The success of Lego started in 1932 when it was founded by Ole Kirk Kristiansen in the middle of nowhere, in Billund, Denmark (Wieners, 2011). Though the first years were not the brightest period in Lego history, the fact that the company is one of the largest toy manufacturers nowadays cannot be neglected. Millions of children want to have Lego. Still, even if Lego plastic toy bricks could be found everywhere, not everyone could afford them (Wieners, 2011). Therefore, the leaders of Lego re-evaluated its current strategies and continue making improvements in order to provide all children, regardless their gender, age, or interest, become a regular customer of the company.
Strategies Lego Uses
Nowadays, it is not enough for a company to use one strategy in order to stay competitive and gain benefits. Therefore, Lego tries to make use of different ideas at the same time. The results are promising because the company has already avoided its bankruptcy several decades ago (Lutz, 2015) and becomes one of the best representatives in its field (Davidson, 2014). There are several powerful strategic decisions made by Lego:
- The necessity to investigate customers and focus on their needs. Parents are the main buyers of Lego toys. It is necessary to know what parents want to get and address not only entertainment but also education, learning, and having good examples (Kell, 2016).
- The company stops investing in unsuccessful projects and make fast decisions to close them in a short period of time. No regrets and no concerns.
- It is not enough for Lego to offer good products. It is necessary to provide customers with hints. Therefore, different categories and topics are offered to Lego brick-sets.
- Children are the main users of Lego. The company has to learn what children want to play, focus on the psychological aspects, and investigate what differ boys’ and girls’ games to make their products attractive to them.
- Employees have to be educated and trained in order to know what services they could offer and what steps they should take to succeed in marketing.
- The company has to investigate what is popular today. Such ideas as to be involved in the movie industry (several Lego movies or the toys based on cartoon or movie characters), use bright colors, and offer options help the company to get a number of benefits (Schmidt, 2014).
Changes in Lego’s Information System
Lego makes several powerful attempts to change its information system and improve its business strategies. Children are chosen as the main users of the company’s products. Therefore, Lego wants to know more about the details of games children prefer. It is not enough to know that boys like cars and wars, and girls are fond of dolls and kitchen patterns. It is necessary to investigate how children play. Lego learns that in comparison to boys, who like to play with toys, girls like to become a part of the game and identify themselves with their toys (Wieners, 2011). Lego Duplo, Lego Friends, are Lego Star Wars are the best examples of the changes offered by the company.
Changes in Lego’s Organization Design
Business strategies Lego currently develops help to identify the needs of customers (children) and the expectations of buyers (parents). If parents are usually interested in such issues and price and value of toys offered to their children, children want to use their options and never be confused with the toys offered. Therefore, Lego’s organizational design undergoes considerable changes and includes such categories as gender (boys and girls), age (Duplo for little children, and Friends for children > 5), size (mini sets, lady figure, or Duplo bricks), and theme (Friends, Star Wars, Transformers, and the Lego Movie).
Advice for Lego to Stay Competitive
In the current competitive market, it is hard to stay successful and not to lose profits. Lego demonstrates good results and continues working on its possible improvements. Considering the latest achievements and possibilities of the company, the following recommendations could be given:
- Lego should not stop investigating current trends and modern ideas. Children want to play what their parents are interested in. Cosmetics and food variety, guns and cars, famous faces and ideas – all these make parents pay attention to a product and introduce it to a child.
- In many developing countries, not all parents are able to afford themselves buying Lego production. The company has to investigate middle earnings of citizens and offer production in regards to the prices people could deal with.
- The company has to continue investigating its customers by means of questionnaires and interviews. Qualitative and quantitative methods should help Lego identify its strengths and weaknesses in regards to the relations with customers.
- Thematic shops, large Lego figures, houses or even towns made of Lego should not be the limit for the company. If people want to enjoy the Lego’s world, they should have access to it from as many places as possible.
Advice for Lego to Stay Relevant and Grow
As soon as Lego defines it competitive enough, such concepts as relevance and growth should be discussed.
- The growth of the company is possible in case more developing countries could have access to its production. There are many people from developing countries, who cannot buy toys for their children because of low incomes and poverty. Lego could develop a system under which the buyers from developed countries could provide the customers from developing countries with opportunities to buy cheaper products.
- The development of special centers where the company’s representatives could observe how children play with Lego may help to identify the shortages of the products and make the corrections.
- Sales and discounts are always interesting to people.
- It is not enough for the company to introduce a new episode. It is more important to make a customer think about buying another set in future.
Resource-Base View to Lego
Lego takes one of the leading positions in the market due to its intangible resources and the employees’ possibilities to use them in a proper way. The company is competitive and successful due to three main reasons:
- Creativity and innovation are crucial for the company because these concepts help to buy products and attract people in a short period of time. Customers pay their attention to new models more frequently than to some old models.
- Human resources play an important role because its leaders choose professional employees and promote their education and training at any cost to continue developing their skills.
- Lego’s reputation is a powerful factor. Though not many people could buy its products, they identify Lego as the main children’s designer game.
Lego is competitive due to a number of factors including value and rarity. The VRIO model demonstrates the development of Lego’s success from different perspectives:
- Its value is the attention to knowledge. Lego wants to know what customers may need and how to meet the demands of customers of different age.
- Lego brand is rare and attractive to customers. People know about its successful segmentation and are ready to consider their opportunities.
- Its peculiar feature (inimitability) is the possibility to offer innovative ideas all the time.
- The company’s success is hard to repeat because of its bright design, thoughtful insights, and intellectual property that make the company able to create towns and movies for people of different age.
Davidson, J. (2014). Lego is now the largest toy company in the world. Money. Web.
Kell, J. (2016). Lego says 2015 was its ‘best year ever’, with huge sales jump. Frotune. Web.
Lutz, A. (2015). Lego made 3 changes to become the world’s most powerful toy company. Business Insider. Web.
Schmidt, G. (2014). Lego builds an empire, brick by brick. The New York Times. Web.
The Lego Group. (2015). Annual report 2015. Web.
Wieners, B. (2011). Lego is for girls: Inside the world’s most admired toy company’s effort to finally click with girls. Bloomberg. Web.