Innovation and Sustainable Business Development Report for Lego Toys

This report presents a comprehensive analysis of Lego Toys' innovation and sustainable business development strategy, focusing on the development of a smart board for visually impaired children. It begins with an executive summary and table of contents, followed by an introduction outlining the project's purpose. The report then delves into Lego's existing business model and proposes necessary changes to incorporate AI and Machine Learning technology. Key areas explored include value proposition development, business operations, supply chain, financial value capture, competitive advantage, and strategic fit. The report also identifies and assesses potential assumptions and uncertainties, proposing a phased development plan to address them. Furthermore, it provides a logical and persuasive argumentation for the selection of innovation tools and techniques, along with their application. The report concludes with a candid self-analysis and recommendations, supported by references and appendices including a business model canvas and a phased development plan. The core focus is the implementation of AI and ML technology in smart boards for blind children.

RUNNING HEAD: Innovation and sustainable business development
Innovation and sustainable business
development

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Executive summary
The report below is developed to support the value proposition developed for the
company Lego Toys that is directed at the production of a smart board for the children with
visual impairments. The report analyses the current business model, core capabilities, value
proposition development, supply chain development and strategic fit of the company for the
development of the new product. The report also includes a phased development plan for
mitigation of the uncertainties. A critical reflection has been incorporated for describing own
strengths and weaknesses as experienced while conducting the research and preparing the report.

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Table of contents
Introduction......................................................................................................................................3
Business model description.............................................................................................................3
Value proposition development.......................................................................................................4
Business operations development....................................................................................................5
Supply chain development...............................................................................................................5
Financial value capture....................................................................................................................5
Competitive advantage....................................................................................................................5
Strategic fit.......................................................................................................................................6
Identification and assessment of assumptions and uncertainties.....................................................7
Phased development plan to address uncertainties..........................................................................7
Logical and persuasive argumentation for the selection of the innovation tools and techniques....8
Logical and persuasive application of the selected innovation tools and techniques......................9
Candid and critical self-analysis....................................................................................................10
Conclusion and recommendation..................................................................................................10
References......................................................................................................................................11
Appendices....................................................................................................................................13

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Introduction
Lego is a plastic toy manufacturing company based in Denmark (Www.lego.com., 2019).
For innovation and sustainable business development in the organization the implementation of
Artificial Intelligence and Machine Learning technology in the Smart boards for the blind
children is proposed along with value proposition. The report below identifies the existing
business model of the company and identifies the changes required to proceed with the proposal
by implementing different innovation tools and techniques for collecting information. The report
also contains a phased development plan for dealing effectively with the uncertainties associated
with the innovation.
Business model description
The existing business model of Lego included reputed business partners like WWF, Disney,
Warners Bros. However, for proceeding with the proposed value proposition the organization
also needs to incorporate a number of potential IT companies and technology providers as its
business partner. The business partners would provide efficient technologies that it can
incorporate inside its new product. On the other hand, the customer segments are also needed to
be changed to blind children, their specialized schools and NGOs. Business model canvas refers
to the template concerning the business model development or making changes in the existing
business model (Ovans, 2015). The proposed business model for the organization can be
explained with the Business model Canvas which is explained in the figure below.

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Figure.1: Business model Canvas for Lego
(Source: Created by the learner)
Value proposition development
In order to be successful with the business proposal, the company Lego Toys are required
to have some essential resources. Its strong brand recognition and brand name all over the world
would help Lego to launch the product in the market easily by attracting the eyes of the parents
and teachers of the children with visual impairments. However, to meet the demand of the
children from different portions the organization needs effective production. Experience and
talent of the employees are also the core capabilities that would help the company to achieve its

