Lego Case Study
1. There are three different key characteristics which are fundamental for Strategic Management. The first key characteristic is the understanding of the strategic position of an organization, followed by the strategic choices for the future and turning strategy into action.
Beginning with strategic position the LEGO group faced different objectives which influenced the development of strategy. The level of technology and preferences concerning materials changed over the time and the company was able to found a niche market for LEGO movies and created new innovations like plastic bricks. Also - like in all markets - the internationalization has affected the strategy of the company. They entered new markets, opened markets in South America, the US and Asia and negotiated with retailers over there. Apart from opportunities, threats which were the oil crisis, financial crisis, competitors and the development of customers need, LEGO needed to react and change or chose different strategies. While the oil and financial crisis occurred, LEGO invested money in new equipment, entered new markets and launched new products. For that reason they were able to overcome these difficulties at that time. Moreover they changed their traditional strategy which included their wooden toys to an innovative strategy with plastic bricks and electronic features to adapt themselves to the ‘new’ age. Also the competitors were a reason for them to develop their strategy. To stay competitive LEGO for example hired the young innovative CEO JØrgen Vig Knudstorp and sold the LEGO theme park to Merlin Entertainments Group to be able to focus on their core product. Within their strategic management the company was always willing to take risk which is until now one of their strength. Moreover the popularity of their company and the popularity of movies like Star Wars helped them to create new products and to develop their strategy in a more modern way through conquering partly the movie industry.
Beginning with strategic position the LEGO group faced different objectives which influenced the development of strategy. The level of technology and preferences concerning materials changed over the time and the company was able to found a niche market for LEGO movies and created new innovations like plastic bricks. Also - like in all markets - the internationalization has affected the strategy of the company. They entered new markets, opened markets in South America, the US and Asia and negotiated with retailers over there. Apart from opportunities, threats which were the oil crisis, financial crisis, competitors and the development of customers need, LEGO needed to react and change or chose different strategies. While the oil and financial crisis occurred, LEGO invested money in new equipment, entered new markets and launched new products. For that reason they were able to overcome these difficulties at that time. Moreover they changed their traditional strategy which included their wooden toys to an innovative strategy with plastic bricks and electronic features to adapt themselves to the ‘new’ age. Also the competitors were a reason for them to develop their strategy. To stay competitive LEGO for example hired the young innovative CEO JØrgen Vig Knudstorp and sold the LEGO theme park to Merlin Entertainments Group to be able to focus on their core product. Within their strategic management the company was always willing to take risk which is until now one of their strength. Moreover the popularity of their company and the popularity of movies like Star Wars helped them to create new products and to develop their strategy in a more modern way through conquering partly the movie industry.