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Copy of LEGO Friends: Leveraging Competitive Advantage


Cindy Wang

on 30 December 2014

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Transcript of Copy of LEGO Friends: Leveraging Competitive Advantage

LEGO History
LEGO Journey
Brand Extensions
2004 Overhaul
Case Analyses
Our Evaluation
After the Case
*Class Assignment

:Leveraging Competitive Advantage


Founded by Danish carpenter, Ole Kirk Kristiansen
Start making plastic toys
Start making 'Automatic Binding Bricks'
"LEGO system of play" invented
The current "Lego Brick" is patented
1st Legoland opens in Billund
Mini figures created
LEGO is #1
Homemaker ('71-'82)
Friends ('12-now)
Scala ('79-'81)
Paradisa ('92-'97)
Scala ('97-'01)
Brick logo developed
New 'Outsider' CEO JVK
www.lego.com launched
Story-themed sets established
Got LEGO's?...
The End.
Brand Extensions
2003 Financial Crisis
Our Evaluation
After the Case
Class Assignment
Each group will come up with a CAGE Analysis for their specific country:
1: Italy
3: Columbia
4: Belize
5: New Zealand
6: Philippines
7: South Africa
8: Japan
1978: Themed sets
1999: Licenses for Star Wars
Followed by others including Disney
2001: Bionicle
2011: Lego Ninjago
2013: Legends of Chima

The Lego Movie (2014): Budget $60m
Total gross (Foreign & Domestic): $468m

All-Time Box Office USA List
Source: http://www.imdb.com/boxoffice/alltimegross

Source: 1. Box Office Mojo retrieved from http://www.boxofficemojo.com/movies/?id=lego.htm
Top 10 Markets for Toys
CAGE Framework: Global Toy Market
PEST Analysis
SWOT Analysis
- Lego Friends was an unprecedented success at capturing a segment of the market (over 50% of it) that previously eluded the company

- The success of Lego Friends where other Lego launches failed to attract girls is due in part to the leadership provided by Knudstorp

- Lesson learned: reaching a new or lost segment requires study of that segment
-- presumptions without study led to failures

-- allowed the company to successfully capture the segment and properly integrate it into current operations
--- production
--- marketing

- Lego Friends success major factor in Lego reaching #1

Withered Sales:
Intensified and changing toy market competition
Massive supply chain inefficiencies

LEGO Group Priorities(1):
Set a clear direction for the LEGO Group and fundamentally change the way we do business
Restore competitiveness by focusing on customers, in particular their profitability
Reduce the level of risk by rightsizing our activities, cost base, and assets to a lower revenue base

Senior VP Corporate Affairs Jørgen Vig Knudstorp (JVK) steps up to become CEO

1 Source: LEGO Group Annual Report 2006
Source: LEGO Group Annual Report 2003
Three-Phase Strategy
Source: LEGO Group Annual Report 2006
Survival Phase
Source: Source: LEGO Group Annual Report 2004

Slashed PPE
Theme Parks
Cut Labor Force

Source: upload.wikimedia.org/wikipedia/commons/4/49/Legoland_Deutschland.jpg

Source: upload.wikimedia.org/wikipedia/commons/4/49/Legoland_Deutschland.jpg

Source: upload.wikimedia.org/wikipedia/commons/4/49/Legoland_Deutschland.jpg

Source: upload.wikimedia.org/wikipedia/commons/4/49/Legoland_Deutschland.jpg

Business Transformation Phase
Eliminated Non-Core Initiatives
Supply Chain Improvements
Product Development: reduced product complexity
Sourcing: 80% reduction in suppliers
Manufacturing: reduced underutilized capacity
Distribution: 26 distributors down to four
Worked with key retailers

By 2006 Lego Group returned to profitability
Source: designyoutrust.com/wp-content/uploads/2011/12/572.jpg

Clikits ('03-'06)
Belville ('94-'09)
Fabuland ('79-'89)
Jørgen Vig Knudstorp
LEg + GOdt
Full transcript