- Analysis of the toy industry and its success of its factors
- Macro environment
- The Clients
- The Competitors
- Industry Attractiveness
- Porter 5 forces Model
- Key Success Factors
- Analyse Lego's new business strategy
- The Ansoff Model
- Competitive Advantage
- Product Differentiation
- Vertical Integration
- Adaptation VS. Standardization
Before conducting an in-depth analysis of the toy industry, we will deliver a brief presentation of Lego, which is the core of the subject.
Lego is a Danish company, which was founded in 1934, by Ole Kirk Christiansen. The core activity of Lego is the conception and manufacture of educational toys and the main focus is on the 'Lego Brick'.
The name is derived from the Danish term 'Leg Godt 'which means 'lay Well'. In the beginning, almost everything depended on the invention and protection of the LEGO Brick. It’s the 'LEGO play system' which would be the basis of the company.
Today, LEGO is a major actor on the toy industry, and is a world-known brand (A LEGOLAND park was even created in Denmark), and is reputed to be an LEGO is an educative game which stimulates imagination and logic. Carrying a guarantee of very high quality, LEGO games are often handed down from generation to generation. This explains why LEGO is evolving on the toy industry.
We will now present an overview of the global toy industry, from the perspective of the Macro Environment on one hand and Micro Environment on the other hand, with a description of the segmentation in this market, the Porter’s 5 forces model, the industry structure and attractiveness, and finally, the Key Success Factors.
At the outset, a brief global overview of the market is mandatory. In 2008, the world toy market had a value of 78 Billion $, which represented a small decrease compared to 2007. However, after the crisis, the industry was able to take off again, and in 2009, the value increased to 80 billion , and is expected to keep growing in 2010.
[...] Today, Lego offers a very wide range of products around the brick, such as the educative toy with Lego Play System, or Lego Multimedia. This diversity became possible thanks to the huge investments made in a few years ago, on order to remain in step with the market. Brand Recognition Who does not know Lego? Almost anyone recognizes it, because it is a global brand which has been a part of almost every childhood on the planet. Thanks to its product quality, and to its advantage of being the first mover in the field of building games, Lego built a presence in the toy industry, increasing its brand recognition among children, as well as among adults. [...]
[...] Lego progressively diversified and gradually forgot its core activities. In light of the current situation in the top industry, the refocus on the Lego brick should allow Lego to maximize this product and so be back in a more profitable situation. This strategy would fit with the recent sale of LEGOLAND in 2005, in order to get back to basics. Extension of Lego’s stores: For now, the Lego stores are especially concentrated in North America, almost entirely to the United States, with 47 stores, and 1 in Canada. [...]
[...] Activity Internal External Strategy Toy Production X The Core business of Lego, and the private property of the company, this is of course internal, and that is what makes Lego so special Human Resources X Great values, which are built on the family company that Lego is, with a great team spirit and a sense of belonging. Financing X After a small decline, Lego seems to be doing better and can show pretty good financial results. Machinery and X X Very high-technological level Maintenance of machinery, needing high skills, provided by internal and external engineers. [...]
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