Lego Group Case Study

The LEGO Group

LEGO is a privately held company started by Ole Kirk Kristiansen in Denmark in 1932. The company started off by making wooden block toys and eventually switched to making plastic toys. LEGO is famous for their plastic building bricks that easily lock together and can be interchanged from set to set. Over the years LEGO has greatly expanded not only their products but also their entire company globally. They are known for their unique and strong branding and for being high-quality toys meant to inspire children and grow their skill set and creativity.

LEGO has quite a few strengths on its hands. For starters, one of their largest assets seems to be their strong global presence and branding. Kids in many parts of the world know what LEGOs are and play with them. Part of this is attributed to their focus on branding their products as educational and “to provide children with fun, engaging, and high-quality play experiences that develop their essential skills” (Lego.com). Because of this and how long Lego has been around, another strength they seem to have is being cross-generational. Many older people have fond memories of growing up playing with LEGOs; this, in turn, makes them more likely to buy them for their children. Over time Lego has been able to very successfully diversify their products beyond just blocks and toys. They have introduced TV shows, movies, video games and even theme parks. They’ve also been very successful at expanding specific product lines to include prevalent pop culture like Harry Potter, Batman, SpongeBob, Toy Story, etc. as well as other popular themes such as sports, different cities, Vikings, western, castle, space, and much more. Doing this successfully has been extremely important in keeping Lego on top.

Although Lego is good at what they do, one of their chief weaknesses is that other people are also good at it. Their products are easily imitated since their patent expired in 1988. Lego’s higher market price can also be a weakness for them as many buyers may choose a substitute product. While they have many diversified product lines, numerous of these are based on only the bricks and figures, which are actually not very diversified at all when compared to other physical toy products.

Since Lego has an impressive brand name they have the opportunity to acquire more licensing agreements. This could provide them with the chance to continue to add product lines as pop culture changes and new things become popular. For example using new movie and video game releases to make new products. While they already have a global presence in the world, there is always the opportunity to continue expanding in new and old places.

Unfortunately, LEGO faces numerous threats. More recently, Disney’s acquisition of Marvel Entertainment initiated key consequences for toy licensing agreements. Another large threat to LEGO