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Cb3 Lego Case Study-Raye Danny Abdu Riki
Lego faces three main threats to its business: losing licensing rights from Disney, losing its brick trademark, and increased competition from Hasbro. To address these threats, Lego should negotiate with Disney to retain licensing rights, pursue new licensing deals with properties like DC comics, expand into emerging markets like China and India, broaden its customer base, and invest in new product innovations like high-tech bricks. In the long term, Lego needs to implement strategies to maintain its leading position in the brick toy market and continue growing its profits.
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Cb3 Lego Case Study-Raye Danny Abdu Riki
- 1. Raye Danny AbdullahRiki WINNING IN THE NEW ERA
- 2. The New EmergingChallenges Recommendations Analysis of Lego Proposals to immediate actions Proposals to the long-term expansion Conclusion CONTENT
- 3. The Acquisition ofMarvel 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 torespond 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 strategicposition 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 beenachieved with strong profitability Assess past performance •Profit margins(Net profit) • Key expense ratios • Return on equity Profitability C,F&K
- 7. Lego have achance 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 Theorganization is healthy based on strong problem solving ability
- 9. Wood toy Plastic toy Brick toy Assesspast 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 OperatingPerformance - + +- 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 hardto 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 havea 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
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- 19. Exploding Markets • Expandto 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
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- 21. Customer • Lego’s mission ...toinspire and develop children to think creatively… • Target market • Children Adult • Family • Artist
- 22. Customer • Enhance customerrelationship • 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 techbrick • 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 AN K S