Case Study Analysis
Define the Problem: Describe the type of case and what problem(s) or issue(s)
should be the focus of your analysis.
In the mid-1990s Kjeld was planning for the future. Growth in electronic toys
and changes in playing habits were a concern. Would kids stop playing with
traditional toys? There were, however, also a lot of opportunities which could be
based on the existing strong position of the group. Kjeld was also keen on
combining initiatives with a new, decentralised management structure, which could
take the LEGO Group into the future.
List any outside concepts that can be applied: Write down any principles,
frameworks or theories that can be applied to this case.
VRIO Framework helps in conducting internal analysis of Lego and finding
the core competencies. First tangible resources would be analysed under which the
financial resources are valuable for Lego and rare too which provides it with
competitive parity and competitive advantage. Lego has modern plants and facilities
and location is valuable as it has moved its production to countries which have
cheaper production and located close to markets but this resource is easily imitable
and easily available. Lego’s trademark offers Lego name a valuable resource and its
innovative process are rare, valuable and very costly to imitate, therefore Lego’s
innovative production process offer it sustained competitive advantage.
The organizational resources offer its “shared vision” and under efficient
management of JVK all the processes are organised properly and leads to
sustained competitive advantage. Its intangible resources like skilled managers e.g.
JVK is very costly to imitate. Lego has always emphasised on innovative capacities
and these resources of innovation and creativity is very rare and valuable. The
brand name offers Lego a world-class reputation as can be seen that it ranks 10th in
the world as the strongest brands.
List relevant qualitative data: evidence related to or based on the quality or character
of something.
1. Famous brand name
The public was reluctant to accept them at first, preferring more traditional wooden
toys than plastic (then a new material). However, the LEGO bricks gained in
popularity and the basic bricks were supplemented with figures and technical
features, such as small electronic engines, which extended the playing
opportunities.
2. Focus on the brand and brick quality
Over the years, the LEGO Group has focused on brand building and product quality
to compensate for the expiration of patents. At the core of this strategy has been an
accumulated knowledge about plastics and production technologies. The results are
superior gripping power of the bricks and leadership in non-poisonous plastics which
imitators have not yet been able to achieve.
List relevant quantitative data: evidence related to or based on the amount or
number of something.
1. Sales amounted to DKK23.4 billion, an increase of 25%, and net profits were
Describe the results of your analysis: What evidence have you
DKK5.6 billion, up by 35%. In addition, the LEGO Group improved its market
accumulated that supports one interpretation over another.
share to 8.6%, ranking it third in the global toy market. Sustaining and
managing growth remains a key strategic challenge for the 80-year old
LEGO Group.
Describe the results of your analysis: What evidence have you accumulated that
supports one interpretation over another.
Based on the given information, Lego Company has high quality and
innovative products that are used by children of all ages today and has been
competitive until this day. Also, the problem of the company is the technological
product or gadgets. But despite of the countless threats and other competitors,
the Lego Company still stands as a successful and highly profitable company
throughout its business years.
Describe alternative actions: List and prioritize possible recommendations
or actions that come out of your analysis.
Implement Scenario Planning
Scenario planning is an essential tool which is used for innovation and
it is also related top strategy as it is a hedge against crisis management.
LEGO adopts innovation for growth as scenario planning and it is all
about the combination of strategy with innovation and not research and
Describe your preferred
development. Scenario action plan:
planning Write
helps in a clear statement
avoiding of what
two failures you
of over
would recommend
predicting including
or under short,Since
predicting. medium, long-term
LEGO steps
does not to any
have be carried out.
data for
future, this approach helps it in active forecasting as well as engagement
which provides best insight to the organization about the scenario that
what might happen.
Adapt with the rising world of technological advancements instead of
going against it.
In order to compete against the technological toys or gadgets that
are arising today, Lego company must also be able to adapt and create
new innovative products and ideas that involves with technology.
Describe your preferred action plan: Write a clear statement of what you would
recommend including short, medium and long-term steps to be carried out.
Short-Term:
Reduce the cost of product-making without decreasing the quality of its
products.
Medium Term:
Search for suppliers for the raw materials of the product that gives a low and
reasonable price.
Long Term:
Adopt the technological advances by using it to promote the company’s
product.
