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  • 1. 1 COVENTRY UNIVERSITY FACULTY OF BUSINESS, ENVRIONMENT AND SOCIETY MASTER OF BUSINESS ADMINISTRATION AUSM56 Entrepreneurship and Innovations Case study: Lego group STUDENT NAME : PRANAV SHAH STUDENT ID NUMBER : 4841922 LECTURER : Chin Yong Low DATE OF SUBMISSION : 17 May 2013
  • 2. 2 Declaration of originality This is to certify that the work is entirely my own and not of any other person, unless explicitly acknowledged (including citation and referencing of published and unpublished sources). The work has not previously been submitted in any form to the Coventry University or to any other institution for assessment for any other purpose. Signed _________________________________________________ Date ___________________________________________________
  • 3. 3 Word Count Number of Pages: 15 Number of Words: 2993 Word count is exclusive of the followings: Cover Page Heading and Sub-Heading Citation and Referencing Executive Summary Conclusion Appendix Gantt Chant Content Page
  • 4. 4 Contents 1: Introduction ........................................................................................................................................5 1.1: Entrepreneur....................................................................................................................................5 1.1.1: Techno entrepreneur....................................................................................................................6 2.1: Goal..................................................................................................................................................7 2.2: People or Human: ............................................................................................................................7 2.3: Technical Factors: ............................................................................................................................7 2.4: Managerial Factor:...........................................................................................................................7 2.5: Size:..................................................................................................................................................8 3: The LEGO Group Strategy ...................................................................................................................8 3.1: Growth Strategy...............................................................................................................................8 3.2: Innovation Strategy..........................................................................................................................8 3.3: LEGO Strategic Risk Management ...................................................................................................9 4.1: The Creation and Development of Relationships:...........................................................................9 4.2: Identify...........................................................................................................................................10 4.3: Differentiate...................................................................................................................................10 4.4: Interact with different segment.....................................................................................................11 4.5: Customize.......................................................................................................................................11 4.6: Success and Barriers to Success.....................................................................................................11 4.7: CRM Advice:...................................................................................................................................12 5: Conclusion.........................................................................................................................................13 6: References: .......................................................................................................................................14
  • 5. 5 1: Introduction History ofLEGO Company Ole Kirk Christianses is owner of LEGO company .he was started company in the years of 1932 with some employees .they stared making wooden toys in his workshop in Billand from Denmark. Company first time used LEGO name in the year of 1934. LOGO is Danish world „leg Gogt‟ it means „play well‟. Plastics available at the end of second world wall in Denmark.at that time Ole Kirk buy a new plastic injection machine in the year of 1947,after a two years Kristiansen developed new idea to make plastics bricks after that company moves to wooden to plastics for longer period ,LEGO made new idea a global brand.(LEGO.com,2012) In the year of 2000 LEGO was change with name “ Toy of the Century” by world best magazine fortune moreover British toy retail association as per that views LEGO is best toys innovative company in the world. Now days LEGO small kits can be connect and assemble with various ways, to construct with different objectives like building different vehicles and working with robots. (LEGO.com,2012) 1.1: Entrepreneur Company main objective and philosophy is “GOOD PLAY” in child‟s life. The LEGO Company within the direction of mind they developed wide range of product in a world market and company main philosophy of learning and knowledge developed through play. (LEGO.com, 2012) Company main motto for giving best good and main importance of high quality product throughout the LEGO history and give consumer retain to company different products services again and again. And company started Lego systems it means children make many buildings easy to build innumerable ways. Children is one the most important things to change the world scenario and Lego also doing same thing with developed new product line base on company research with children and their parents to like to play habits, and Lego useful for education and increase learning ability for solve future problems and it was really useful for future child . AndLego always mentions with schools and institution throughout the world.(LEGO.com, 2012)
