The classic stuck in the middle problem, and the way the company managers that risk and pursues its dual or integrated strategy without ending up stuck in the middle is its philosophy and system of constraint or guided innovation. Strategies for LEGO.docx - Product:LEGO Architecture You will learn about the two main generic strategies that businesses can pursue, which can be complemented by broad or narrow scope to yield four key types of strategic positioning. Find out how to get started with this free guide. In the five years leading up to this point, Lego had invested in massive growth. Stock was piling up in warehouses because Lego had too many product lines, and there just wasnt enough room on the shelves in toy stores. They became convinced that if all they offered was another box of bricks, they would become a commodity, Robertson said. Topics. Outside of work, Joyce loves reading, traveling and exploring her new found home in the ancient city of Athens. The company threw itself into a variety of new ventures while still retaining its original products. Over the years, LEGO bricks have grown in popularity and have been named Toy of the Centurytwice. and Unsplash Goldin and her team are now working to position Lego as one brand globally, and are preparing for future growth by creating a holistic, immersive experience for consumers. Then book a free retail customer engagement consultation withContactPigeon. Lego Brand Strategy - 2758 Words | Internet Public Library Lego's very close to failing as a company in the early 2000s but managed to strategically renew itself through great leadership and through its dynamic capabilities. With almost 300 million kids under the age of 18 in 2023, the Chinese toy market is extremely profitable, and reached a revenue of more than 18.9 billion USD in 2022. Step 3 - Marketing Plan. Innovation leaders need to lean on a range of different approaches for innovation, since tactics will vary depending on the scenario and business goals. In 2014, it released The LEGO Movie, which brought in some $500 million for the company, according to The CFO Center. LEGOs Facebook page has well over 13 million followers and regularly updates the page with photos and videos of new LEGO releases and innovative creations. Lego had even been able to engage its existing customers to influence new product development and nurture an entirely new consumer base. Read our Ideas Made to Matter. To reveal the advanced rules section go to Edit additional conditions, 7. With stalling sales, they need to expand to new markets, requiring a dramatic shift in supply chain strategy. Product: LEGO Architecture Product Life Cycle The life cycle of LEGO Architecture products is normally 1 year but it depends on specific products and it varies from half a year to 10 years. Lego toys are not very cheap as a lot of precision and high-quality material goes into the making of such toys. 2023 Coursera Inc. All rights reserved. LEGO's mission statement is "inspire and develop the children of tomorrow.". We use positioning strategy and data to give your business a strong foundation and a clear path for growth. When I have taught this case in class, I tried to get students to see that differentiation through innovation is a key selling point for Lego. "The LEGO brand is one of the most recognized and reputable brands in the world and the protection of IPRs is extremely important to us . The goals of brand positioning vary per business. LEGO began to evolve product development practices to support design thinking principles, empowering experts to come up with ideas for new products based on that critical customer input. Diversification is an essential part of the LEGO marketing strategy. The online community has over 10 million members, offering an effective way of increasing brand awareness by enabling younger audiences to engage through social media. Learn the details of Lego's growth strategy, and discover how they continue to expand in a saturated market. You will be able to: Last modified March 30, 2023. The problem, said the family-owned Danish company, was weaker demand in established markets such as the US and parts of Europe, where a saturation point had been reached. . LEGO products are in 130 countriesbut the company is always looking to expand its operations. No innovation lasts forever, said David Robertson, a senior lecturer in operations management, in a recent webinar hosted by MIT Sloan Executive Education. This focused strategy paid off, as LEGO saw a 4% increase in profits and sales in 2018. This 20-month MBA program equips experienced executives to enhance their impact on their organizations and the world. In 2007, it paired up withChicago-based architect Adam Reed Tucker, who had been constructing buildings out of LEGO bricks. Lego brought BETC on board to help find a new . Lego's Growth Strategy: How the Toy Brand Innovated to Expand - LinkedIn Many of these new products included motorized and electronic elements; however, these frequently proved to be more expensive to make than their selling price. The themes were an inspiration from cartoons, comics, movies and also video games. In 2016, LEGO reported stalling sales in Europe and North America, but double-digit growth in China. Knudstorps first decisions included widespread structural and financial reforms. All rights reserved. So, a brand like LEGO could further increase its revenue, on average, from this automation alone. Current Strategy LEGO's current strategy (Appendix B: Value Chain Analysis) is to expand product lines and continue maintaining their market dominance in the toy-building market. They tripled their workforce and tripled the