Rea Project: Lego Group

REA Project: LEGO Group

Background

The LEGO Group, a family operating toy manufacturing company, was established by Ole Kirk Christiansen in 1932. With a long history almost one century, the enterprise expanded from a small carpenter’s workshop in Billund, Denmark to the world’s third largest toy manufacturer in more than 130 countries. The name of “LEGO” was derived from the Danish word “leg godt”, meaning “play well”. It reflects the mission and vision statement of the LEGO Group that inspires children to learn as well as develop through playing. Children should be able to think creatively and fulfill their potential to shape their future life. The company aims at helping the youngsters to develop new ways of playing. It is not only concentrate on the products themselves, but also emphasis on realizing the human possibility.

Targeting at the young, the company invents and develops new ideas into its products. The LEGO Group set up the production solely based on wooden toys in the early years. Afterwards, the company expanded its business of producing plastic bricks. The LEGO brick is one of the significant innovative products since the interlocking principle with its tubes provides children unlimited building possibilities by using their imagination. Several decades later, the products built in LEGO Group focus on a story or theme. In the 1990’s, LEGO Group became one of the world’s leading toy companies due to its several initiatives, such as the LEGO.com website, the use of robot technology in the LEGO MINDSTORMS® products. Today, LEGO Ambassador Network, LEGO Certified Professionals and LEGOLAND park serve as community social network to provide customers the opportunities for communication platform worldwide.

The LEGO Group has responsibility agenda in daily operation. First, the company plays a vital role in providing children with exciting LEGO experiences that develop the creative thinking and analytical thinking that they need to create a bright life. Apart from, in older to promise the healthy and safe play experience, the LEGO Group monitors the whole production through materials selection, design and development, especially for chemistry risk control. Besides taking the responsibilities for the customers, the LEGO Group also sets goal to achieve positive environmental impact on reducing carbon emissions and using materials reasonable.  

Company Operation

Because LEGO is the company having enormous businesses around the world, to indicate all of its business processes is difficult. Therefore, in this report, we only choose its manufacturing process and the physical stores’ retailing process to show how this company is operated.

To keep its competition status, LEGO takes the innovation as its core strategy. The concept and product development takes place mainly at its Billund headquarters in Denmark. The designing team is made up of more than 180 designers, who represent 24 nationalities. After the designing, the company purchases the raw materials, some of its semi-finished or finished goods from over 80 suppliers, who have long cooperation relationships with LEGO. This will ensure the high quality and safety of these supplied resources. Those materials are usually the plastic granules, composed of acrylonitrile butadiene styrene (ABS). Then, using the purchased materials, the basic elements of LEGO, which are bricks and mini-fingers, are produced and accessed in the Group’s won factories in Denmark, Hungary, Czech Republic and Mexico. Next, the finished goods are delivered to its own specialized retail stores. These stores offer the exclusive products, activities, and exhibits to retain their large fan base and attract more future customers. Eventually, the company to increase the production capacity and extending larger markets uses the profits earned by its operation.