Case Study Analysis of Lego: Innovation Strategies and Competitive Advantage

This case study analysis explores the innovation strategies of Lego and how it has led to creative destruction. It also discusses the convergence innovation used by the organization to provide its products and services. The analysis includes a competitor analysis and justification of the use of Design Thinking in the organization's success.

Case Study Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Does the organisation operate in a blue ocean or red ocean? Justify your answer with a
competitor analysis......................................................................................................................3
Identify and discuss how the organisation's innovation has led to creative destruction.............4
Discuss and describe the convergence innovation that has been used by organisation to enable
it to provide the products or services it sells...............................................................................5
Has the organisation used Design Thinking as part of their success with justification..............5
CONCLUSION................................................................................................................................6
REFERENCES:...............................................................................................................................7
Books and Journals.....................................................................................................................7

INTRODUCTION
Innovation refers to the continuous process of modification and changing product and
services, business process in creative manner in order to cope up the recent trends in market.
Innovation helps an organisation to make their product and services different in order to gain
competitive advantage (Beijers, 2018). For this project the selected case study is Lego which is a
toy manufacturing company located in Denmark.
This project covers the organisation strategies with competitors analysis as well as
organisation's innovation that has led to creative destruction. Further, it cover the convergence
innovation which is used by selected organisation addition to how Design Thinking is used by
them with justification.
MAIN BODY
Does the organisation operate in a blue ocean or red ocean? Justify your answer with a
competitor analysis
The selected organisation is Lego which is a toy manufacturing company as well as it
produced variety of block toys or bricks sets for the kids in order to increase their experience and
skills. It also produce various amusement parks for children in many countries addition to it is a
leading company in the toy manufacturing industry. Blue ocean strategy refers to a plan of
action in which company make their product different and launch new product and services in
new market at low cost as per recent customer trends to gain leading market position. The
company use blue ocean strategy to explore their business operation and product portfolio in new
sector in order to meet new demands of customers (Innovation at the Lego Group (A) Blue
Ocean Strategy, 2022). As they make amusement parks or digital video games series in order to
expand their business in digital world.
For the justification with competitive analysis, the selected framework is Porter's Five forces
analysis which helps company to determine the competition and market trends in their industry
that are as follow-
Competitive rivalry- This factor has high impact in toy industry due to various
competitors make innovative toys to acquire huge market share. This factor has high impact on

Lego but the new digital innovation helps them to gain competitive advantage and increase the
sales of their games or toys.
Buyers power- This Factor has high impact in toy industry due to change in technology,
innovation and preferences of kids which enable them to switch easily from one product to
another. This factor has also low impact on Lego as they make new innovation as launch digital
series of games at low cost which attract large number of kids (Ganda, 2019).
Suppliers power- In toy industry, this factor has low impact due to large number of
suppliers available which supply inputs at low cost. In Lego, this factor has less impact on their
manufacturing process as they have huge contract with large number of suppliers in order to get
inputs at low cost.
Threat from new entrants– In toy industry, it factor has high impact for new company
due to huge investment and innovation required. For Lego it has less impact as they launch
innovative toys in market and operate their business at large scale as well as have good brand
value.
Threat from substitutes- This factor has high impact in toy industry as they new
innovation easily cut down the customer base and drive attention of users easily. For Lego this
factor has less impact as they are first who launch digital series of games and drive attention of
kids to buy their toys which proved as competitive advantage (Ghura & Kumar, 2020).
Identify and discuss how the organisation's innovation has led to creative destruction
Lego use blue ocean strategy by launching new product Studio Spielberg MovieMaker
Set which is all in one studio which makes static animation that is new in toy industry which
allow children to formulate movies as per their innovative imaginations. This strategies proved
as profitable for company and increase their sales which enable them to gain competitive
advantage (Iruthayasamy, 2021). Also they make online and digital video games for kids in order
to expand their business in digital world. The biggest innovation of Lego is they manufacture
robotics brick kits which generate creativity among kits to play and add in their toy collections.
As new digital process of manufacturing brick games, robotics kits has led to creative destruction
in which kids play online games. They bring new innovation by launching digital business like

