'LOGO case study Essay\r'

' foundation\r\nThe essay is a st enumerategic analysis for LEGO meeting. LEGO free radical is a famous spiel comp whatsoever in the dry land, which established in Denmark. LEGO Brand is non lone(prenominal) the familiar logo, but withal the expectation. LEGO acts as a guarantee of quality and originality. LEGO’s pith value argon imagination, creativity, fun, learning, caring and quality. The essay lead luff strategic analysis by identifying the industriousness, analyzing familiar and bray milieu, listing resources and capabilities, analyzing the bon ton’s core competency, SWOT, online strategies. Then, giving the key issues. Finally, the essay will inspire the business-level dodge.\r\nIdentifying The Industry\r\nToy sell marketplaceplace add 4 per cent per year in a moderate pace in 2010, but the command for the specific fashion toy dog may muckle or collapse rapidly. Thousands of toy executers serve the world(prenominal) market, but the few l ead manufacturing. Mattel is the world’s leading toy manufacturer in revenue. LEGO is the world’s the third largest toy manufacturer. at that place be to a smashinger extent and to a greater extent than toy manufactures in Asia because its push back is cheap and umpteen subcontractors ar ready to assign favourables in behalf of their manufacture. Toy leasers sell products through various retail convey, including chain stores, discount stores, independent toy specialists, discussion section stores and online stores. There ar three points, which regard to pay management to. Firstly, fad toys argon more popular and the product life cycle decrease. Additional, children grow more after-school activities. Finally, more kids choose online activities more than toys. The interchange product for toys is electronic games.\r\nAnalysis of the general milieus\r\nEconomic element\r\nGenerally, the word’s preservation is still unoptimistic in the recent. Although European debt crisis has been lightened conditionally, its negative military force to orbiculate economy still last for a certain time. Labor be is increasing. Because of multiple factors, the summarise personify of toy improves signifi crouptly, while its profit rate falling sharply.\r\nSocio-culture\r\nâ€Å"Multiculturalism” is source of innovation and creativity. LEGO externalise department has more than 100 designers from more than 10 countries, planet realize team scattered all e preciseplace the continents. LEGO design team maintains deliberately the diversity of designers from a variety of educational and professional background. People with any qualifications and background has the potential to become a fragment of this great design team. LEGO takes part in many public welf be activities for children, for ex vitamin Ale, encouraging children to joining in environment protection. LEGO has good relationship and trust. LEGO CEO Knudstrop professs a p sychoanalyst to train the management team to support the good relationship. The peak of LEGO sale is during the school holidays, oddly in Christmas (Yi 2009).\r\nGlobal element\r\nLEGO’ come products argon made by plastic and chemical resource, that the outlay of these is influenced by the price of international crude oil. For global market, Knudstrop said that Asia market would be the smart set’s largest strategic argona in the future and LEGO was discussing the supposition of establishing production bases. LEGO assemblage has not shared a real market position in BRIC. The market in BRIC will develop strongly in the future and LEGO Groups tries to invest in the markets. For outsourcing, LEGO chooses service provider Flextrinics, which has factories in Korea, Denmark, the USA and Switzerland.\r\nTechnology element\r\nIn 1999, LEGO had the online shop. This decision help LEGO claim more consumers. Bases on the most adept make blocks, Lego developed almost brain ing games based on personal computer and the Internet, such(prenominal) as LEGO Loco, Bionicle, Lego Creator, etc. These innovations turn over satisfied consumer root growing in the virtual age. LEGO interact with consumers through Internet. In 2009, LEGO Children Clubs has members about 3.2 one zillion million and a apply website. Many adult fans of LEGO share experience, videos and pictures on the Internet.\r\n policy-making/legal element\r\nGlobal political environment is stable in general in the present-day(prenominal). global relation amidst main political powers in the world has gotten a balance after strong competition, which is relational stable. To creating a favorable atmosphere for economical culture and encouraging a positive development of the toy fabrication, most countries seek a stable, dovish and develop international environment.\r\nAnalysis of the industry surroundings\r\nBargaining power of purchasers\r\nThere are a few large buyers, which are larg e retail chains such as Kmart, Tar descend and oversize W in Australia. They buy products from many divers(prenominal) notes. Buyers bargain for higher quality, lower price and great level of service.\r\nBargaining power of suppliers\r\nFor toy industry, at that place is no bargaining power of suppliers because there are many different suppliers in this industry.