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    Strategic Analysis and Recommendations: Group 4 - Section B

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    James Sheikh

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    Strategic Analysis and Recommendations: Group 4 - Section B

    Uploaded by

    James Sheikh
    75 views13 pages

    Original Title

    Lego Case

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    75 views13 pages

    Strategic Analysis and Recommendations: Group 4 - Section B

    Uploaded by

    James Sheikh

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 13

    Strategic Analysis and Recommendations

    Group 4 – Section B
    Alex Brown
    Luis Cavero
    Amedeo Giacomantonio
    Unni Pedersen
    Jung-Ho Song
    Tetsuma Suzuki
    Presentation Outline

    Company Overview
    External Analysis
    Internal Analysis
    SWOT Analysis
    Lego‘s 8-Point Action Plan
    Additional Recommendations
    Conclusion
    Mission, Vision & Core Values

    • Mission: To encourage self-expression in children of all


    ages through creation, by enabling them to bring their
    ideas to life

    • Value Proposition: Develop and distribute toys which


    positively develop children’s mental and physical abilities
    while entertaining them and being fun at the same time

    • Core Values: Creativity, Imagination, Learning, Fun


    and Quality
    Company Time Line

    • 1932 - A company producing stepladders, ironing boards, stools


    and wooden toys, is established in Denmark
    • 1934 - The company is called LEGO (Play Well)
    • 1956 - Plastic toys
    • 1968 - LEGOLAND® Billund opens its gates
    • 1986 - The DUPLO line
    • 1998 - LEGO MINDSTORMS /ROBOTICS
    • 1999 - Star Wars
    • 2001/03 - LEGO BIONICLE + BIONICLE video game + Movie
    External Analysis

    Competitors Industry
    • Mattel: # 1 - strong growth • Highly fragmented

    • Hasbro: # 2 - diverse portfolio • Key success factors: Innovation,


    Strong Brands, Creativity
    • Bandai: strong in Asia and Europe
    • Distribution moving towards mass
    • Mega Bloks: substitute bricks retailers
    Technology • Trends: Increase in electronic toys
    and video games
    • Continued expansion of the
    Internet
    • Growth in broadband technology
    and wireless technology
    • Decreasing costs for sophisticated
    Environmental
    Customers electronic components
    • Strong growth in emerging markets
    • Customer is not always the • Improvement in US and European
    consumer economies
    • Key considerations: Quality,
    Satisfaction, Timing
    Internal Analysis

    Financial Performance
    Net sales fell by 26% in 2003 - only the 3rd loss since 1939
    No major investments in 2003

    Physical Assets
    Reduced total assets by 20% by reducing working capital

    Technical Resources
    The Vision Lab, setting up in 2003 (researching trends and innovations)
    39 Lego Mindstorm centres around the world (working with leading
    universities and science centres)

    Costs
    Cut of 600 positions globally in 2003
    Closing Switzerland factory in 2004
    S.W.O.T

    Strengths Weaknesses
    • Strong Brand Power • Limited brand image
    • Wide product line • Loss of focus on key businesses
    • Well developed global distribution • Indifferent cultural knowledge
    channel • Easy to copy

    Opportunities Threats
    • Electronic/technology driven toys • PC / Video Games
    • Sales to the Education industry • Increasing power of distributors
    • Alliances in the Entertainment • Increased dependency on licensed
    industry products
    • Growth in emerging markets • Low cost competitors
    Lego’s Action Plan

    Cost Reduction
    -Reduce development and lead times by as much as 50%
    -Terminate non-core ventures

    Increasing Value to the Customer


    -Improve delivery system
    -Increase focus on classic product lines

    Improving Speed to the Customer


    -Increase promotional activity
    -Establish a simplified global location and operations
    infrastructure
    Realign the Organization

    Technical Technical
    Quality Quality

    Service Service
    Quality Quality
    Alignment
    Timing Timing
    Quality Quality

    Reputation Reputation
    Quality Quality

    Relationship Relationship
    Quality Quality

    Price Price
    Strategic Recommendations

    Leverage Brand and Technical Expertise


    • Education Sector

    Focus on core business

    Construction ‘Violent’ Construction Educational


    Strategic Recommendations (cont’d)

    Target Developing Countries


    • Currently less than 10% of sales outside US & Europe
    • 376 million children in China (20 times the US figure)
    • Culturally Customized Toys
    COMPETITIVE STRENGTH
    Strong Average Weak

    IND
    High CHN
    USA
    MARKET EU
    ATTRACTIVE-
    Medium
    NESS

    Low
    Strategic Recommendations (cont’d)

    Target Parents of Young Children


    • Re-branding Products (problem)
    • Reverting to the original Lego brand
    • Increase marketing aimed at parents of infants and small
    children, and stress Lego’s educational benefits

    Strategic Alliances (Entertainment Companies)


    • Major entertainment franchises:
    Star Wars and Harry Potter
    • Bionicle / Miramax:
    Mask of Light been translated in 26 different languages
    Questions?

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