MKT5301UnitIIICaseStudy

docx

School

Columbia Southern University *

*We aren’t endorsed by this school

Course

MKT 5301

Subject

Marketing

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by CoachPolarBearPerson910

1 LEGO Analysis Columbia Southern University Mkt 5301 Advanced Marketing Dr. Johnson September 26, 2023 LEGO Analysis

2 Almost everyone in the world has heard of LEGO. Legos are the colorful building bricks that allowed us to create things as kids that were only limited by our imaginations. This essay is an analysis of the world of LEGO. It will go into detail on how LEGO manages to continually innovate its company. The contribution of marketing research to LEGO's commercial success will be discussed. It will go into detail into how LEGO differs from its rivals and whether or not its competitive advantage is long-lasting. It will examine any possible moral ramifications with LEGO. Through the creation of a PEST analysis, the external environment will be discussed. After that, a SWOT analysis will be used to discuss both the internal and external environments. Finally, it will identify at least one organizational issue that LEGO is currently experiencing or one that you anticipate it will experience in the future, gather three to four marketing-related potential solutions to the aforementioned issue, and choose one or more of them to solve the problem. Part 1 Reinvention. By fusing marketing research, innovation, and tactical alliances, LEGO has been able to perpetually reinvent its industry. The company has made getting to know its customers and comprehending their requirements and goals a priority. Because of this study, LEGO has been able to create new products that satisfy client needs and preferences. For instance, in order to develop cutting-edge products, LEGO established a highly classified study and development team (Kotler et al., 2022). The company has also entered new markets, such as video games and theme parks, to stay current and attract new customers. In order to broaden its appeal, LEGO has also teamed up with organizations like Universal Studios and Nintendo. Marketing research.

3 The company has used marketing research to pinpoint customer desires and goals and create new goods and services to meet those demands. CEO Knudstorp thought that LEGO needed to thoroughly comprehend every customer's demands and behaviors in order to rekindle their emotional commitment to LEGO products. In an effort to raise brand awareness among females, the company launched the LEGO Friends line in 2011. Boys cherished kits with fascinating histories and backstories, like the Ninjago and Legends of Chima sets, according to the company's market study, whilst girls preferred to use their LEGO sets for simulation (Kotler et al., 2022). Both boys and girls were drawn to LEGOs because of its construction aspect. LEGO has used market research to better understand adult consumers' interests and create products for them, such the LEGO Architecture series. Differentiation and sustainability. To start, LEGO is dedicated to innovation and staying in touch with its customers. Products are created using customer feedback to satisfy their preferences and demands. LEGO has diversified into new markets including video games, amusement parks, and movies in order to stay current and attract new customers. In addition, LEGO has partnered with companies like Universal Studios and Nintendo to increase the range of its products. Yes, LEGO has an enduring advantage over its rivals. The company prioritizes innovation and maintaining a tight relationship with its customers, which enables it to stay one step ahead of the competition. In order to access their resources and expand into new areas, LEGO has forged strategic agreements with other businesses. The company is also committed to sustainability and moral behavior, which helps it preserve its competitive advantage.. Ethics.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

4 Since the company is dedicated to upholding high ethical standards, it has implemented a number of precautions to that end. The business has put in place a responsible sourcing policy, which states that it only purchases from vendors that meet its ethical standards. When producing their goods, they make an effort to utilize less energy and use recyclable materials (The LEGO Group, 2020). In order for none of its suppliers to engage in it, it has also established a policy to outlaw child labor. Last but not least, the company is committed to diversity and has taken steps to create a diverse and inclusive workforce. The corporation has received praise for its initiatives to advance inclusiveness and diversity, and its products and marketing initiatives celebrate and embrace the diversity of all cultures (The LEGO Group, 2020). Part 2 Situational Analysis PEST analysis Political LEGO is expected to follow all applicable labor, safety, and intellectual property laws in the numerous nations where it conducts business. In North America and Europe, the toy industry was regulated by the government, and all products had to comply with the proper documentation and safety standards. Lego determined in 2016 that it would not ask about any customer's bulk purchases as long as the consumers agreed to not use Lego in any political work (Research and Markets Releases Report: Smart Toys Market, 2022). Economic Due to the fact that every country has its own rules and regulations, Lego is susceptible to changes in currency. The management of LEGO is in charge of modifying product supply and demand to take the status of the market into account. The popularity of LEGO items has resulted

