Lego Case Study Essay

1007 Words Sep 29th, 2012 5 Pages
Lego case study

1. How did the information systems and the organization design changes implemented by Knudstorp align with the changes in business strategy?

Ever since LEGO started experiencing double digit annual sales growth, (by launching new toy games, branded theme parks, entering the video game sector, introducing mobile applications, introducing toys for girls, etc.) they realized they needed a model that was standardized, modular and scalable. Hence, allowing them to expand to new markets in a less amount of time. They already had a decently established market in USA and UK; they were looking for an expansion in other countries as well. This model had to tackle major issues like scalability challenges, employee
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Corporate strategy: By knowing exactly what the market demanded, LEGO started producing toys for the consumers it wasn’t producing toys (exclusively for) previously. In a corporate strategy, the organization does a study of the market demands and produces products accordingly. They also noticed the growing rage among youngsters for gaming consoles; hence, they entered the gaming market by releasing their own virtual games.

Ref: http://smallbusiness.chron.com/different-types-business-strategies-4634.html

http://www.smartdraw.com/Blog/archive/2009/11/30/three-kinds-of-business-strategy.aspx

3. Are the changes implemented by Knurdstop an indication of hyper competition? Defend your position.

I don’t think hyper competition was the sole reason was LEGO going under a severe loss. The only companies that were also doing well in the toy market were Mattel and Mega Blocks. I don’t consider Mattel is a competition to Lego as the toys that both of them manufactured are drastically different from each other. One produces building blocks and the other playing toys. However, Mega Blocks was posing a threat to LEGO by selling building blocks at a lower price. This was possible because the materials used to make building blocks by the competitor were not of as good a quality as LEGO. LEGO being a famous brand could not dare compromise with the quality of their toys. Thus,

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