The evaluating legos decision to partner

Running head: EVALUATING LEGO’S DECISION TO PARTNER WITH TENCENT IN
CHINA
EVALUATING LEGO’S DECISION TO PARTNER WITH TENCENT IN CHINA
Name of the Student
Name of the University
Author Note

EVALUATING LEGO’S DECISION TO PARTNER WITH TENCENT IN CHINA1
Executive Summary
The purpose of this paper is to assess the decision of Lego in partnering with the
multinational organization, Tencent of China. The paper evaluated and analysed the rationale
behind arriving at the partnership decision. The paper assessed the rationale behind entering
into the Chinese market with partnership and deduced that it was a significant and strategic
move by the company as Tencent could have been the indirect major competitor for Lego,
Tencent offers the secure and well established online platform and a wide reach to Lego,
which is a positive contribution in the declining profit of the Lego Group. However, the
potential challenges due to the partnership can be the security and safety concern of the
content games, the increasing global competition and the unique positioning by Tencent in
China. The proposed recommendations for a long-term relationship amongst the partners can
be, the focus on security, user needs, attributes and community involvement.

EVALUATING LEGO’S DECISION TO PARTNER WITH TENCENT IN CHINA2
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Challenges faced by Lego:.....................................................................................................4
Rationale behind strategizing partnership:.............................................................................5
Outcome of the decision:.......................................................................................................6
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................8

EVALUATING LEGO’S DECISION TO PARTNER WITH TENCENT IN CHINA3
List of Figure
Fig.1: Lego’s financial status from 2002 to 2017 (reflecting revenue and profit drop from
2016 to 2017...............................................................................................................................6
Fig. 2: Annual profit of Lego with its competitors:...................................................................8