Posted: May 13th, 2015

The LEGO Group

TASK

You are to conduct an analysis of the case provided forThe Lego Group.Study the case thoroughly and identify the key issues confronting the organization. Follow the guidelines set out below as you assemble this information. Ensure you are familiar with the tools used in strategic analysis and understand them fully before writing the report.

 

 

Guidelines

• The report starts with the usual cover sheet and an Executive Summary– the Exec Summary is the last thing to be written in a report and summarises all the information contained in it.

 

• Table of Contents.

 

• Introduction – The introduction needs to be concise. Do not waste time and effort in explaining the obvious. Make your point, justify and substantiate it with evidence from the case and move on. The introduction must describe the business and provide context for your recommendations. You have toidentify the industry in which the organization participates, the key drivers of that industry and any other noteworthy factors relevant to answering the questions at the end of the case.

These questions cover the introduction, but are not limited to:

• What industry sector is it? (Describe and define it carefully).
• How large is this industry?
• Is it consolidated or fragmented?

 

 

The case study questions that must be answered are:

 

1. Geographical scope and market presence:

Taking the uncertainty in the global market into consideration, are the speed of growth and the balance of markets optimal?

1. Handing the growth:

Can the organisation cope with this growth? And how should it be strengthened?

1. Girls – pursuing the growth opportunity:

Apparently there is a large female market. How should this success be followed up?

4. Navigating in the competitive arena:

Bricks from both Mega brands and Hasbro are compatible with LEGO bricks. In addition, there are other players in the market as well as substitutes in the form of video games. Should this affect the strategic agenda of the LEGO Group?

To what extend should the company pursue its own agenda and/or respond to competitors’ initiatives?

1. Playing in the digital and new media age:

Why is it that the LEGO Group did not succeed with LEGO Universe?

Should the LEGO Group take any new major initiatives in this area or remain satisfied with its current development?

1. Education and play:

Imagine you are in Jorgen position and have to prepare the strategic agenda. What do you think about these issues?

What information would you need?

What resources can you get – how and when?

Who would you involve in the strategy process?

What tools would you use?

How much can you plan in advance and what type of activities need a more action – orientated approach?

 

 

 

 

• Strategic analysis – This section of your assignment should be a comprehensive analysis of the organization’s position in respect of its industry. Detailed analysis should be reflected in tables attached as appendices to your assignment. Pick out the most relevant facts from your analysis and discuss/justify and substantiate these in the text of your assignment.

 

• Requirements for the strategic analysis:

• Industry analysis:
• What are the key drivers in the industry?
• Where is the organization placed on the industry lifecycle curve?
• How dynamic is the industry?
• What position does the organization occupy in the industry’s market?
• Who are the big players that dominate this industry?
• What are the key issues arising at this time with respect to the case organization and the industry?
• Define and briefly describe key characteristics;
• Identify key players;
• Identify, explain and substantiate (provide evidence from your research) key drivers.
• Identify, explain and substantiate (provide evidence from your research) critical issues confronting the industry.
• What current measures are in place to address these? (Provide evidence from your research).
• Macro‐environmental analysis:
• Use PESTEL: Don’t explain or describe each factor, analyse the relevant once

Political: government regulations, government policy, taxation, import/export regulations and etc.

Economical: Market growth, interest rate, foreign trade provisions, balance of trade and etc.

Social: lifestyle changes, consumerism, market demands, fashion and etc.

Technological: nanotechnology, new materials, new processes, new innovations and etc.

Ecological: environmental attitudes, climate change, trends in land use and etc.

Legal: changes to statutory legislation, new restrictions, lifting or repealing of legislation and etc.

• Isolate key factors that could have an impact on FUTURE organizational performance in each dimension.
• THINK about the implications for the organization’s future performance and SUBSTANTIATE (provide evidence from your research) your findings.
• IDENTIFY potential opportunities and threats and SUBSTANTIATE (provide evidence from your research).