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business goals with the launch of smart boards. The financial resources of the company need to
be enhanced for investing in the new product (De Massis et al., 2018). The organization also
needs to protect the intellectual property rights of the new product for avoiding the copy of the
idea and features by other toy manufacturing companies.
Business operations development
Lego has to deliver the product in a timely manner to the customers for meeting the
market demand. The company hence must ensure timely collection of the raw materials from its
suppliers such as technology providers and plastic suppliers. On the other hand, the
manufacturing process must be completed within a scheduled time hence, time management
skills of the employees of the R&D and production department is critical (Lyytinen, Yoo &
Boland Jr, 2016). Lego also needs to support a creative culture across the organization and
motivate its worker to contribute efficiently to the project.
Supply chain development
Business partners who are involved in the supply chain of Lego are plastic suppliers,
technology providers, distributors, retail partners, and gaming channels. The company needs to
build a strong bonding with new supermarket chains and new eCommerce websites for ensuring
the delivery of the products through them. On the other hand, the company can also make a
partnership with different NGOs who serve children with visual impairments (Wieland,
Handfield & Durach, 2016). IT companies are other important key partners for Lego as they
would help in the linking of the Artificial intelligence software with the new product and can
assist in dealing with the difficulties that can occur in the new products after selling of the
products.
Financial value capture
With this new product, the company would enter into a new market segment and attract
the parents and teachers of the children who have visual disabilities. On the other hand, the
company would also catch the attention of the schools for special children and NGOs. It would
increase the sales of the company. With the increased sales of the product, the company can
increase its profitability (West & Bogers, 2017). The service charges, licensing and royalties,
after-sales service charges and business consultancy services would also generate profit for the
company.

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Competitive advantage
The core capabilities of Lego Toys enable it to have greater competitive advantage over
its competitors. The way of response to the changing market trend is one of the major core
capabilities of Lego. The creative ideas of Lego to provide a unique benefit to the blind children
through the development of educational toys and games for are a new approach toward
sustainable development that would help the company to gain a competitive advantage over rival
organizations. According to Namada, (2018), strong brand recognition all over the world is a
great advantage of a company.
Strategic fit
The business proposal is compatible with Lego as the company have a talented and
experienced human resource who can effectively contribute to the innovation and
commercialization of the new product. The highly efficient marketing team of the company are
able to promote the new product through strong marketing strategies. With adequate financial
resources, the company can also support the activities that are required to develop and launch the
new product (Spender et al., 2017).

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Figure.2: Disciplined entrepreneurship canvas
(Source: Created by the learner)
Identification and assessment of assumptions and uncertainties
It has been assumed previously that the new product would effectively meet the requirements of
the blind children. However, disturbance in any feature of the product after-sales can impact on
the customer desirability and may reduce customer satisfaction level (Teece, Peteraf & Leih,
2016). The company has already planned, free, after-sales service for the initial customers.
However, for reducing the chance of impairments in products the organization needs efficient
market testing. It has also been assumed that the company possess the technological
infrastructure to support innovation. For technological support, the company have to make a
partnership with IT companies and technological providers to enhance technological feasibility.

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It has been assumed that the financial viability of the company is adequate to support the
innovation process. The high price of the new product can also decrease the demand for the
product (Isasi, Rahimzadeh & Charlebois, 2016). Hence, the company can choose a competitive
pricing strategy for selling the product and target customers from different classes.
Phased development plan to address uncertainties
For dealing with the uncertainties identified, companies can implement a phased
development plan (Pylak, 2015). In the first step of the plan, the company is required to make a
partnership with reputed technological providers and IT companies for tech support. In the next
step, the company has to generate greater financial resources for manufacturing, marketing,
delivery and service of the products. In the last stage, the company must conduct proper market
testing of the products on a sample population for checking the viability of the product and keep
feedback for improving the product.
Figure.3: Phased development plan
(Source: Created by the learner)
Logical and persuasive argumentation for the selection of the innovation tools and
techniques
● Brainstorm ideas: The tool of brainstorm ideas helps to support the process of innovation by
gathering and organizing different ideas (Faludi, 2015). As the solution to the identified

