Business Functions Integration and Lego Company Analysis Report

This report provides a comprehensive analysis of business functions integration, using the Lego Company as a case study. It begins with an introduction defining business integration and its importance, followed by an exploration of various functional units like marketing, HR, and finance. The report delves into internal and external integration strategies, emphasizing their role in achieving business objectives, especially for global companies like Lego. It then applies Porter's Five Forces model to assess the competitive landscape and examines Lego's strategies, including cost leadership and differentiation. Stakeholder and SWOT analyses are conducted to understand the internal and external factors influencing Lego's performance and to identify opportunities and threats. The report also highlights the significance of adapting to changes in the business environment and leveraging innovation to maintain competitiveness, concluding with insights into strategic planning and decision-making within the company.

Integration of Business Functions

Table of Contents
INTRODUCTION...........................................................................................................................3
Main body........................................................................................................................................3
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business Integration is defined as a strategy which is designed with the intention to adjust
information technology, organisational culture cultures, business objectives and align technology
with business strategy and targets. Business integration is also considered as a reflection of the
way information technology is being absorbed as a function of business. The purpose of the
integration of business functions involves investigation of several business activities such as
marketing , human resource management , sales , purchase etc. The purpose of integrations of
business functions is to provide a unified and critical understanding of businesses,its important
functions including internal and external factors which impact on them. Integrations strategy is
generally used by those organisations which are operating at international level. This integration
or plans assist business entity in managing several business operations in effective manner at
global level. Integration is defined as combination or combining of the several activities ,
procedures, system with each other. This strategy also support firm in accomplishment of desired
outcome. It provides business entity a chance to increase its competitiveness and gain
competitive advantage in the market.
The purpose of essay is to develop understanding about integration of business functions
and its importance at workplace. Project also have focus on identifying the roles of different
business functions in driving firm towards achievement of success in context of Lego company.
Main body
All organisations split its functions into several departments in which each and every
individual have specific role to play in driving the company towards achievement of success and
accomplishment of desired objectives. All the activities are essential for an organisation as it
assists in smooth functioning of business. There are several functional units in an enterprise these
are finance, purchase , marketing , human resource department, customer service , quality
control etc. All these departments have crucial role to play within an organisation. Each and
every functional unit has its own objectives. Integrations can be categories into two sub division
that is internal as well as external. Internal integration is mainly concerned with combining
several functional unit within an enterprise (Fawcett and Closs, 2016) On the other hand external
integration have focus on developing the relationship between an enterprise and external
activities. External integration is defined as a procedure of fundamental action and collaboration
as well as cooperation in which manufacturing, purchasing and logistics work together in

effective as well as manner with the intention to reach at reciprocally desired outcome.
Integration strategy support management team in ensuring the effective as well as efficient
utilisation of resources and elimination of overall aping of activities. It also supports manager in
facilitating smooth flow of information as well as cooperation and coordination between
different functional unit within an enterprise. Integration strategy also help business entity in
increasing working efficiency as well as productivity (Borkar,2010)
All the activities are not similar in nature and scope, strong integration assist various
department in improving their performance and productivity within an enterprise. Integrations
strategy is useful as well as beneficial for those companies who are operating their business at
international level. These firms have to face several difficulties due to change in business
environment and highly competitive surroundings. An organisation such as Lego company is
operating at global level, therefore business entity has to face many issues as well as challenges
related to maintaining the suitability and performance in completely new environment.
Therefore, integration strategy will be helpful as well as beneficial ion terms of dealing with
complex situations and providing appropriate changes in internal as well as external factors.
Lego Company is recognised as famous organisations in the world when it engages
towards children's toys. An enterprise emphasizes on important element which has supported
firm in fostering growth is development of children's creativeness via playing and learning by
assembling bricks (Barki and Pinsonneault, 2005) The Lego company has recognised the several
challenges created by the changes in external factors. Due to these factors an organisation has to
face many difficulties in providing appropriate services or goods in order to retain customers and
maintain competitiveness. Some business entities like Lego has made attempt to influence the
environment, for instance creating alliance with the government companies or other global
organisations so firm can influence new laws which have direct or significant effect on company
products or industry in which firm is operating (Brewster, 2017)
Industrial analysis
Porters Five forces model is an effective tool which helps in identifying the
attractiveness of industry in which an organisation is operating its business. It also supports firm
in recognising the area of improvement and strategies which can be used by an enterprise in
order to reduce the negative effect of five forces on business functions or operations.