5 in yearly increase of more than 10%. The cost of new country-specific characters, the variety of new molds required for manufacturing the components, the number of components, a nation's population, its annual income, exchange rates, and taxation are just a few of the variables that affect the cost of Lego sets (Research and Markets Releases Report: Smart Toys Market, 2022). Lego is helpless to stop foreign retailers from boosting the prices of its goods. Sociocultural Despite the rise of digital entertainment, Lego continues to be popular. It actively uses social media platforms to promote the idea of team development. In order to protect children's rights worldwide, Lego and UNICEF teamed in 2015 for three years. Lego strongly values diversity and the elimination of bias against people because of their ethnicity, gender, sexual orientation, or culture. However, LEGO's repetitious toy sets and little figurines have also drawn criticism (Research and Markets Releases Report: Smart Toys Market, 2022). Technology Lego has put a lot of effort into understanding the technological context in which it operates. For example, the company has created a variety of products that use cutting-edge technology, such as products based on robots. Research initiatives on the impact of toys on children's development have been supported by Lego. During the Covid-19 epidemic, Lego prioritized expanding its online presence, and it is currently formulating a 10-year plan to accomplish so. They also provide a wide range of cutting-edge, interactive toys that aid children in developing their STEM abilities, such the Lego Life app, that currently has in excess of nine million users. SWOT analysis SWOT Analysis Chart Strengths Weaknesses

6  New products  Strategic partnerships  E-commerce  LEGO community  Eco-friendly practices  High price  Counterfeits  Unsuccessful games  Low-funded R&D Opportunities  Market expansion  Subscription model  Personalized sets  Virtual reality  CSR program Threats  High competition  Environmental concerns  Technology Strengths With locations in more than 130 countries and close to 900 official stores, LEGO is well- known all over the world. LEGO often introduces new products in order to stay relevant and up to date with customer trends. Numerous well-known and pop-culture-related properties, including Star Wars, Marvel, and The Lord of the Rings, have strategic collaborations with LEGO (Lego AS, 2018). With one-third of all sales occurring on online stores, LEGO has a strong online presence. The company has a reputable and established global community that has assisted in giving it a strong foundation in many areas. By 2025, all of LEGO's goods will be made entirely of renewable resources, according to the company's announcement. Weaknesses In the toy industry, LEGO is regarded as a high-end and pricey product line. The market is overrun by knockoff LEGO products, especially those coming from China. Given that Bandai Namco and other rivals have longer and more varied product lines than LEGO, they have had difficulty capturing the video game market. Due to the severe lack of funding for research and development at LEGO, the company has not introduced many new product lines in recent years (Lego AS, 2018). Opportunities

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

7 Market expansion potential exist for LEGO, particularly in the Asian and European markets. In a subscription model, LEGO might offer some sort of Loot Crate or experimental bricks to clients (Lego AS, 2018). The market for unique sets is expanding. LEGO might release dynamic LEGO sets that allow users to create their own personal universes or sets with original narratives. With the popularity of virtual reality, LEGO has the chance to develop a metaverse where users can build their own universe and communicate with others. Corporate social responsibility initiatives can increase positive word-of-mouth and draw in new clients. Existing LEGO programs encourage schooling in rural areas and learning using LEGO bricks (Lego AS, 2018). Threats The toy market is expanding quickly, and Hasbro and Mattel are competitors of LEGO. The market is increasingly competitive because new products are introduced annually. Companies like LEGO, whose main products are made of plastic, are put in danger as nations around the world work to reduce plastic pollution. Traditional toys are no longer as popular with target consumers as electronic goods. Additionally, there aren't enough patents or other IP protection measures, which might lead to an increase in counterfeit goods, hurting firms' reputations and financial success (Lego AS, 2018). Problems Lack of variation in its playsets and miniature figurines may be a problem for LEGO at the moment (Reich et al., 2018). This can make it less appealing to some market segments and cause reaction from the general public. The popularity of digital entertainment has resulted in a decline in the desire for traditional toys. Sales of LEGO have decreased as a result of this. It could be difficult to remain relevant in the digital age if you don't have the proper tools or

