The Lego Group: Building Strategy, Case 10
LEGO, the brand of toy that has been played with by multiple generations of people was founded during the Great Depression in 1932 by Ole Kirk Kristiansen, a Danish carpenter. Kristiansen started making toys out of wood and had 12 employees under him. The word LEGO combines two Danish words leg and godt, which mean “play well” and in Latin, fittingly means “to put together”. It’s ironic that LEGO was given that name because it was only later that Ole’s son Godtfred Kirk Christiansen strategically noticed an opportunity of creating the “LEGO system of Play” which was the idea that and every LEGO brick should connect to each other across multiple sets. The strategy was simple. Each set obtained by a child increased the amount of LEGO bricks the child would be able to play with. More sets meant more creative possibilities. Within this first strategic maneuver lied one of LEGO’s first mission statements which were “to create a toy that prepare the child for life, appeals to the imagination and develops the creative urge and joy of creation that are the driving force in every human being”. After perfecting the brick design by adding “clutch power” through connection tubes, which enabled the bricks to lock together firmly yet come apart easily, in 1958 Godtfred submitted an application for patent of the LEGO brick design in Denmark. During the 1960’s the company decided to stop it’s production of wooden toys and focus completely on the LEGO brick and System of Play. Later during that decade, the company grew to over 600 employees and grew its brick design to include over 200 different shapes such as wheels, flat bricks, train tracks, windows, doors, and flags. This was further implementation for their business model and mission, which was to enable creativity. More options for pieces to connect meant more creative possibilities. They then introduced building instructions for each building set. In the 1970’s, LEGO grew to over 2,500 employees. They developed new sets that included a series for girls like furniture and doll houses. They ships out of LEGO that could float in water. The LEGO Technic series was implemented which were models that contained bricks with mechanical moving parts. Other series like LEGO Castle and LEGO Space were then implemented as well. In 1979 the company again changed leadership to the third-generation Kjeld Kirk Kristiansen, Godtfred’s son, became the new president and CEO of LEGO. In 1982, LEGO reached its 50th anniversary and the company kept on growing, creating new products like DUPLO for babies and an educational line for schools. Looking for more ways to expand creative possibilities, they combined bricks with technology which included the Light and Sound series as well as a motorized Technic series in 1986. Lego continued a strategy of not only adding new series of models but adding addition models to that series. Examples of this are there increasingly popular Castle, City, and Space series where each had new model sets being released each year. The LEGO Pirates theme was launched during this time. They also made buckets full of bricks that didn’t contain instructions. This allowed for their continued mission of creative building. With much of this growth, LEGO wanted to stay connected to it’s growing market by releasing a multinational magazine to keep in touch with their market and keep customers up to date with new product information. In 1990, LEGO became a global company as one of the top 10 toy manufacturers in the world. They fully expanded into 7,000 employees and had a total of over 1,000 plastic injection machines housed in five factories. LEGO’s brand really shined during this time and the company wanted to capitalize on that brand by opening LEGO stores. In 1996 they launched www.LEGO.com. They also continued to introduce new themes into their product line. They even offered a vacuum...
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