\r\nRisk of refreshing entrants\r\nFor toy industry, sunrise(prenominal) companies are easy to introduction the industry because toy industry has fewer berries. The products are similar, which is easy to copy. Toy industry does not use up sunrise(prenominal) stiffs to invest a lot and transposition costs are low because most consumers so not have the firmty. If the products are more attractive, consumers will buy, especially major target people are children. It is easy to access to diffusion transplants, but it is knotty to share the market because many retail shipway about toys, including online stores, dep artment stores and so on.\r\nThreat of substitute products\r\nSubstitute products perform the similar function as toys, which are electronic games. As technology has better rapidly, more children prefer to use iPod or iPad to tamper electronic games. Threat of substitute products is truly high, which is very important.\r\nIntensity of rivalry\r\nFor toy industry, there are many competitors. The rate of industry growth is slow, so companies try to use resources to expanding consumers effectively. Because product speciality is lower, the transposition cost is low. More companies enter the industry, which promoting competition.\r\nTo sum up, for toy industry, threat of forward-looking entrants is low, supplier power is low, buyer power is moderately high, threat of substitute products is very high and competition is very fierce.\r\nIt observes that the toy industry is still an attractive industry. There are just about no barriers to entry the industry. As technology improves rapi dly, overbold scientific research and manufacturing technology apply to the toy industry continually which due to more and more new toys with high technology. If new companies have wonderful ideas or design teams, it is easy to share the market. all the same intensity of rivalry is high, companies still target get consumer base by catering to the demand of consumers. Because buyer power is high, new entrants do not irritation about their sale ways.\r\nAnalysis of Resources and Capabilities\r\n unadorned resources\r\nTangible resources refer to assets that croupe be observed and quantified, including monetary resources, organizational resources, physical resources and technological resources. LEGO has total assets for 10972 million DKK in 2010, 871 million DKK in cash flows and 5473 million DKK in equity. LEGO has a strong operating system of rules to deal with earlier supply chain enigmas. The corporation developed systems to evaluating all manufacturing cost as well. Th e optimisation of complex operating model is successful, which helps LEGO save cost and time. Additionally, LEGO’s trademark is the square resource.\r\n impalpable resources\r\nIntangible resources are a superior source of capabilities and core competencies. Creativity is the baron to come up with ideas that is valuable. Staffs are important resource because they have employee experience and the ability of innovation. LEGO Group has the great reputation from excellence quality. LEGO has the savage relationship with suppliers and distributors, which can prune unnecessary problem and makes operating system more successful. LEGO has huge loyal consumer bases,\r\nCapabilities\r\nLEGO has a fantastic innovating system. Developers have to follow morose process and use market research insights, which can fill up the market demand and avoid design mistakes. In marketing area, LEGO has great connections with consumers. The order has a specific website for customer familiarity , which interact with consumers by games, stories and activities. The club has the member about 320 million. In manufacturing areas, the confederacy has belligerent advantage, which is high automation technology. For supply chain management, the company’s production planning comes from gross revenue incentives’ withdraw forecasts. In dissemination areas, the company builds distribution channels in order to trim back the emphasis on the expansion of the distribution costs.\r\nInnovating system is valuable, because this capability promotes the sales levels. The innovation must cover the fashion and make consumers satisfied. Each company knows this concept well, so it is not closely to imitate. The company informs customer preferences by interaction with customers and builds relationship with children and their parents, who are end users. The company also keeps in touch with retail consumers to ensuring that these links head for the hills well, because they can pr ovide a steady catamenia of information. This process needs ample time and a lot money to build the relationship, so it is pricy to imitate.\r\nLego building distribution channels in order to reducing the emphasis on the expansion of the distribution costs. Firstly, the company sickens the number of logistics providers to satisfying the flexibility and encouraging suppliers to competing. At the same time, the company assesses to economies of scale. Redesign the distribution system of the company has the ability to surpass rival. This is rare and valuable. To do this action, the company cost a lot, so it is costly to imitate. The high automation technology is rare and valuable, which decreases labor cost and producing time. This technology needs a long time to researching and developing, which is hard to imitate.\r\nSWOT Analysis\r\nStrengths\r\n closely after the changes of the times perhaps is the most significant feature of LEGO. In 2002, LEGO launches new products, a new Sta r Wars film, which is very popular. LEGO began to taking advantages of internet in designing and researching. Currently, LEGO has a large number of fans, including children and kids. The company pays more attention to reflection of consumers. The company expands the market in many countries.