8 knowledge. They may be losing clients for their physical products because they are unable to compete with their internet competition. Alternative solutions The first alternative is for Lego to put more effort into creating fresh ideas and staying in contact with its clients. They are able to produce and provide a larger selection of toy sets and miniature figures By doing this, LEGO might appeal to a wider market and build a better reputation. Collaborating with groups that promote inclusiveness and diversity is an additional option. The second possibility is for LEGO to establish ties with both parents and kids. This might help the business provide things for each group while also fostering relationships and customer loyalty. The bulk of companies are market leaders in digitalization and products created especially for video games, so they are knowledgeable about the industry and adept at adapting strategies as circumstances change. This could aid Lego in maintaining its production of interactive software, video games, and other goods. Lego must spend money on innovation and hire industry experts if it wants to evolve into a greater digital entity. Lego must use less expensive resources to produce its goods so that its customers globally may afford them. This will stop their competitors from selling cheaper goods and have a negative impact on sales in many countries. Lego may decide to digitize the company by producing toys with less expensive materials while keeping high quality. Recommendation To address the problem of an absence of variety among its line of toys and figurines, the first item of advice is for LEGO to produce and market more diverse play sets and tiny figures. LEGO will actively tackle the issue of product diversity by producing and distributing a wider

9 range of playsets and miniature figurines. This concept satisfies the market's demand for toy sets and characters that are more compact and varied. If LEGO wants to assist with the execution of this idea, they could think about working with organizations that advocate diversity and inclusion as well as communicating with varied groups and influencers to learn about their needs and preferences. LEGO could make its manufacturing process more evident to attract customers and show its willingness to promote diversity and inclusion. If Lego wants to be successful in automating its products, it must make prudent technological investments and establish specialized parent and adolescent market research groups. Lego's business is at risk and could be negatively impacted in the not-too-distant future if it does not become a greater participant in the digital transition because digitization and advances in technology are the directions our society is headed in. Due to the success of the popular Lego block, the transition to digitization is a significant and time-consuming process. Lego runs the risk of losing out on numerous prospects and becoming into a legacy platform if it doesn't make a big investment in software development (Gurcaylilar-Yenidogan & Gul, 2021). Conclusion In conclusion, LEGO is a fantastic company with a fantastic product that enjoys a lot of fervent followers among its patrons. Even though their product has stood the test of time and imitation rivals, they are struggling to stay competitive. Developing connections with certain market research organizations could help Lego reach new heights and increase the appeal of all of its goods to the same degree as the block (Gurcaylilar-Yenidogan & Gul, 2021). Lego is aware of the conditions necessary for successful digitalization, thus assembling a staff with this software experience could provide them an edge. The well-known brick toy could be made with inferior materials, which would damage Lego's reputation.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

10 References Gurcaylilar-Yenidogan, T., & Gul, S. (2021). Digital transformation strategy: The LEGO case. Journal of Organisational Studies & Innovation , 8 (3), 36–55. https://doi- org.libraryresources.columbiasouthern.edu/10.51659/josi.20.139 Kotler, P., Keller, K. L., & Chernev, A. (2022). Marketing management (16th ed.). Pearson. https://online.vitalsource.com/#/books/9780135887035 Lego AS. (2018). Strategic SWOT analysis review . London: GlobalData plc. https://www.proquest.com/docview/2214951063? parentSessionId=vPIENnrQ82gk6IxoQMJcQkMV1zrlC6xBFCEtt5x4Lzk %3D&accountid=33337 Reich, S. M., Black, R. W., & Foliaki, T. (2018). Constructing difference: Lego® set narratives promote stereotypic gender roles and play. Sex Roles , 79 (5–6), 285–298. https://doi- org.libraryresources.columbiasouthern.edu/10.1007/s11199-017-0868-2 Research and markets releases report: Smart toys market. (2022, March 14). Professional Services Close-Up , NA. https://link-gale-com.libraryresources.columbiasouthern.edu/apps/doc/A696644209/ GBIB?u=oran95108&sid=bookmark-GBIB&xid=00903acc The LEGO Group. (2020). Annual report . https://www.annualreports.com/HostedData/AnnualReportArchive/l/lego_2020.pdf

MKT5301UnitIIICaseStudy

Related Documents