Competitive rivalry-As the Lego company is operating in big industry and in global
environment. An organisation has to face high intense competition in the international market.
Changes in the pricing strategies by competitors have direct as well as significant effect on the
profitability as well as sales of an organisation. But the Lego company has an additional
advantage as company is targeting children for selling their products or services.
Threat of new entry-As retail industry is big and required huge capital investment, this factor
has limited the entry of new companies. Therefore , there are only few competitors but these
rivalries' organisation has great power to influence market situation. New firm in order to survive
in highly intensive competitive environment required to develop Strong and large distribution
network.
Bargaining power of suppliers-As Lego company has strong brand image and good reputation
in the market, suppliers in retail industry wish to deliver their products or services to customers
by seeking support from such popular companies. This strategy also helps suppliers in gaining
higher return on their investment. Such big organisation like Lego is the main source for earning
revenue by suppliers. Therefore , bargaining power of suppliers is low.
Bargaining power of buyer-In retail sector the bargain power of buyer is high. But in context of
Lego company, as an organisation is delivering good quality of products, customers are ready to
pay high amount for purchasing goods.
Threat of substitute products- There are high chances off introduction off substitute products
by competitors. Product substitution strategy can be adopted by competitor with the intense to
reduce the competition.
Porters generic strategies
Cost leadership strategy- It is required by Lego company to adopt the cost leadership strategy. As
this will assist business venture in attracting more number of customers. Cost leadership strategy
will help firm in gaining competitive advantage and establishing good position in the market.
Differentiation strategy- Lego company now emphasizes on adopting the product differentiation
strategy. As this will assist business entity in differentiating itself from competitors (Luftman,
Lyytinen and ben Zvi, 2017)
It has been identified from porters five forces model that the mega block company which
is big competitor of Lego organisation has able to achieve the leading position in an industry due
to the cost leadership strategy. It has provided mega block enterprise an opportunity to increase

its sales as well as profitability by minimising the cost through utilising different quality of
materials for producing goods or services. Whereas , Lego company uses premium quality of
material or resources to manufacturer toys for children. This factor has supported cited business
venture in gaining customer loyalty as well as developing and maintaining healthy relationship
with client. Now Lego company is emphasizing on differentiation on a broad scope by targeting
more than single market. It is required by an enterprise to emphasizes on designing long term
innovative products. As this activity will assist business entity in maintaining its competitiveness
and gaining competitive advantage in the market. It is required by marketing manager in cited
business venture is required to determine where to expand companies product channels and
business trading operations, in order to create a competitive strategy for maintaining the business
financial success and control in the creating toy market in the future. Management team in Lego
company has also planned to facilitate change in business structure as due to complex
organisational framework, there has been delay in decision making , due to which a company has
to bear short terms losses which has direct effect on business performance (Faulkner And et.al.,
2014)
Accessing the importance of stakeholder analysis while formulating new strategy for Lego
company
Stakeholders are recognised as group of people those who are directly or indirectly
involved or engaged in business operations. Different decision taken by these stakeholders have
direct as well as significant influence on the growth and success of firm. The interest of
stakeholders change as per their concerns. Stakeholders play important role in preparation of
plans or business strategies. There are basically two parties such as internal and e external
stakeholders. Internal stakeholders are the group of persons those who are working within an
enterprise and they participate directly in business action. External stakeholders are accountable
for providing resources for executes various business functions (Fawcett and Closs, 2016)
Chances in economic factors in business environment can lead to decrease in sales as well
as profitability of Lego company.
An organisation in order to deal and manage such type of changes has adopted the
innovation strategies. This plan has provided business venture an opportunity to provide
appropriate response to changes. It has also aided firm in eliminating the adverse effect on

