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1. Raye Danny Abdullah Riki
WINNING IN THE NEW ERA

2. The New Emerging Challenges
Recommendations
Analysis of Lego
Proposals to immediate actions
Proposals to the long-term
expansion
Conclusion
CONTENT

3. The Acquisition of Marvel
Entertainment by The Walt
Disney Company
The threats of losing licensing rights
Lost legal battle with MEGA
Brands, and lost the LEGO
brick trademark
Without protection, LEGO will lost
strengths when competes with others
in brick sets
Aggressive competitor –
Hasbro, who launched a new
rival product line – Kre-O
Lego will face the severe competition
in brick market
Three Main Threats

4. Immediate actions to respond to threats
• Negotiate with Disney with licensing rights
• Beyond Disney: develop new businesses:
• DC
• TV Shows
• Video Games
• Expand in the emerging markets: China, India, Brazil, Iran
The Long-term expansion
• Enlarge customers demographics
• Brand collaboration and tap into the new markets
• Invest into the all-new products
Recommendations

5. Assess the strategic position of the business
• Assess past performance
• Identify and evaluate current strategy
• Forecast future performance under current strategy
• Decide on the need, nature, and urgency of change

6. Lego has been achieved with strong profitability
Assess past performance
•Profit margins(Net profit)
• Key expense ratios
• Return on equity
Profitability
C,F&K

7. Lego have a chance obtain more loans to expand
business
C,F&K
Assess past performance
•Profit margins(Net profit)
• Key expense ratios
• Return on equity
Profitability
•Financial Leverage ratio is
1.0 in 2010
• The better leverage is
1.8-2.8
• They can get more loans
to expand
Financial Position
• The biggest brick toy
company in the world
• In 2010, the fourth-
largest toy manufacturer
in the world
Market Performance

8. Assess past performance
The organization is healthy based on
strong problem solving ability

9. Wood toy
Plastic
toy
Brick toy
Assess past performance
The ability to learn faster
than your competitors
may be the only
sustainable competitive
advantage
- Peter Senge
The organization is healthy based on
high learning ability

10. Assess past performance
OrganizationalHealth
Operating Performance
-
+
+-
desired
state
troubled
organization
complacent
organization
crisis
Lego achieves to high performance

11. A Strategic Framework: The Diamond-E Framework
Strategy Environment
Management
Preferences
Organization
Resources
Three threats:
Competitors
Trademark
Licenses
HR: Professional designers
Finance: Healthy data
Supply chain: efficiency
Change, creative, and innovation
• Focus on the brick toys
• Other core actives support the
brick toys
Assess past performance

12. Forecast
It is hard to
Maintain the top
1 position in
brick toy field
Lose the position
of the third-
biggest toy
company in the
world
Growth rate will
decrease sharply
in profit
Assess past performance
Lose the advantageous position under current strategy

13. A Strategic Framework: The Diamond-E Framework
Strategy Environment
Management
Preferences
Organization
Resources
Three threat:
Competitors
Trademark
Licenses
HR: Professional designers
Finance: Healthy data
Supply chain: efficiency
Change, creative, and innovation
• Get licenses
• Innovations in product, licenses,
cooperation, manufacture with
expanded target consumers.
Make new strategies

14. Lego will have a big picture under new strategies
Make new strategies
Maintain the top 1
position in brick toy field
Become the biggest toy
company in the world
60%-70% growth rate in
profit
Forecast

15. The Licencing Battle
• Negotiate with Disney
• Leverage:
• Brand Recognition
• Fan Base
• The World’s Biggest Brick Toys Maker
• The World’s Best Brick Toys Maker
• Sophisticated Supply Chain Operation
• Beside Disney
• DC
• TV Shows
• Video Games

16. DC

17. Game of Thrones

18. Minecraft

19. Exploding Markets
• Expand to Emerging Market
• China
• India
• Brazil
• Turkey
• Malaysia
• Establish Manufacturing Base
• Products and Marketing Strategies Localization
• Control the Distribution Network
• Promote the Brand
• Control the Quality
• Flagship Stores in First-Tier Cities

20. A LEGO Landmark

21. Customer
• Lego’s mission
...to inspire and develop children to think creatively…
• Target market
• Children Adult
• Family
• Artist

22. Customer
• Enhance customer relationship
• Social network, facebook Instagram
• Hire designers from customers
• Customers know what they want

23. Brand collaboration
• Nestle
• Instead of buying license, we can sell our license

24. Brand collaboration
• Ikea
• Customize furniture
• Application in the real world

25. Product
• High tech brick
• Electronic device
• Intelligent design

26. First & Fast
• Reduce production cost
• The specialized packs cost more to produce than the kits
were sold for.
• More alternative for customers
• Rise brand awareness
• Efficient express

27. First & Fast
• Express delivery
• FedEX
• Can it be faster?
• What’s in the cargo?

28. First & Fast
• 3D printing
• In 2007, 3d printing machines’ price generally ranging
in $2000
• In 2010, the price decreased to $1000, some even
around $500
• Thousands people have bought 3d printing machines.

29. First & Fast
• Customers design the model
• Customers purchase the pack
• FedEX start delivery
• Print the bricks in the track
• Delivery in 30 mins
• Take virus video
• Upload to Youtube, Facebook, etc

30. T H A N K S