• Apply selectively: identify specific factors which impact on the industry, market and organisation in question.
• Identify factors which are important currently but also consider which will become more important in the next few years. THINK about the implications of the identified factors on the next 3-5 years
• Use data from authoritative sources to support the points and analyse trends using up – to – date information. Remember to reference.
• Identify OPPORTUNITIES AND THREATS – the main point of the exercise.

Key issues in each of the dimensions need to be highlighted and discussed in the report, particularly if they have a strong direct influence on the business at present or at some near future stage. You are going to need to look at your organization from a holistic perspective and understand how it operates in the context of the wider environment in order to do this analysis.

 

• Competitive analysis:
• DON’T EXPLAIN THE TOOLS, USE THEM TO ANALYSE THE COMPANY.
• Use Porter’s Five Forces. The Five Forces Framework Porter’s Five Forces Framework helps identify the attractiveness of an industry in terms of five competitive forces: • the threat of entry • the threat of substitutes • the bargaining power of buyers • the bargaining power of suppliers and • the extent of rivalry between competitors. The five forces constitute an industry’s ‘structure’

 

• Requires a ROBUST Industry analysis;
• Identify key players;
• What is Lego’s STRATEGIC position in the market? Explain and Substantiate (provide evidence from your research).
• Identify potential opportunities and threats from the competitive space and SUBSTANTIATE them (provide evidence from your research).

 

• Internal analysis:
• Use VRIO and Value Chain analysis to identify DISTINCTIVE COMPETENCIES (strengths) and weaknesses.
• Identify key strengths in the Value Chain that are SUSTAINABLE, explain and SUBSTANTIATE them.
• THINK about weaknesses and their impact on the organization, explain and JUSTIFY your reasoning.
• Summarise only those strengths and weaknesses that will have a STRATEGIC impact on the organization.
• SWOT analysis:The SWOT analysis is a summary instrument that highlights the opportunities and threats emanating from the previous three pieces of analysis.
• Summarise the opportunities and threats from your Industry, Macro‐environmental and Competitive analysis.
• Summarise the key strengths and weaknesses from your internal analysis.
• DISCUSS what strengths can be used to capitalise on opportunities, what weaknesses must be addressed immediately and THINK about how threats can be minimised.

 

• Discussion– This section of your assignment should deal directly with the key issues facing the organization and explore options the company can consider as strategic options. This requires the correct identification of the issues from the previous section and your own thinking about suitable alternatives that will enable the organization to formulate a strategic plan from the solutions you provide. You need to focus on these issues, examine them from a number of perspectivesand creatively think about possible solutions. The focus in marking the work here is whether or not you are applying strategic thinking to the problems facing the case organization and whether you can argue and substantiate the solutions you provide as recommendations.

 

 

 

• Conclusion and Recommendations– The final piece is to conclude your case with a summary of the key issues you have identified and the overall affect they will have on the organization if left unchecked. The recommendations you make must follow strategically from the previous discussion and offer a compelling argument for choosing a specific strategic option. Further, you might include contingencies, i.e.; alternative strategic options that can be followed if the primary solution partially or totally fails.

 

• Requirements for recommendations:
• What GENERIC STRATEGY should LEGO follow?

Explain your choice and SUBSTANTIATE IT.

• What competitive factors does LEGO possess that give it SUSTAINABLE COMPETITIVEADVANTAGE?   Explain andSUBSTANTIATE.

 

• References:

 

• DON’T use any reference in the conclusion.

 

• Use this book as a reference because the case study has been taken from it.

Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regner, P., (2014). Exploring Strategy: Texts and Cases.(10^th Ed.). Edinburgh Gate, Harlow, UK: Pearson Education Limited

 

• Use latest information and sources related to the LEGO Group

 

• Use the LEGO website to get some updated information plus 12 journal articles and 8 text book (include the above text book).

 

• Tables, Graphs and Diagrams:

Use a table or a graph or a diagram to add impact to the report, BUT you should note the following points. Each should have its own number and title. Proper labelling is expected and keys where appropriate. You should also refer to them in your discussion so that the reader knows when they are relevant and you should also explain what they mean. Titles for tables should appear above the table, whereas titles for figures appear below the figure. Where these have been sourced from other texts or articles they must be properly referenced.