change on business functions or operations. Management team in a Lego company has planned
virtual community in order to support customers. Manager in an enterprise has decided split their
business functions into small unit, such as LEGO Interactive which is computer-based play
materials and LEGO Direct catalogue sales. Business venture has adopted the expansion
strategy, it has planned to expanded into life-style products which has enabled firm to reduce
competition and its adverse effect on business operation , growth and success. Management has
also adopted the strategy to cooperate and form partnership with global companies. This business
plan or strategy has supported business venture in identifying as well as capturing several
opportunities. It also has provided Lego company an opportunity to develop understanding about
the market (Routledge. Roig and Ribeiro-Soriano,2016)
Swot analysis
Swot analysis is the techniques which can be used for identifying the internal strength
and weakness of an enterprise. This is an effective tool which also provide information related to
the risk as well as opportunities. Swot analysis help manager in identifying the way to increase
or maintain strength, methods or strategies for overcoming weakness , techniques for converting
risk into opportunities etc.
Strength:Good brand image and reputation in
the market.
Innovation skills has provided firm an
opportunity to attract more investors as well as
customers.
Good quality of products have supported an
enterprise in gaining customer loyalty. It has
also assisted business entity in developing as
well as maintaining strong relationship with
clients.
Talented and skilled workforce has allowed an
organisation to expand business operations.
Strong and large distribution network.
An organisation has its own websites which
allows customer to access the information
Weaknesses:
Ineffective marketing strategy.
Low market share and slow growth.
Great influence of changes in external
variables on business operations.
Increase in Dependency on Renowned
International Mega Brands.

about the products or services offered by an
enterprise. It has also provided Lego company
a chance to reach wide number of customers
and provide them services or goods.
Opportunity :Lego company has a chance to
enter into new market.
An enterprise has a chance to develop new
products.
Implement advance technology at workplace.
Threat:Increase in competition.
Threat of substitute products.
Changes in social, legal and economic factors.
Advancement in technology.
Purpose of an organisation is to increase its sales , manager in a Lego company required
to develop their focus on marketing activities. As marketing plays a coordinating role in
developing or creating the link or relationship between customers needs as well as demands with
firm internal functions such as logistics, manufacturing , research and development. It is
important for the management team in an organisation to develop strategy in order to integrate
marketing function with the other business operations or activities. As this plan will support
business entity in providing high level of satisfactions to clients. It will also help Lego company
in improving business performance and achieving good position in the market. Ineffective
integration strategy can create barriers and sometimes leads to disputes between functional unit
or departments. Supply chain management is another important business functions which allow
firm to deliver high value to customers. Coordination between several function department only
emphasizes on internal integration. But it has been identified that Lego company has able to
achieve success when implementing supply chain management at workplace (Grant, 2016)
Integrations of business Functions and role of several business activities in driving firm
towards achievement of success.
It is required by the management team in a Lego company to make appropriate plan for
facilitating coordination as well as integration between marketing and manufacturing functions.
As this strategy will help an enterprise in improving business performance. This strategy also
aids business entity in reducing the cost of promoting goods by eliminating the ineffective
marketing practices. Integration strategy also support management team in making quick
decisions and measuring performance of each as well as every operations.