Lego mind storms, movies, applications, video games linked with their block toys which are
appealing to kids who has interest in online games (Johne, 2018).
Discuss and describe the convergence innovation that has been used by organisation to enable it
to provide the products or services it sells
Convergence innovation includes sum of technical, digital, social, human creativity in
order to bring new product and services in the market to increase sell or market share. As Lego
use convergence innovation by unique blend of their capital, digital technology, human creativity
and social information to increase their revenue or sales (Namboodiri, Banerjee & Dasgupta,
2019). The company mix external and internal brainpower to bring innovation like they use ideas
and suggestion come from competitors, customers and suppliers. As well as they also allow their
employees to give innovative ideas in order to add more features in their product and launch new
product in market. By this various innovation which can be done by Lego is Artificial
intelligence, Robotics, Information of technology in their online brick games or series. The
company use these technology and ideas of their team as a convergence innovation to develop a
game series in order to meet the demands of kids. As they offers those type of games which
allow kids to make game as per their interest instead of ready made game which increase their
skills or engaged them for hours.
Has the organisation used Design Thinking as part of their success with justification
The company use Design Thinking in their product and services in order to achieve
success as they develop a game which is Lego Serious Play. As it is a tool which is used to
support methodology of Design Thinking (Neto, Amaral & Ghinea, 2022). This tool is designed
to invest knowledge of internal factors such as employees, management and other who works in
order to get variety of opinions and ideas. As many employees who are interested to develop
innovation are invited to develop as well as share their viewpoints or ideas by using metaphor.
As it helps them to generate new games, innovation for their digital business which other firms
are unable to develop that leads to aid them to gain competitive advantage in toy industry (Xuan
& Changqi, 2021). As they always encourage their employees by providing them training so they
adopt advance technology as develop new games as per preferences of kids. Such as they used

Robotics, AI and other technology to develop new series of bricks which drive attention of kids
towards their game to increase customer base.
CONCLUSION
It is concluded from the above information that it is essential for a firm to bring
innovation frequently in order to gain competitive advantages to increase their brand value or
customer base. By using various strategy like Blue ocean strategy they can make their product
different and expand their business in new market. Such as by using convergence innovation
they can use all the resources and design thinking effectively to attract large number of
customers for their new product to increase sales.

REFERENCES:
Books and Journals
Beijers, R. (2018). Development of a knowledge sharing game to design collaborations in a
hierarchical organisation: How innovation strategies can be implemented at the working
floor throughout organisations.
Ganda, F. (2019). The impact of innovation and technology investments on carbon emissions in
selected organisation for economic Co-operation and development countries. Journal of
cleaner production. 217. 469-483.
Ghura, A. S., & Kumar, I. (2020). Shradhanjali. com: creating Blue Ocean. Emerald Emerging
Markets Case Studies. 10(2). 1-16.
Iruthayasamy, L. (2021). Blue Ocean Versus Red Ocean. In Understanding Business
Strategy (pp. 93-114). Springer, Singapore.
Johne, F. A. (2018). Industrial product innovation: organisation and management. Routledge.
Namboodiri, S., Banerjee, S., & Dasgupta, H. (2019). A coherent metasynthesis of blue ocean
strategy (bos) using grounded theory approach. Academy of Strategic Management
Journal. 18(4). 1-18.
Neto, B. M., Amaral, I., & Ghinea, G. (Eds.). (2022). Digital Convergence in Contemporary
Newsrooms: Media Innovation, Content Adaptation, Digital Transformation, and Cyber
Journalism (Vol. 370). Springer Nature.
Xuan, Z., & Changqi, T. (2021). Research on the driving effect of technological convergence
innovation on the high level of industrial structure: based on the perspective of vertical
knowledge spillovers. Management Review. 33(7). 130.
Online
Innovation at the Lego Group (A) Blue Ocean Strategy, 2022. [Online]. Available through:
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