  • 6. 6 1.1.1: Techno entrepreneur Lego company introduce fist times Lego wheels in the years of 1961 and 1962, and company also developed new product like building Cars, truck and different vehicles from use Lego bricks. Moreover company introduce specifically toys for pre-school student.(Pal Burns , 2008) Lego introduce Lego system of play it means that is a fist Play and learn concept in the world .it is really useful to learning through play. And after some time company introduce another revolutionary in toys.(Pal Burns , 2008) In the years of 1958 company lance new bricks it mince new interlocking system in plastics bricks.1978 company introduce Lego space sets ,rockets and astronaut sets these all are successful series in Lego company. (Pal Burns , 2008) “Outside in” it means company started to use outside the company brainpower for use innovation of product and services. And company things another types of ideas its rally use full to understand competitor‟s technology and developed own ideas and technologies.(Pal Burns , 2008) Lego introduce “Blue Ocean” that is understand to make a toddlers with electronics toys like music and stories and company also create Galidor toys for older child, which introduce electronics games in different Lego toys.(Pal Burns , 2008) Ans2: Organisation characteristics useful to innovation process Theory of Contingency believe that cooperative network is part of organisation and that network all function essentials bound together of common goal. So every aspect if most important to success of the organisation, and each element must be set up within the organisation.in other word appropriate balance must be important in organisation. (Donaldson, 2001). As per the Jackson (2000) point of there are five Strategic contingencies that affect the organisation structure.  Goals  People  Technical factors  Managerial factors  Size
  • 7. 7 2.1: Goal Company goal is most impotent part to survive the organisation both types of goal long term or short term strategic as well as operational objective. That goal really useful to need the e ambition of the all stakeholder that creates a decision making structure. Logo Company also doing samething to set a fist goal and then company created strategies for the basis of innovation of different techniques. (Jackson2000) 2.2: People or Human: General publics are really concerned with increasing needs of the employees in the company and all needs must be satisfy in the organisation after that they motivate and attracted for the company work. Basically organisation design must take capability and need of the organisation staff. LOGO company constantly focus on staff needs and fulfil that needs and finally achieve the company employees satisfaction is may be compulsory in LEGO. (Jackson2000) 2.3: Technical Factors: Technology is really useful to carrying all types of work in any organisation. Benchmarking is most important task for specific industries and utilized the structure of successful for any firms. And LEGO Company use different technology to provide best services of the customers, LEGO use technology in department like online store, retail store and different education institution marketing offering. Lego create online playing to keep all customers with many products in Logo business. (Jackson2000) 2.4: Managerial Factor: Managerial role is important part for activities on any organisation. As per the current information management is big respond for effective organisation.it can be useful in planning production, staffing,directing andcontrolling fordifferent department oforganisation.Lego also doing four different format for to help of different team based structure to achieve innovation in Lego company . (Jackson2000)
  • 8. 8 2.5: Size: Different organisation different size .organisation size is depend on two aspect fist horizontal aspect and second vertical aspect both structure are different.as per horizontal point of increasing the size of employees it means who company started stand idle point and hold with different task implementation of different employees. And vertical line is increasing size of controlling management is become too large and performance object. So that‟s why company new level introduction is important which is make sure the company result (Donaldson,2001).Lego company use vertical line when the company near for bankruptcy .at that time company divide innovation effect in different 8 types . After thatLego company using vertical structure company solve the problems and stable position in market place.(Donaldson,2001) 3: The LEGO Group Strategy Logo always risktaking so they maintain strategic risk management.so company need to understand of strategy. So Lego is really useful to reduce risk when they take strategic risk assessment process (see Mark L. Frigo and Richard J. Anderson, “Strategic Risk Assessment,” Strategic Finance, December 2009). And “Inspire and develop the builders of tomorrow” this mission of Lego company and “Investing the future of play” that is vision of Lego company. For the help of that Lego use growth strategy and innovation strategy (Mark, 2009). 3.1: Growth Strategy Number of growth drivers is important point as per that view company select the growth strategy. Whenever Lego market share price increasing in USA many people think Lego product increasing in market but they not buy more than Germans .per example Lego have many opportunity to increase the growth in US market .and Eastern Europe is also best place to Lego increase the market share and now a day toys market increasing very fast in all over the Europe and USA. Apart from that Lego wants to invest in developing market.so toys market in not fist market to invest many in Emerging market that why Lego ready to invest in appropriate place like Lego started direct consumer activity itmince Lego move own Lego store for retail selling and start online selling and many activity like Online Game and online developed own product and design. (Mark, 2009). 3.2: Innovation Strategy On the product sideways, Lego always doing new creativity and innovation on different product and Lego try to develop a new concept on that product. Lego company constantly comes up with different plan with different product in every two to four years.as per company latest example is Lego started Lego Games systems that is family board games this is a new ways to playing with Lego bricks that means company change attitude towards the customer point of. Lego also expand the Lego education, it mince that company work with school and institution. And Lego will develop digital business in emerging market that is totally change physical world. Because digital world is not clear picture for small children and it is not appropriate for kids.so let‟s see which are the developing new things in future.(Mark, 2009).
