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.

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.

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.

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.

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.