Lego Analysis BA3103 Essay

4937 Words Jan 11th, 2015 20 Pages
FINAL COPY:
Lyndsay Gorson, Cesar Cordero, Larry Weber, Brendan Lyons
November 10, 2014
LEGO Harvard Business Case ­ Group Analysis Paper

LEGO, like most companies in the toy industry are fighting to stay profitable in this

competitive market. LEGO has recently elected a new, non­related Chief Executive Officer in attempts implement a new, stronger business strategy. This paper will help us understand
LEGO’s further in depth by administering these four analytical frameworks, PEST, Porter's,
SWOT, and FFA.
We begin with the PEST analysis because it will help us better understand the current global trends. Figure 1 shows a trend analysis in four
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The threat of entry, however, is low due to the strong market position held by LEGO. Hasbro, Mattel, MEGA Brands, and K’NEX also have good positioning in the segment as well. Therefore, rivalry is low in this segment with few players and LEGO owning majority of the market share. Buying power is medium in this market due to being a small market segment with few options. The buyer can control the different types of mold required for specific blocks to be made. There are no compliments for this segment either.

Next, using the Porter’s Six Forces Analysis, we will analyze the video game segment of the toy industry. Figure 2: Porter’s Six Forces Analysis of the Video Game Segment in 2014

Supplier Power ­ Medium
∙ Many video games have individual developers, making supplier power lower
∙ Retailers and distributors have the power and control where the game is showcased

Threat of Entry
– Medium

Independent developers ∙ These developers may often work with an established publisher Industry Rivalry ­ Very High

Threat of Substitution
­Medium
∙ Toys
∙ Sports
∙ Other hobbies
∙ Books
∙ Television

● Well­Known Video Game
Developers:
o Ubisoft, Electronic Arts,
Midway, Acclaim, Activision,
Sammy

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