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LEGO Case Study
12/12/2015
Karen Thorson
LEGO began from humble beginnings as wooden blocks in the shape of a brick to large $61
billion dollar company with 3,560 different shaped pieces. By 1992, it was in the top 10 of global
toy manufacturers and accounted for about 80% of the construction toy market. With the toy
market changing due to technology becoming more prevalent in toys, LEGO suffered to keep up.
LEGO was bleeding profits with loses in 2003 and 2004 of 935M DKK and 1.9B DKK,
respectively. LEGO needed to find a solution on how to compete in the toy world and stay
profitable or it would be bankrupt.
How can LEGO revitalize its brand to compete with the surge of technology toys and appeal to
the attention-waning children of the world while streamline costs to become a profitable
company it once was?
Critical Issues
• LEGO owns the manufacturing of their product. Competitors such as Hasbro were
utilizing outsourced manufacturing to reduce the cost of their manufacturing (Exhibit 1
and Exhibit 2)
• In 2004, LEGO had 3,560 different shapes, 157 colors and 10,900 elements. This
amount doubled since 1993. The amount of different shapes caused for a complex supply
chain due to the amount of unique parts that were required to make one LEGO set.
(Exhibit 2)
