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LEGO CASE STUDY

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LEGO CASE STUDY
International Management, Assignment 1 LEGO Case Study The LEGO Group was founded by Ole Kirk Christiansen in 1932 in Billund, Denmark. LEGO started by manufacturing wooden toys, today, the company’s main product is the LEGO brick with its unique principle of interlocking tubes. Today, the LEGO Group had grown into a major multinational corporation with approximately 7000 employees around the world. In 2009 it was the world’s fifth-­‐largest manufacturer of toys in terms of sales.

Up until 2004, the LEGO Group’s European distribution facilities were primarily in Germany, Denmark and France along with various other facilities throughout the world, except in North America. At this time, the distribution was outsourced mainly to DHL Solutions and Exel Inc.. In 2004 a major internal crisis drew the LEGO Group near bankruptcy. The company decided to make a radical change in its organization. Significant forecast errors and seasonal demand fluctuations made inventory management difficult. Therefore the company decided to limit the number of product components. In addition they centralized the distribution facilities in Jirny, Czech Republic, to reduce complexity and
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