Business Level Strategy / Generic Strategies

Running head: BUSINESS LEVEL STRATEGY / GENERIC STRATEGIES
Business level Strategy / Generic Strategies
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Author Note

1BUSINESS LEVEL STRATEGY / GENERIC STRATEGIES
Introduction
This research report is an in-depth analysis of market and products development strategies of
the organization Lego which is a manufacturer of household items such as ironing boards,
stepladders, clothes hangers, stools and wooden toys. The major purpose of the report is to
perform a market analysis of Lego such as potential market opportunities and strategic
options both in domestic and international market. In general, it is identified that the
household products sector is usually composed of a diverse group of firms; thereby, the
market has been competitive due to pressure of innovation and changing customer demands.
The analysis starts with providing a comprehensible discussion on the available market
opportunities to Lego.
Question 1:
It has been identified that due to globalization and technology evolution, market
conditions globally have been dynamics in nature, because trends are rapidly changing with
innovation and so are customers’ tastes and preference. Thus, market sustainability of a
particular product is doubtful unless it has a product extension plan (Al-Azzam, 2014).
Particularly, in European market due to increasing disposable income causing by double
household earning, consumers are more favourable towards innovative household items
which reduce their effort in arranging household items. Thus, organization has the options to
approach consumers with different varieties of the same products by applying innovation
(Zeschky, Winterhalter & Gassmann, 2014). This certainly, the brand Lego has to go with
innovation and according to Ansoff matrix strategy, Lego needs to focus on developing or
extending the product by manufacturing different variants or developing related household
products. For example, it can develop its existing clothe hanger product by upgrading it to
electric hanger. This means the modified product would be electrical and consumers do not

2BUSINESS LEVEL STRATEGY / GENERIC STRATEGIES
have to manually arrange the hangers when using it; consumers can shift and move by a
remote.
Question 2:
It is certain that developing or turning the cloth-hanger into an electrical one could
require a high manufacturing cost (Birkinshaw, 2016). Moreover, placing and distributing the
product both in global and domestic market is another existing variables of cost. Thus, to
avoid this financial risk, Lego has to come under a joint venturing initiative in which the
brand has to tie up with another similar brand such as IKEA. This means such large brand has
the capacity to design cupboard and dressing table but adding a cloth hanger is a new idea to
them. So, the brand has to amalgamate its hanger item with electrical circuit already installed
in the cupboard item designed by the ventured firm. This will help to reduce cost of
manufacturing and distribution; so every single purchase of cupboard is also the purchase of
electrical cloth-hanger item. Here, Lego can gain competitive advantage of reducing its
manufacturing, promotional and distribution cost because the large ventured firm has its own
promotional efforts. Hence, Lego remains as a supplier to the ventured brand but it can earn
its brand reputation through the ventured organization.
Question 3:
In order to implement the partnership and tie-ups with the company, the organisation has to
develop in house technologies and development strategies that provide with suitable self-
invented technologies that would develop the growth of the company. In order to implement
these modifications the company has to grow with time and invest in designing and technical
development with a dedicated team to boost the product effectiveness and demand. The major
implementation would be a dedicated team towards development of products that are
technically efficient and competitive at the market and satisfies consumers with their service.