  • 9. 9 3.3: LEGO Strategic Risk Management Lego is risk Taker Company in toys industries all over the world so company takes four steps. Step 1: traditional ERM is part of Enterprise risk management that can be explain financial risk and operational and other risk are complimented with risk taking management. Step 2: Monte Carlo Simulationswere added tounderstand the financial performance volatility (whichproved to be significant) and the drivers behind it to integrate risk management into the budgeting and reportingprocesses. (Jonathan, 2012) Financial performance stability understand by Monte Carlo simulation that proved significant driver behind the assimilate of risk management in process of reporting and budgeting those two process are generally “damage control” is giving the information about risk awareness in future prospective of Lego company. (Jonathan, 2012) Step 3: Lego have AROP (Active risk and Opportunity Planning) that system help for business project go with systematic risk opportunity process as per the part of company preparing business case before final project made. (LEGO.com, 2013) Step 4: Lego always prepare future point of because future is uncertainty and Lego management also developed long terms strategies because that is relevant for the company. (Jonathan, 2012) Ans: 4 This information gives detail about how LEGO group focus on and cooperate with different customer and Lego develop future new product and services as per customer needs and preferencesand product interest. Lego is best example for internet users Lego.com is fist online company for family as well as children website, to undertake the success of create an online environment for specific group of people. (LEGO.com, 2013) 4.1: The Creation and Development of Relationships: Lego create a relationship with complex process because Lego approach is moreabstract and less straight forward then it has been. Lego manager need to change company intention and environment ofas well as culturally .mobility is important thing to change the awareness of product, in Lego case as per children interests through video Games and development different idea in Lego Company. The model represent the information about relationship with customer oriented company ,that can be divided in Analysis and Action part and that will be used in Lego company so company best think to develop and maintain the trust of customers.
  • 10. 10 4.2: Identify Lego is different sense for business like BtoB sales and Business to customers that makes company identification in the market. Lego started direct connect to consumers with LEGO group and own supply chain andcollaboration channel and Lego land. But the Lego main thinks to increasing direct contact with consumers. And moreover Lego started collaboration with company partners consumers, so Lego will be ensure the quality control and that gives feedback on the marketing effect .Health check also helps the Lego .company define benefits of relationship with external sales channels.(LEGO.com, 2013) Lego developed new thinks like company recently investmentin SAP system that gives the information about consumers track ,and company divided consumer in 4 different group that mention in next step for different product promotion and discount and many offers.(Technology evaluation.com.2012 ) - Lego participation in social network like Facebook, twitter Lego create online environment (Lego.com) Lego provide online discussion about product as well as company information weather is positive or negative .Lego centralise all detail on one department with direct contact of customer like customer services and many more. LEGO Universe Lego launched LEGO universe in the year of 2010 that is the first online multiplayer in Lego group .they create digital imagination in Lego games and also digitalise in building structure .and players create own stories and world in virtual place space. (Lego.com) 4.3: Differentiate Lego always provide best service for Lego customers and they always try to developed better services provider likely Lego start use SAP system that makes specific offers for target customer group .they create four group .(Lego.com.2012) Lego focus on main users of product: small children and adults both are more interested and mostly engaged with Lego online games and Lego communities. SAP has several features that LEGO benefit from such as: SAP gives many features for Lego benefit like SAP gives loyalty for management software so that company integrate with ERP and CRM that ensure the reward of level of engagement with the company brand(Technology evaluation.com.2012 ).
