Problems with Lego Essay

942 Words Jun 27th, 2011 4 Pages
Situation Analysis: * The construction toy market is worth $600 million * Lego is a $1.6 billion business in the construction toy market spread across 130 countries * Lego enjoys 80% of market share in the North American market * Lego is as an esteem brand and is looked upon not only as a toy company but also a company with toys that develop learning and new skills * Due to competitors like Mega Bloks Inc., Hasbro etc. Lego started losing market share * Some of the major reasons for the shift in loyalties were: * Mega Bloks products were lower priced than Lego * Mega Bloks introduced larger brick sizes and hence were preferred for preschoolers * The bricks created by Mega Bloks could be used …show more content…
These would help build better models * Try to innovate with the structures which further enhances the learning and development of the kids
Advantages
* Due to the above innovations, the lost interest would be regenerated in Lego products * It would serve as a good differentiator for the brand * The shifted customers might switch back to Lego * The new innovations might further influence parents to buy Lego products
Disadvantages
* The research and development required for developing new models might not be liked by the target audience * The return on the investment of R&D might not be as planned and contains a risk of further loss * The newer R&D cost might increase the price of the product

B. Targeting newer segments
Lego was majorly targeted at young boys of the age of 7-12 years. It should try to target newer segments with their wide range of products
Some of the ways of targeting newer markets could include: * Try to create different brick sizes and shapes more suited for different age groups * Try to target the opposite gender by creating

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