Marketing and manufacturing have different responsibilities,it is very difficult to
integrate or combine both function. Role of marketing function is to help business entity in
identifying the needs as well as demands of customers in the market. Function of marketing is to
support firm in accomplishment of objectives such as increase in sales, profits , high market
share and growth, customer loyal etc. Role of manufacturing unit is to make a decision on
capacity expansion, determine facility layouts, plan production schedule, and control product
quality. As manufacturing as well as marketing function has different purposes there is a strong
interdependency in order to attain the compatibility and high performance of supply chain. There
are mainly two forms of integration which can take place between marketing as well as
manufacturing department there are interaction and collaboration. Interaction includes
communication between several functional department which can take place during meeting.
This strategy support management in ensuring the smooth flow of information between several
departments within an enterprise. Whereas, collaboration is concerned with sharing of resources ,
objectives and developing mutual understanding between employees in marketing as well as
manufacturing department (Barki and Pinsonneault,2005)
Purchasing function has passive role to play in an enterprise. Purchase unit in Lego
company is required to develop their focus on strategic purchasing, as the buying power
influences the speed to market as well as cost competence in the quickly changing competitive
business environment. Purchasing function is much influenced by the financial performance of
the company. Change in Economic factor in external business environment have direct as well as
significant impact on the financial stability of firm. These variables also have great influence on
the quality of products or services which are delivered by an organisation to its customers.
Production, distribution as well as purchase is considered as essential functions in internal supply
chain. Purchasing functions has direct as well as significant impact on the quality of products or
services produced by manufacturing department (Ashley May Organisational Change, 2017) It
has been analysed that purchasing integration has an affirmative relationship with manufacturing
performance (Sekaran and Bougie, 2016)
Finance department in Lego company work with integration with all the other
departments in an enterprise. Role of finance department is to prepare budget for different
functional unit in a firm. This function of function department helps business entity in
controlling the transactions and maintaining the balance between income as well as expenses.

Finance department support firm in improving the financial performance and maintaining fiscal
stability. It also has supported Lego company in identifying the appropriate sources of raising
funds at cheap cost as well as determining the appropriate techniques of increasing sales and
rising profits.
The human resource team has significant role to hire talented and skilled workforce. This
department is responsible for creating the high performing team which will assist firm in
accomplishment of objectives. It is the duty of human resource manager to identify the
requirement of manpower at workplace or within specific department and to provide the same.
Human resource department is also accountable for ensuring the smooth flow of information and
facilitating the effective cooperation as well as coordination between different functions (Gu,
Jitpaipoon and Yang, 2017)
External Integration
External integration emphasizes on coordination that occurs between organization and
external stakeholders. Supply chain management is the integrating of several activities or
functions associated with products and flow of information from raw material to customers,
external integration is primary as well as important factor in supply chain management in order
to accomplish competitive advantage in the market (Raju, 2017)
Integration between logistics and marketing function
Logistics are considered to be as one of the important element of marketing functions.
As logistics functions have focus on physical distribution of companies products. This specific
functions is also concerned with storing of goods for consumers and plays crucial role in sale of
goods and delivering products or services to customer. Integrations between marketing as well as
logistics function can be referred to as a procedure of action as well as collaboration in which
logistics and marketing functions co-operate with the targets in order to achieve desired
outcomes. Lego company have already integrated logistics and marketing functions to a certain
extent which has provided business venture an opportunity to provide high level of satisfaction to
client and increase sales as well as raise profitability. It has also provided business venture an
opportunity to gain customer loyalty and develop as well as maintain strong relationship with
clients. This form of integration strategy is considered to be based on the quality, efficiency and
success of company (Van Wormer and Besthorn, 2017)

Conclusion
It has been concluded from the report that Company operating at large scale and internal
level has to face many issues as well as challenges in order to survive in highly competitive
business environment. There are many departments in an organisation s with works together in
coordination with each other in order to support firm in accomplishment of desired objectives. It
has been concluded from the project that each and every business function has essential role top
play in driving organisation towards achievement of success. Assignment has explained the
function of each and every department in an enterprise. It has been concluded that integrations in
business functions assist an organisation in increasing working efficiency as well as enhancing
productivity.
Report has provided few strategic solution which can be used by Lego company in order
top deal with major challenges as well as issues when operating in global market.

REFERENCES
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