had boosted prices and gross margins from 56% to over 70%, slashed operating costs from 70% to 37% of turnover and doubled sales per employee.

Return on equity had increased from zero to almost 70% and equity values had increased from 400 million to over 11 billion DKK. Valued on par with NASDAQ’s Facebook, the company would be worth over $150 billion. Not bad for a toy company based in Denmark. The future had not always looked so promising. In presenting his report to management in June 2003, Jørgen Vig Knudstorp, then head of strategic development had pulled no punches, “We are on a burning platform, losing money with negative cash flow and a real risk of debt default which could lead to a break up of the company”. Quite a turn around! How had the remarkable transition been achieved? In this case study we analyse the performance of the company using our corporate strategy framework of analysis. We apply the same techniques to Apple [2012] and Amazon [2014]. The results are fascinating, offering comparison and contrast in the approaches used within each company

Issues:

PRODUCT DEVELOPMENT

LEGO has added a wide variety of products to supplement its core building brick ranges, from clothing, to software to theme parks. To what extent do these additional ranges and products enhance the core LEGO product and brand positioning?

LEGO created different types of products in order to have a correct brand extension; these new products must have similar attributes and psychological values similar to what they already have. To continue with the positioning that LEGO has, according to the mention of “The Marketing Mix: Products and Product Management-Brand extension and multi-branding”

¿Por qué debe LEGO esforzarse por innovar continuamente y poner en marcha nuevas líneas ?

Es primordial para desarrollar nuevos productos para identificar las necesidades y lo que los consumidores quieren, ya que están siempre cambiando.

Así que LEGO se dieron cuenta de que las nuevas generaciones de niños quieren diferente y nuevo cambio de juguetes, pues siempre buscan los nuevos e innovadores juguetes , pero no sólo los juguetes, hoy en día ; la mayoría de los niños prefieren jugar con sus videojuegos que los juguetes tradicionales .

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