Business Challenges faced by LEGO | Report

Added on - 16 Sep 2019

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STRATEGIC GOALS – LEGOLEG*O –Environmental Analysis of the IssuesWord Count - 1966Reference Style – APA references1
STRATEGIC GOALS – LEGOContentsIntroduction................................................................................................................................2Environmental analysis..............................................................................................................2Porters five force........................................................................................................................3Conclusion..................................................................................................................................6References..................................................................................................................................72
STRATEGIC GOALS – LEGOIntroductionLEGO, a privately owned company specialises in the manufacture of different typesof play materials. At present, the management has operations in European parts, Australia,Asia, and the US. The headquarters of the company is in Denmark and has employed morethan 12,582 employees. Despite of facing extensive challenges, the company could improvethe performances by 13% in the year 2014. The issues faced by LEGO includes following theright business strategies for launching new products for the children, by following the termsand conditions. This report examines the business challenges faced by LEGO in conductingthe business activities and improving the operations.Environmental analysis1.PESTLEPolitical-The company faced challenges in earning profit in the year 2000, but witheffective business strategies and innovative technology LEGO improved the performances.Political situations and strict rules and regulations followed in different countries is examinedand introduced by the management. For instance, the rules and policies in the US market formanufacturing and selling the toys had to be followed by LEGO groups. Product distributionmethod is done as per the political decisions made by the leaders of the nations, where theproducts are intended to be sold. The company is liable to pay taxes as there corporate lawsfollowed in different countries. Developing countries usually impose heavy tax amounts ascompared to the developed nations (Girard, 2013).Economic- As it was predicted by the IMF or the international monetary fund, theworld economy has grown up tremendously. The rate of development in the developingnations like China, India, and others has been more than the developed countries. Thisincrease has improved the wealth of the people, and encouraged the buyers to spend a3
STRATEGIC GOALS – LEGOconsiderable amount on the toy purchases. LEGO has been benefitted by this improvement inthe gross development and purchasing power of the people. However, the company is yet toimprove financially in EURO areas where the market is not fully recovered from therecession that was recorded in the year 2008-2009.Social -The demands and requirements of the children in the developing anddeveloped nations are changing. This has increased the demands for well-designed andinnovative toys that are different from the traditional ones. An increase in the womenemployees across the world has increased the standard of livings for the people.Technological -New products due to the technology adoption have improved theproduct value manufactured by LEGO. The company works on innovative strategies to caterthe requirements of the children of different age groups. This enabled the management toattract children who get attracted to the games viewed and played on internet. LEGO uses 3D technology for producing different types of games (Heathcote and Roux, 2012).Legal- The company policy for protecting the patent rights is quite strict. Legalaspects such as getting the licenses and franchising for the business conduct are closelyexamined and followed by the management. The rules and its relevant changes are examinedby the management on a timely manner, as it helps in smooth conduct of the businessoperations in different places.Environmental- LEGO followed the strategies for corporate social responsibilitiesmeant to protect the rights of the community and the environment. The policies adopted byLEGO are unbeatable as it works on the renewable energy and protection of the environment.Company policies towards the work safety is closely analysed by the management andappropriate measures are introduced for protecting the environment (Tuli et al., 2007).4
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