Report on International Business of Lego
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Added on 2020-02-05
Report on International Business of Lego
Added on 2020-02-05
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Introduction to InternationalBusiness- Lego1
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INTRODUCTIONWith the continuous changing marketplace corporation now a days focuses on expandingtheir business activities across the national boundaries (Wysokinska and Witkowska, 2004).With the help of this, business organization ensure selling their products and services across theboundaries without any obstacles. Through conducting the transaction across the nationalboundaries will support the organization in setting higher profit margin as ell as gross sales thatwill enhance their position in the new market. The present report focuses on Lego one of theleading toy and games manufacturer company. The company has been operating successfully forover 80 years and despite a dominant international market share in construction toys, its growthhas not been without ups and downs. Report will also focuses on gaining insight knowledgeregarding the Asian market so that Lego may expand their business in the region. Furthermore, ithas also determined the key CSR challenges are is faced by Lego in expanding their activities inthe global market as well as recommendation for the same has also being provided. 1. THE ASIAN MARKETa) Three factors to explain why Asia is attractive and strategically important region for Lego'sfutureWith the increasing competition and growing pace of international business Lego one ofthe leading toy and games construction company focuses on expanding their activities in theAsian market as there are various factor that explains Asian market is attractive and strategicallyimportant region for Lego future (Kaufman and et.al., 2011). The company is emphasizing onconquering the Chinese market as because of three factors that are as follows-Market size- The key factor that explains Asia market is attractive and important regionfor Lego as the market size is very large as compare to the another region or markets(Strategies That Fit Emerging Markets, 2016). Although it has been stated that China isamong the second largest country within the Asia continent thus, expanding business inChinese market is feasible option for Lego. Growth rate- Another factor that justify attractiveness of Asian market is their growthrate. The economy of Asian countries are effective as compare to the other countries inthe world. 3
Capital availability- Another factor is capital availability, Asian market is strategicallyimportant for Lego future (Daniels, Radebourgh and Sullivan, 2011). As, the marketpossess high capital availability that support in establishing and setting toy manufacturerplant within the Chinese market. Furthermore, the market also have resource availabilitythat is physical and human resources as well as skilled workforce that is feasible forLego's future. b) Current key international business environment factors that affect the management of LegobusinessWith the increasing Asian market and grabbing the opportunity through conquering theChinese market there are key international business environment factors that directly affect themanagement of Lego businesses (Steurer, Langer and Martinuzzi, 2005). With the help ofPESTLE tool, they can easily analyse political, economical, social, technological, legal andenvironmental factors that are responsible for globalization of market and production of the Legoin the Asian market. The factors can be assessed through enabling PESTLE analysis-FactorsPolitical factorsThe political factor of Asia market is very strong that support inrising the overall economy. All the business activities iscontrolled and managed by the government (YÜCEL andDAĞDELEN, 2010).The tariff or duty that is enforced by the authorities are high thatwill disallowed the Lego in trading the material from one regionto another. Economical factorsThe economy of Asia market is quite effective that support theorganization in spreading out their operation in the region. Literacy level among the individual is very high that act aspracticable situation for management of Lego to engage ininternational business (Backstrand, 2006). Social factorsThe age structure of market constantly changes therefore themarket is suitable for Lego toy manufacturer as most of thepopulation is below the age group of 15. 4
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