Lego Group Case Study: Strategic Analysis and PESTLE Framework

This case study examines the Lego Group's strategic decisions and market performance, focusing on its response to changing consumer demands and market trends. The analysis includes a PESTLE framework to assess the political, economic, social, technological, legal, and environmental factors impacting Lego's business. The study highlights the company's successful ventures, such as its movie-themed products, and its strategic adaptations, including restructuring initiatives and product diversification. It also explores the impact of economic factors and technological advancements on Lego's operations. Furthermore, the case study evaluates the company's competitive advantages, brand loyalty, and financial outcomes, providing insights into its overall business strategy and its ability to maintain market relevance and profitability. The analysis incorporates various academic sources to support the findings and conclusions.

Individual Case Study Analysis

Table of Contents
16- 14..........................................................................................................................................3
16-15 ...............................................................................................................................................4
Reference ........................................................................................................................................6

16- 14
Jorgan Vig Knudstorp who became CEO in 2014, has acknowledge that the company
forays into theme parks, children clothing and software games which had been wrong strategy.
Further it launched a restructuring initiative knows as shared vision. After a few month, its cross
functional team collaborated to reduce the number of SKUs to 6500 the number of colour option
also slashed upto 5- percent. Further for making key strategic decision it is important for the
business to conduct PESTLE so that it can measure the macro factors which can impact its
business. This all factors help in making strategic decision in an effective manner
 Political: There are some political factor which impact organisation because government
changing process in this zone does not impact any notable obstacles for business
operations. In this nation there are many government where Lego business have their own
civil law to protect consumer interest and ensures a fair trading environment. Further
revenue which is generated by government from the tax and excise duty etc is practices
(Fozer, Sziraky and Mizsey, 2017.). One of the main issues faced by them is that new
government had revised the taxation system and its rate due to which company unable to
make profit.
 Economical factor: At the time of recession the the consumer spending power is declined.
Further unemployment rate is increases as compare to last year. Due to this reason Lego
need to sale its toy product at lower prices which directly impact their profits (Sarwar,
Ramachandran and Hosseinian-Far, 2017).
 Social: as per the research it has been observed that needs and demand of people changes
with the changes of time. It is important for the firm to conduct market research before
preparing any new product so that it can easily increase the satisfaction level of customer
and enhance profit (Mazzeo, and Merkley, 2017).
 Technological factor: There is growth in technology which help company in making
innovative products for its customer. Along with this, through the use of new technology
firm can easily reduce the cost of lobar and handle all its business activity in an effective
manner (Nelson and Mattes, 2017.).
 Furthermore, it can be stated that firm adopt new technology, because it help in make
new and innovative product for its customer . New technology also help in increasing the
production activity and reduce the cost of lobar. Along with this at the time of making

recession company can easily keep lower price of its product so that they cane easily
survive in competitive market. For making strategic decision firm need to identify its
competitor and make innovative product in order to gain success (Mazzeo, and Merkley,
2017). Further outsourcing must be a strategic decision and it should not be a short term
cost reduction strategy. Further it develop the product series as per accordance to the age
categories. Hence it can be stated that after analysing the the external environment it
become easy to make any strategic decision.
16-15
Lego movie Themed products, keyed to popular film franchise such as Harry potter, lord
of rings and spider man included the construction plans are the movie themes products. This one
is the right strategy. Its new which target girls which has been sold extremely well. Further Lego
had achieved success because of its increase in sale of product since from last few years. The
firm had smart and strong managers of their brand (Champion and Knudstorp, 2017). In 2014 its
movie was block buster. Despite terrible weather and winter Olympics as competition. Its Lego
movie earn upto 70 million and it one of the fourth best non sequel animated opening of all time.
The Lego movies are booming in the entertainment market. It acquired a simple and basic
strategy by showcasing Batman, Superman, Harry potter and various other all time hit characters
on screen. The Lego movie are considered as wildly imaginative as compare to the original. The
result of has gained mixed success financially. The reported budget for Lego movie is around
$60 million which is going to be more profitable and likely to encourage the executives within
the studios for rolling the dice in similar genre picture (Champion and Knudstorp, 2017). Apart
from the box office collection, the innovative idea of Lego generate hundreds and millions of
dollars in merchandising and selling. The strategy behind developing the Lego is totally
innovative and new to the industry, as a toy commercial it has no problem related to the sales.
The superheroes and other similar characters create success on the box office.
Entertainment companies loves to use the Lego character as it indicates brand loyalty,
which became a valuable factor for director and producers as they steel the favourite character
and make movie over it (Andersen and Ross, 2016. ). The children are primary fan of Lego
characters which makes big production house such as Warner Bros. And Disney to pick it and
make a movie in which spiderman is riding on a bat-mobile. Lego is particularly a part of toy
licensing world and it is popular not only because kids like it but also product itself is very

selective. The partners are major entertainment houses which are there to provide support to the
characters.
It can be concluded that firm used effective strategies in order to accomplish success. Along with
this it also suffer from loss because its many product and service retail unsold and difficult retail
situation was taken place due to dollar weakness. Further it can be concluded that in firm
accomplish competitive advantage by its movie theme products which earned millions. The
company also forays into video games for instance, children book that is the lego ideas and Tv
series. Further the Lego movie which was released in 2914 was proved one of the blockbuster
with tickets sales nearly 500 millions.

Reference
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Environment Affecting Management of Fresh Water Resources? A Case from Iran with
PESTLE Analysis. Materia socio-medica, 28(4), p.307.
Champion, D. and Knudstorp, J.V., 2017. A CONVERSATION WITH JORGEN VIG
KNUDSTORP, CEO AND PRESIDENT OF THE LEGO GROUP BY DAVID
CHAMPION.
Champion, D. and Knudstorp, J.V., 2017. A CONVERSATION WITH JORGEN VIG
KNUDSTORP, CEO AND PRESIDENT OF THE LEGO GROUP BY DAVID
CHAMPION.
Chang, C.H. and Wu, Q., 2017. Social Networking and Corporate Innovation.
Fozer, D., Sziraky, F.Z., and Mizsey, P., 2017. Life cycle, PESTLE and Multi-Criteria Decision
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Mazzeo, M., Mazzeo, M., Merkley, G. and Merkley, G., 2017. LEGO® Friends: Leveraging
Competitive Advantage. Kellogg School of Management Cases, pp.1-21.
Mazzeo, M., Mazzeo, M., Merkley, G. and Merkley, G., 2017. LEGO® Friends: Leveraging
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Nelson, C. and Mattes, A., 2017. Lego, Creative Accumulation and the Future of Play.
In Multidisciplinary Perspectives on Play from Birth and Beyond (pp. 265-279). Springer
Singapore.
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Sarwar, D., Ramachandran, M. and Hosseinian-Far, A., 2017, January. Disaster Management
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PESTLE Framework. In International Conference on Global Security, Safety, and
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Schulz, M., 2016. An Analysis of LEGO's Response to an Attack on its Partnership with Royal
Dutch Shell. Elon Journal of Undergraduate Research in Communications, 7(1).
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