  • 11. 11 4.4: Interact with different segment Lego SAP system is totally target on different segment and Lego directly contact with customer because of Centralisation department and making personal interact with consumer. Lego always contact with consumers based product and specific quality under the SAP systems and Lego also mention other interaction with different channels like. Lego.com create environment of Online Games and different profiles. Lego create a Universe that analyse of consumer behaviour. Lego Company analyse the YouTube video and comments. Lego start new innovation like Design by me that is creative work to understand what company wants or not. Lego participate in social media like they lance magazine and crate fun club and Lego group. Lego start face to face meeting with customers and talk with company employees. And start discussion on online and Blocks forms. Lego most important things theyalways protect children‟s information about Lego product and company present through Lego channels which that company already stared in Lego parent website. 4.5: Customize SAP is totally base on VIP systems, that mince consumers can make custom made suggestions when consumer login in Lego website. That is a ways to represent the customer loyalty (Lauren Gibbons 2011). As per the member of Lego Club Company gate many advantages such as many events like LEGOLAND and company store moreover more information about new product thought Lego club magazine base on different Age.(Lego.com,2012) Lego creative successful because many types of cross channel in Lego interaction like: Lego introduce different membership cards and coupons for generating growth as a different targeted audience. And CRM systems it present clear case of customization of product it mince Lego design by me, company allow customers to design own product. These services not only satisfy the customers but also understand about customer preference. So these types of information are useful to design Company future goal.(Lego.com,2012) 4.6: Success and Barriers to Success Some information about observer‟s point of Lego group had over diversified forcompany product line Lego moves to theme park. Other blamed that expanding popularity of video games because of low cost production in china. (Lego.com)
  • 12. 12 Lego diversification make CRM way to more complex than company could have with many product .and company face struggle in earlier time .but change of Lego at last couple of years by the way of company improve the supply chain and try to reduce number of logistics providers .and company allowed to work with external distributors.(Techchnologyevaluation.com.2012 ) Lego focus on online create environment, online games, blogs, social media after use Lego prove to be successful company in toys industries .Lego also experienced health growth during the implementation. But if company can improve customer identification and knowledge with external distribution channel and CRM really need to improve more. Now a day Lego CRM strategy is weakest point.(Technologyevaluation.com.2012 ) 4.7: Recommendation for CRM Advice: There is no hesitation that Lego has totally change environment as compare past years but company future is very high competition so many challenges in future that Lego face like and some advice that really useful for future goal.(Technologyevaluation.com.2012) Do not diversify products further, if it affects CRM negatively. Company try to increase the trust with customers and build reliability and intimacy with contact to Lego customers. (Technology evaluation.com.2012 ) Lego develop the system to handle customer identification and interact through external distribution channels.(Technology evaluation.com.2012 ) Trust is most important factors with Lego and customers relationship. Lego should more concentrate on online computer environment for kids and Lego try to developed children identification and child protection.(Technologyevaluation.com.2012) Lego keep concentrate to developed internet opportunities that could be great impact of future development and Lego also concentrate consumer supply chain and future product and services. Lego never forget of product, Lego bricks expanding the business online business environment that main part of heart and passion of the Lego Company. (Technologyevaluation.com.2012)
  • 13. 13 5: Conclusion For the high competition market information more saturated in the organisation environment .that is more important to try to maintain dynamic culture and improve the organisation. David Gain of Harvard University of writer explains to “constantly improvement requires a commitment to learning”. (LEGO.com, 2012) Lego change tradition path of the company, company change structure of services and industries plate form .Lego design the online games and also entered in the software base market and also enter with online service sector. Lego also represent children amusement park like LEGOLAND and Disneyland. And company concentrate on new innovation and services that provide with customers. Lego always believe in company mission statement only the best quality good and best expertise in toys making field. Lego give strong satisfaction about corporate as well as social responsibility through give children and give opportunity to learn when they are playing. Lego increase their efficiency of think about new invention and generate the ideas and knowledge, as per children is future of country.(LEGO.com, 2012)
  • 14. 14 6: References: Trott, Paul, 2012. Innovation management and new product development. 5th ed. England: Pearson education limited. LEGO.com. 2012. LEGO History Timeline. [ONLINE] Available at: http://aboutus.lego.com/en/lego-group/the_lego_history/. [Accessed 03 May 13]. wearedevelopment.net. 2012. LEGO’s Approach to Customer-orientation. [ONLINE] Available at:http://wearedevelopment.net/2012/07/11/legos-approach-to-customer- orientation/. [Accessed 10 April 13]. Mazzarol, Tim, 2011. Entrepreneurship and Innovation 2nd ed. Australia: Prahran, Vic.: Tilde University Press, 2011. Donaldson, Lax, 2001. The Contingency Theory of organisation. 1st ed. California: SAGA publication. Mark L. Frigo and Richard J. Anderson, 2009“Strategic Risk Assessment,”1st ed Strategic Finance,UK Reuvid, Jonathan, 2012. Managing business Risk. 9th ed. uk: Kogan Page Burns, macmillan, Pal Burns , 2008. Corporate Entrepreneurship. 2nd ed. New York: Palgrave macmillan. Techchnologyevaluation.com.2012 Relationship management [ONLINE] Available at: http://relationship-management.technologyevaluation.com/search/for/crm-lego.html [Accessed 17 May 13]