Topic: Lego – Cheap Research Essays

Topic: Lego

Order Description

This is a 2,500 word report on Lego focusing on the Lego Crisis HBR case study.

The questions to consider are

Within the Lego Crisis HBR case study, what was the case for change? 5%

What went wrong in the ‘Growth period that wasn’t’? What could management have done differently? Give tangible examples drawing from change management learnings. 10%

As Jorgen Knudstorp, what would you do to turnaround the organisation? Are there fundamental changes that need to be considered? What are the risks of another crisis

within Lego? How can the leadership build sustainable results in terms of revenue growth, market share performance and margin growth? 10%

Following books can be used in referencing
1) Leading Change by John P. Kotter (13 nov 2012)
2) Exploring Strategic Change by Prof Julia Balogun, Prof Veronica Hope Hailey, Gerry Johnson and Kevan Scholes (19 Jun 2008)
3) Lewin Force Field Analysis model

LEGO (A): The Cnsrs
ln late 2004, Jorgen Vig Knudstorp faced the toughest challenge of his young career. A mere
thirty-six years old, Knudstorp had recently been named CEO of the LEGO Group – a long successful
toymaker with a world-renowned brand, but a company suddenly on the brink of financial collapse
(Exhibit 1). If Knudstorp failed to make the right decisions, and fast, the LEGO Group would likely
slip from the hands of its founding family and be swallowed up by one of the giant conglomerates
that increasingly dominated the toy industry.
Hard decisions faced Knudstorp at every turn. Should the LEGO Group fall back to the plastic-
brick product lines that defined its past, or should it continue into the new product lines that many
considered its future? Within the plastic-brick arena, should the company continue to make most of
its own products, or should it shift to a contract manufacturer? Why was the Group running out of
some products and awash in inventory of others? Why had complexity and costs risen so
dramatically and made so many products unprofitable? Indeed, why was Knudstorp struggling to
figure out which products were truly unprofitable and which made money?
The Toy Industry
As Knudstorp reflected on the LEGO Group’s crisis, he comidered the evolution of the global toy
market. The industry booked wholesale revenues of 561 billion in 201M. The retail market for toys
grew at a steady pace of about 4% per year, but demand for specific fad toys could surge or collapse
rapidly.
lndustry observers noted a few important trends. First, fad toys seemed to be rising and product
life cycles declining perhaps not surprising for an industry, as one journalist put it, “subject to the
whims of [kids] who can’t decide which shoe to put on which foot.”l Second, in many parts of the
world, children had more after-school activitier and less unscheduled time to play than in the past.
Third, for kids over three years old, demand had shifted toward technology, either in a toy itself or in
the form of toys coining with access codes to online worlds.2 As children gave up traditional toys
earlier for videogames and online activities, childhood became shorter and adolescence longer.
Parents were often torn between buying the toys their kids wanted and those they considered good
for their children.
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