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problems with this tool is easy the tool can be implemented in the present study to support the
report findings.
● Core capabilities: The present study identifies the core capabilities of Lego Toys in proceeding
with the proposed business proposal. The tool of core capabilities helps in the identification of
the capabilities in the easiest way (Giniuniene & Jurksiene, 2015).
● Value chain analysis: For proceeding with the proposed business plan a company requires to
analyse the effectiveness of its supply chain. Hence, this tool would help to identify the primary
and support activities needed to complete the project.
● Porter’s five forces: Information regarding the competitiveness of a business is important while
developing a new product. Porter’s five forces would allow knowing the substitute products, the
efficiency of the competitors and new entrants in the industry.
● Business environment map: Business model ideas are essential while making changes in the
existing business model (Van Der Pijl, Lokitz & Solomon, 2016). The business environment
map provides different business model ideas which can be applied in this study as well.
● Your vision of the future canvas: This tool helps business professionals to co-design the vision
and to create five bold steps for achieving the vision (Toro-Jarrín, Ponce-Jaramillo & Güemes-
Castorena, 2016). Hence, this tool would effective in this case and helps to identify steps
proceeding through which the business goals can be achieved.
● Rationale: why, what and how: Rationale is implemented to describe why a particular process is
required and what can be achieved with the process and in which way the process can be
applied. Such a tool is thus important in the application of the Artificial Intelligence and
Machine Learning technology in the smartboards.
● Innovation readiness analysis: This tool can be implemented to support the report findings as it
helps to know how prepared a business is for supporting and nurturing a specific innovation.
Logical and persuasive application of the selected innovation tools and techniques
The brainstorming ideas when implemented on the business proposal of Lego Toys
indicates that ideas such as increasing suppliers, partners and recruiting technically skilled
employees can improve the innovation process. It has been also identified that strong market
research and the efficacy of the R&D team are the most important core capabilities of the
company (Lüttgens & Diener, 2016). The value chain analysis demonstrates that the company is
required to pay more attention to the support activities like HRM in order to implement the

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proposed business plan. The outcome of the application of porter’s five forces indicates that the
company can face a major problem as there is a huge chance of development of substitute
product by the competitors. Business environment map has also been implemented that
developed a number of ideas to change the business model by increasing the channels for selling
the product and handle the customer relationship s by providing free after-sales services. Your
vision of the future canvas explained the essential key activities required to succeed with the
business proposal. The rationale tool justified why the organization is required to develop an
innovative product to meet the demands of the blind children and how it would increase the sales
and profitability of the company. With the tool of Innovation readiness analysis the financial
resources, the efficacy of the R&D and marketing team has been analysed so that improvements
can be made to support the innovation.
Candid and critical self-analysis
To complete this assignment I conducted primary and secondary data collection process
to collect information about Lego Toys' business model, core capabilities, key resources and
partners, brand image, customers, target market and financial resources. Secondary sources are
very informative and helpful in supporting the report findings from already conducted research
reports (Quinlan et al., 2019). While conducting the practical market research to identify the
customers, target market and competitive advantage of the company, I have dealt with different
people and utilized my communication skill and negotiation skills. I have enjoyed the process.
On the other hand, while collecting information from secondary sources I have depended more
on the relevant internet sources like business reports, official websites, government reports, and
journal papers for searching information regarding the new technologies that are available and
can be implemented in the toys especially for the blind children. I have also consulted some
books regarding the business models, innovation and innovation tools and techniques. As I am
good at the online primary research, I have greatly enjoyed while in this assignment. The report
writing process seemed difficult to me as multitasking ability was required in this stage. My
multitasking ability is weak, hence, the report writing process could be improved by improving
this skill. Adequate usage of headings and subheadings has been done along with the report,
which has made the report more presentable. The strategy has also enabled me to meet all the
assessment criteria. Learning from the workshops, class notes and lectures, and internet sources
have helped me to gain knowledge regarding value proposition and innovation and sustainability.

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Conclusion and recommendation
The above-conducted study demonstrates that for the success of a business with a new
business proposal change in the existing business model is required. Hence, Lego toys can
succeed with their present value proposition by launching the product Smart Board characterized
by Artificial Intelligence and Machine Learning technology if it can increase its business
partners and suppliers. The company is required to conduct a proper market testing for
improving the new product before finally launching it in the market.