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Write a 1 page paper on case summary. Case Summary Q1. In evaluating its products lines and business operations, LEGO should ensure that the productlines and business operations fulfill the following
Write a 1 page paper on case summary. Case Summary Q1. In evaluating its products lines and business operations, LEGO should ensure that the productlines and business operations fulfill the following criteria: strategic fit, financial viability, competitive advantage and partner viability.
Q2.
The changes in the marketplace mean that the future of the toy industry will undoubtedly change the way in which companies operate. The reduction in competition barriers in the industry is likely to heighten competition level because of easy market entry for new companies. However, acquisition by major firms is likely to lower the threat posed by smaller emerging companies.
Q3.
Despite its success in early periods of operation, LEGO faced some internal issues which jeopardized its competitiveness in the market. Between 1998 and 2004, the company registered massive revenue loss linked to inefficient manufacturing and distribution systems of the company. The management ignored production costs, which led to high volume of wastes. The company has developed a complex operation mechanism, courtesy of its many operating years. This only meant an increase in operation costs associated with its supply chain and production sections.
Q4.
There are a multiple issues facing LEGO, which need strategic planning in order to overcome. First, the company faces stiff competition from other companies entering the building toy industry. Some companies even manufactured plastic bricks products attuned to LEGO’s products. The situation worsened in 1988 when the company’s plastic design patent expired, reducing competition barrier in the industry. Second, acquisitions, for example Disney acquired Marvel Entertainment increasing the pressure of competition on LEGO. Third, legal battles also threatened the company’s efficiency. Court fights with other companies such as MEGA Brands over trademark registration resulted into massive loss for the company.
