Innovation At The Lego Group Case Solution
Executive Summary
This case is based on a firm where planning is very crucial, but the firm’s plans-fail to work well, consecutively. In 2003, the LEGO firm had many positive standards, it had a well-reputed brand with some better kinds of toys. It had a favorable consumer base in many regions, which were better than its internal planners. LEGO had been able to grow this item to many sections,such as: toys, games, clothing, funfairs, movies and various kinds of plays, which helped the firm in earning plenty of money (but not income). However, by 2003, the firm was had gotten surrounded by major difficulties. Within aperiod of five to ten years in past; the toys’production had been replaced thrillingly, which had put big questions over the survival of LEGO in the toy industry.
These replacements, combined with random financing and decreased revenue of some key toy lines, were combined to almost remove the LEGO Group from the industry. The firm had lost approximately DKK 1 b in 2003 and its sales plummeted. This was the biggest loss in the firm’s history, and many investigator believed that a downfall and possibly a split of the firm’s sales was about to occur. The firm quickly sold commodity, decreased its employees and exported items to decrease the cost-sin order to generate income, but the firm had awareness that in order to survive, it had to make its own plan network. It had to upgrade the marketing schedule, success amount, and profitability in its plan process. This case shows many of the issues which LEGO experienced in the year 2004 as well as in the preceding years..
1.What models of innovation do you think Lego has used throughout its history?
When faced with computerized competitiveness; LEGO’s journey to protect its market share was much pleasing. In 2017, it sales decreased by 8% (the first decrease in more than a century) and a total layoff of 1,400 had taken place in the company. LEGO needs a new expansion plan to deal in the ruthless and unforgiving toy-industry (toy market had a global expansion by 1% in 2017).When LEGO faced these difficulties in 2003; its first move was to sell a diversity of new items, such as: computer games and funfair. However, these establishment shad unplanned difficulties, adding to the problem so consumers. The difficulties being faced in resources and the supply of vendors were the major setback for LEGO.
LEGO’s popular transitional plans appeared to be delightful for its increasing consumer network. LEGO had used the future Lab to introduce decreased-risk, decreased-cost pattern methods, which led to the fast-evolution of low-cost designs. The purpose was to increase the customers’ feedback on a smaller scale before making big financing, considering the LEGO’s principle of, “Individuals don’t have to work, to work with us.” To increase this practice; the firm introduced “LEGO plans”, an online assemble purchase platform, which allowed the customers to share and vote for the ideas they wished to see being added to the product line. LEGO Ideas developed hundreds of proposals each year, using online networks to make feasible data. By focusing on advertising products;LEGO had enabled itself to reach new customers with its visible strength and brand realization. Two successful efforts were LEGO planning, which increased the brand awareness of LEGO among adults, and LEGO familiar, which increased its female customer base.
2) Why Lego failed in some of its innovations.
In 2003, Lego was in debt of $ 800 m. Its sales had decreased and the future seemed to be highly uncertain for the Lego toy firm. Just a few yearslater, in 2015, Lego had become the world’s strongest brand, generating a profit of $ 600 m.
Lego admits that it went wrong with the Lego Universe. The biggest failure was that the firm needed consumers to purchase a DVD in the store before they could start playing the game online. After LEGO conducted massive research to detect the cause of LEGO Universe’s failure, it came to know that the kids were looking for a real game or toy, which they could connect with and sense while playing.(Robertson, 2013)
Although the usage of market study can help LEGO in having sensible operations, but Lego’s still needs a better understanding in order to make better and profitable strategies for the firm’s prosperity rather than spending on heavy researches.
LEGO had created a hurdlein using the game despite the fact that the effective it should MMOG had used the same pattern but its results were opposite. However, the drawback of LEGO was that it had become heavily reliant over the researches, which started to affect its games negatively.This is obvious contrast to the saying of Apple’s Steve Jobs “they don’t use market studies to make their items”………………………
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