Lego Group

Lego group faced a lot of challenges on their strategy development mainly due to the external environment and the culture of the consumers.

Adapting to the environment changes has been, and still is one of the most difficult and unpredictable aspect of strategy development. One of the features of the external environment that influenced strategy development was the public, that was reluctant to accept the change from the traditional wooden toys to the new plastic bricks. Something that changed to their strategy to overcome this issue was that they started producing bricks supplemented with figures and technical features such as small engines that extended the playing opportunities. They started producing products that would overcome the barrier of traditional thinking , such as lego castles, lego space and lego cowboys.

Another external factor was the constant culture change that they should follow, and align with children playing habits and interests. This changed their strategy in their product development and focused on producing legos based on themes such as new movies (Star Wars, Lego City etc).

An important external factor was that the use of legos had higher appeal to boys than girls and the response to this was producing lego friends which had huge success as the sales increased and the demand was above capacity.

Another external factor was the crisis which forced them to focus on their capital structure. They divested their LEGOLAND parks which reduced their depth and helped them finance their own activities. All these resulted in the rebirth of the traditional business and in a strong financial position in a crisis environment.