Lego

|

|

|

|

|

|

|

|

The Lego Group:

Building Strategy

1. Recommendation

The action of Lego to respond the current situation is to act normal and no action is required to act. Currently, Lego faces several issues. First, the loss of trademark protection gives competitors an opportunity to directly compete with Lego. Second, the increased control over licensing agreements may affect Lego’s licensing toy lines. Third , the fasting growing toy industry attracts more competitors, which make the industry more competitive. Lego’s managements may ask do we really have to depend on licensing agreement to success. Also, do new competitors will bring threat to Lego? Additionally, what should we do to capture the growing markets?

2. Introduction

On February, Lego’s management team gathered together to create a strategic report regarding to several threats that Lego has faced over the past two years. The team was searching what actions should they pick to keep Lego’s financial success and leadership in the toy market.

3. Analysis

a. External Analysis

* PESTED for general toy market

Technology plays an important role to impact the toy manufactory industry. Since the plastic materials became available with low cost, they allow manufactories to make varieties of toys and to design toys with more innovative ways. The adoption of plastic changes the structure of suppliers. Other technology such as internet has allowed toy makers to expand their market into online market, such as gaming industry, which could build up customers’ loyalty to certain brands. Demographic structure also influences the toy industry. Since many toys lines are about comic figures, different cultures and regions will shape kids tastes toward certain comic characters. For example, kids in North American have more chance to purchase a Bat man toy than those in Asia. Social structure directly affects the sale of toys. Countries having higher birth rate will be...