Problems with Lego

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 interchangeably with Lego Bricks
  * Lego started losing market share and hence suffered a loss of $44 million in 1988 and $166 million in 2003
  * Lego tried following strategies to restore its profitability
  * Introduced Duplo, for young preschoolers
  * Introduced Bionicles “small robo figures”
  * Created an animated movie to promote the Bionicles range
  * Introduced Mybots, construction blocks with computer chips which had lights and sound
  * Lego partnered with Walt Disney and Lucasfilms for franchising Harry Potter merchandise
  * Introduced Quattro, aimed at the younger kids
  * Introduced pastel coloured bricks for young girls

Problem Area:
  * For Lego the journey from being the one the major players and market leaders to having loses has been an exponential one
  * Major reasons being lack of innovation,   no diversification to newer segments also over confidence on their loyalists
  * Thus, there were certain gaps created, which were identified by competitors
  * Thus the major problem faced by Lego is to find solution to attain Sustainable growth.
  * To devise a strategy so that they can regain their market leader status along with maintaining and increasing profitability
  * Lego needs to... [continues]

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