\r\nWeaknesses\r\nThe price is higher than some other toys and the company does not have enough hypostatic stores to satisfy the consumers. Most LEGO products sell in department stores and retail stores. It is not convenience for consumers to purchase products. The high cost of manufacturing products.\r\nOpportunities\r\nLEGO products sale is concerned about seasons. The peak of sales in one year is during school holidays, especially Christmas (Yi 2009). The consumers are no concerned about ages. LEGO products are no age-limited toys and anyone can collect LEGO products. The Asia market has the great potential.\r\nThreats\r\nThe substitute is the threat, which are online games. Online games aff ect the LEGO sales, however, LEGO has the solutions. For example, improve products to make it technological.\r\nAnalysis of current strategies\r\nCurrently, LEGO redesign the distribution channel to reducing the inflating distribution cost. As for this, LEGO closed 5 distribution centers in Denmark, France and Germany, establishes an only new distribution center in Czech, which is operated by DHL (walwenfanyi, 2012). Lego keep interacting with consumers to get more information the about market needs, which takes the strength of the company. Now the company develops computer games based on the LEGO products by cooperating with game firms. The company cooperates with film organizations to making movies as well (walwenfanyi, 2012). These cooperation has bee a part of LEGO Group that has long history. These actions take the strength and are the solutions to casing threats. Articulation of key issues and/or problem\r\nHow to reduce the manufacturing cost?\r\nAlthough LEGO Group grows u p continually and rapidly, its consumers can not follow the increasing rate? What should the company do? How to expand the Asia market?\r\nRecommendations\r\n terms lead strategy\r\nCost leadership strategy forces on reducing cost to maintain competitive advantages and relative to standardized products. To achieving cost leadership, the company must strictly control costs in the management, will reduce costs as much as possible. Considered the Asia market, Cost leadership strategic is a good choice. There are more developing countries in Asia, so the life standard is lower than Europe. If LEGO can reduce the price, there are consumers will purchase goods. However, manufacture area is the weakness of the company and the company has redesigned the distribution channels. There are no more spot to reducing the cost.\r\nDifferentiation strategy\r\nDifferentiation strategy refers to a strategy to make their products and competitors’ products have obvious differences. The core o f this strategy is to acquire some incomparable value to customers. For LEGO Group, this strategy’s benefits are that the firm’s innovation system that pays more attention to consumers demand can be appeared. LEGO’s consumers have brand loyalty and there are millions of fans in the LEGO Club. There are some risks about specialty strategy. When the company enters the Asia market, the firm will face the lower-cost imitation.\r\n focus strategy\r\nFocus strategy gets the balance between cost leadership strategy and eminence strategy. Firms can serve a specific segment of an industry more effectively than industry-wide competitors. This strategy fits the toy industry a lot, because the major target consumers of this industry are children. However, for LEGO, the focus strategy is hard to reach. The reason is that LEGO’s target consumers are no age-limited people, which is its strength.\r\nIn Conclusion, differentiation strategy is the best choice for LEGO G roup. LEGO products were different from other products when it launched in the beginning. LEGO has the great brand loyalty, so that a differentiated product tends to reduce the chances for consumers to testing new products or other brands. Currently, the manufacturing cost is a problem. However, LEGO Group cannot use low cost instead of good quality. The firm can train well-differentiated products to reduce consumer sensibility to price increase. Using the better quality products to cover the high producing cost. The firm should use its strengths that are brand loyalty and innovation to expand the markets. The differentiation strategy also can defend against new entrants, because if new entrants want to share the market from LEGO, they must produce the same quality products at lower price, which is rightfully difficult to reach.\r\nConclusion\r\nThe above paragraphs recommend differentiation strategy by analyzing the industry, general environment, industry environment and the com pany’s resources, capabilities, core competency, SWOT and current strategies. LEGO can use differentiation strategy as the solutions to current issues. Using the features of differentiation to taking strengths to back weaknesses and getting up the opportunities and avoid threats.\r\nReference\r\nJan, WR, Stefan, HT & Daniela, B, 2012. ‘LEGO’, Harvard Business School [7 September 2014] Waiwenfanyi, LEGO competency analysis, 2013. obtainable from: < http://www.waiwenfanyi.com/fanyi-1492.html> [9 September 2014] Yi, FL 2009, â€Å"LEGO sales strategic plan”, Dongding. purchasable from: [9 September 2014]\r\n'