number of lines they offered, and this had left the company over-extended. Highly recommended course materials. Lego was not just restricted to toys but it also entered a much broader space in the market. As China continues to develop a very affluent middle-class numbering in the millions within the coming years, it represents a significant opportunity for LEGO and its market position. We would rather do the investments upfront to be leading that change.. Lego technic was a complex form of the Lego toys which included building complex machinery. According to CMO Julia Goldin, its been key to improving efficiency and effectiveness, not just in marketing but across the business as a whole. "They believed they needed to disrupt themselves before somebody else did.". Already thinking about how to grow your brand? The names and other brand information used in the Marketing Strategy & Mix section are properties of their respective companies. Pursuing multiple, complementary innovations that harmonize to create something is much better than any one key alone.. Their Instagram page offers similar content, and posts receive numerous likes and comments, showing excellent user engagement. It has been reviewed & published by the MBA Skool Team. As China continues to develop a very affluent middle-class numbering in the millions within the coming years, it represents a significant opportunity for LEGO and its market position. This mix of time-honored ideals and cutting-edge marketing enables them to adjust to societal changes and grow even through challenging times. . Brand Positioning 101: What It Is and Why You Need It | Acquia - Widen It had started off as stackable wooden blocks which then converted to plastic. The study examines how interest towards toys turns into playful and productive activities at adult age, through actual manipulation of three types of contemporary playthings: dolls, soft toys and action figures. Rather than relying on outside franchises to drive growth, like it did in the early 2000s with Star Wars and HarryPotter, LEGO decided to create its own series of blockbuster movies. It can be easy to oversimplify the product and product description as a fun day at a Lego-themed park for the family, but this is not necessarily the best marketing approach to . It is manufactured by The Lego Group, Denmark. Get a head start with survey templates written by our research experts. Following are the products or services in its marketing mix which is offered to all customers: Lego blocks are the most popular product by the company. Lego SWOT Analysis 2021: Building Blocks of Success To say it in another way, Phillip Kotler, marketing author and professor, defined brand position as "the act of designing the company's offering and image to occupy a distinctive place in the mind of the target market." What do you want your customers to think of when they hear . These blocks are used to interconnect each other and can be used to construct various shapes, designs etc. In this Lego SWOT analysis for 2021, you will see what makes this Danish company one of the biggest toy companies in the world. Every second, about 1300 LEGO pieces are made around the world. Legos are awesome toys that help shape young children's intellects, critical thinking skills, and, why not, even problem-solving skills. The companys name is an abbreviation of the Danish words 'leg godt' which together translate to 'play well.' The companies are not associated with MBA Skool in any way. The interactive program gives participants aset of tools and techniques for mastering new approaches to innovation and astructured framework for applying those tools and techniques within their organizations. We are making these investments from a sound financial base to capture the opportunities being created by mega-trends, such as digitalisation and global demographic and economic shifts which are reshaping the industry. LEGO's products are based on a strong culture of creativity and have a high-quality brick system. You need to be dating your customer, not fighting your competitor.. This percentage actually also represents the recovery rate of this tactic. While this line saw LEGO venture out of its typical product and audience range, the Architecture series nonetheless retained a distinctly-LEGO feel that played to peoples nostalgia. LEGOs main eCommerce website offers many outstanding features in its category, product, and checkout process pages. The levels of passive and organic customer engagement LEGO has reached are out of this world and surely a case study for any brand, in any industry. LEGOLAND theme parks have opened in Billund, California, Florida, Malaysia, Dubai, Windsor, Japan, and Germany. As Head of LEGO Retail, Claus Flyger Pejstrup, said: Our LEGO stores are a great tool for building brand awareness and emotional connection with our fans.. ], Best Personalized Shopping Experiences in Retail, eCommerce Dashboard: KPIs, Key Components, and Examples for the Perfect Template, ChatGPT and Retail: 7 ways AI Can Increase Business Efficiency, The 28 Best Customer Experience Examples in 2023, 54 eCommerce Homepage Best Practices That WORK [2023], 21 chatbot retail use cases to replicate for your brand, The best 6 dynamic image generators for eCommerce, Product page best practices: The 38 most efficient tactics to replicate in 2023, 17 Retail Events (EU): Which to Attend and How to Take the Maximum Value Out of Them, Retail Week Live 2023: Why You Should Not Miss It, Shoptalk 2022 Europe: How to get properly prepared for the famous retail event, ContactPigeon at Xenia 2021 Hospitality Expo (Highlights), LEGOs revenue in 2019 was $531.2 million US dollars.