This case is designed to understand the corporate strategy process and the management strategy in a dynamic environment. The LEGO case offers insight into turnaround management and development strategy in a difficult situation. Action before Strategy was needed at an early stage.
Understanding key factors for success and introducing KPIs for product innovation catalyzed sales while decreasing costs. Based on the analysis, following below are the key factors that have been identified for the turn- around success.
Rationalize the product offer – return to basics: For years, company has invested in expanding the product portfolio increasing the commitment and cost producing undesired results. The revised business strategy focused on developing and marketing the company’s more timeless core products that are in general demand …show more content…
This reduced significantly more than 50% production costs. He went back to basics, stick to the knitting, simplification – brick based strategy (Back to Bricks) keeping the LEGO legacy intact. Theme Park developments that were of huge investment involving lot of management time were hived off to stop the losses that were piling up. A rationalization of products and components helped in driving to higher profits.
Differentiation focus is used to broaden the products, targeting new customer segments. Products are built based on theme of popular movies, a line of products for girls and subsequently moved to video games and into movie-making endeavors. Lego also got better at tapping its existing huge communities – particularly adult fans of LEGO or AFOLs for new ideas. The LEGO movie turned out to be number one in American box office with increase in sales of their Model kits related to film in retail stores. This is a great example of solid differentiation focus strategy that worked
Understanding key factors for success and introducing KPIs for product innovation catalyzed sales while decreasing costs. Based on the analysis, following below are the key factors that have been identified for the turn- around success.
Rationalize the product offer – return to basics: For years, company has invested in expanding the product portfolio increasing the commitment and cost producing undesired results. The revised business strategy focused on developing and marketing the company’s more timeless core products that are in general demand …show more content…
This reduced significantly more than 50% production costs. He went back to basics, stick to the knitting, simplification – brick based strategy (Back to Bricks) keeping the LEGO legacy intact. Theme Park developments that were of huge investment involving lot of management time were hived off to stop the losses that were piling up. A rationalization of products and components helped in driving to higher profits.
Differentiation focus is used to broaden the products, targeting new customer segments. Products are built based on theme of popular movies, a line of products for girls and subsequently moved to video games and into movie-making endeavors. Lego also got better at tapping its existing huge communities – particularly adult fans of LEGO or AFOLs for new ideas. The LEGO movie turned out to be number one in American box office with increase in sales of their Model kits related to film in retail stores. This is a great example of solid differentiation focus strategy that worked