Case Study: LEGO Group's Digital Transformation and MIS Analysis

This case study analyzes the LEGO Group's transformation for the digital economy, focusing on its Management Information System (MIS). It explores the value chain, examining inbound and outbound logistics, operations, marketing, and service. The study delves into the company's cost-cutting measures, outsourcing strategies, and digital approach, including the development of multiplayer games. It also covers the manufacturing process, from raw material collection to packaging, and analyzes market factors, including consumer trends and competitive forces. Furthermore, the case study applies frameworks such as the Ansoff Matrix and Porter's Five Forces to assess LEGO's strategic decisions and competitive position. Finally, the case study also discusses the Mintzberg's strategy and its impact on the company.

Running head: MANAGEMENT INFORMATION SYSTEM
MANAGEMENT INFORMATION SYSTEM
Name of the Student
Name of the University
Author Note:

1MANAGEMENT INFORMATION SYSTEM
Table of Contents
Answer to Question 1..........................................................................................................2
Answer to Question 2..........................................................................................................3
Answer to Question 3..........................................................................................................3
Answer to Question 4..........................................................................................................4
Answer to Question 5..........................................................................................................4
Answer to Question 6..........................................................................................................6
Answer to Question 7..........................................................................................................6
Answer to Question 8..........................................................................................................7
Answer to Question 9..........................................................................................................8
Answer to Question 10........................................................................................................9
Answer to Question 11......................................................................................................11
References..........................................................................................................................12

2MANAGEMENT INFORMATION SYSTEM
Answer to Question 1
Value chain and value system at LEGO comes up with important tool which covers and
highlights the way in which the organization can add value to the products (Andersen and Ross
2016). It is mainly done by the help of manufacturing process at LEGO.
Inbound Logistics: Materials are mainly provided by German firm and Lego comes up
with some of the standard logistics (Kerr, Phaal and Thams 2017). So, as a result it does not have
any kind of bottleneck situation that will damage the bright future.
Operation: Projects at Lego are mainly looking for future which is looking for some
sophisticated software and any kind of analytical approach.
Outbound logistics: Lego makes use of various kind of hub centres that are merely
located to some of the retailers for proper control of inventory in much better way (El Sawy et al.
2016). It is mainly needed for creating some of the fewer stocks.
Marketing and Sales: Lego aims to follow a complete portfolio which comprises of
themes and license that are very much successful. It has merely taken part in the strategic group
with Warner Brothers.
Service: Lego group comes up customer retention scheme which is available on online
platform by the help of website. It is the point where the customers get the VIP point that is
needed for online purchase (Black, Tomlinson and Korobkova 2016). It merely provides
redirection which is needed for any kind of future purchase. On world-wide platform, there are
Lego clubs that aims to host the annual events and community blog which is completely
maintained.

3MANAGEMENT INFORMATION SYSTEM
Fig 1: Value Chain Linkage of Lego group
(Source: Pinto-Llorente et al. 2016)
Answer to Question 2
Lego group focused on cutting the overall cost and conducting a review on the whole
procurement process. In this, the number of suppliers which were reduced in huge way that is
very much significant in number (Nie et al. 2018). The organisation focused on outsourcing 20%
of the products by Flextronics and outsourcing the rest to some of the cheaper locations. The
overall sale of Lego products is very much seasonal in nature and order horizon is very much
shorter. The supply chain department of Lego group requires flexibility that ended in association
with Flextronics (Hu, Zheng and Lee 2018). Lego focused on proper management on global
operation in much more effective way.
Answer to Question 3
Lego has come up with new strategy for digital approach where they are planning to
develop games which can be played on multiplayer platform. In the year 2010, the new internet

4MANAGEMENT INFORMATION SYSTEM
game was launched. There were some new areas of growth which were opened by making a co-
operation with the whole gaming industry (Thomas and Paravantes 2018). The strategic decision
was merely taken by the Lego group, and it can be seen as a result of sales that was achieved in
the year 2008 and 2009. The main aspect of the LEGO brand identity is all about analysing the
brand-customer relationship (Game 2017). With respect to analysis, the brand of LEGO was
completely in-line to both products and brand as an organization.
Answer to Question 4
In LEGO, the very first step is all about collecting the raw materials where non-metal
complex compounds that are polymer are collected. In the very step is system design where Lego
makes use of flow shop design. In this bricks production line which is created from the beak
themselves (McCusker and Swan 2018). The first step of manufacturing product is
copolymerization, where all the materials are used like ABS and dyes. The second step is all
about transportation where ABS plastic arrives at the facility and is mainly stored in vacuum of
large foils. The third step is all about injection modelling, where raw ABS are completely heated
under 25-150 tons of pressure. The fourth step is all about collection where complete bricks are
deposited (Jaligot et al. 2016). The fifth step is mechanical fastening, where parts are assembled
by making use of autonomous robots. The last step is packaging, where the finished products are
completely put into boxes. After that, it is prepared for shipping on global platform.
Answer to Question 5
The demand for toys completely depends on availability of personal income because toys
are not considered to be primary needed goods (White et al. 2018). Toys are considered to be
best gift for the children, and so a decision of purchase is required along with personal emotion.

5MANAGEMENT INFORMATION SYSTEM
At present, innovation is the key which is considered to be as one of key market segments in
whole retail industry. Major part of sales in few weeks that is calculated by the end of the year
(Samsatli, Samsatli and Shah 2015). Target customers tend to get older day by day, so a result
the toy provider may miss sale for the whole life.
Segment Pre-school Pre-Teen Teenagers Adults
Key buying
factors
Quality,
certification,
simulation
capability
Consumer trend
Appearance
Challenges,
Connecting with
friends
Game,
connecting with
friends.
Competitive
factors
Advertising of
distributive
packaging
Distributive
package
advertisement
solution
Price advertisement Price
integration
Key success
factors
Brand, Quality,
variety
Innovation, retail
availability
Upgradation, range
of accessories.
Evolution of
product,
quality.
There are mainly four sources of Critical Source Factors like
Industry: Lego organization is completely in Toy Industry where each CSF is completely
relevant to the firm with which it is associated.
Firm: The present situation of Lego with in the whole Industry which merely highlights
competitive strategy and its overall geographical location.

6MANAGEMENT INFORMATION SYSTEM
Wider Environment: Economy, political factor and consumer trend of Lego in most of
the country where the operates in.
Temporal organizational factor: There are many areas where the activity of the firm is
usually concerning in nature as it is unacceptable and require attention.
Answer to Question 6
Fig 2 : Value Chain analysis of LEGO
(Source: Created by Author)
Answer to Question 7
Value chain analysis is known to be a tool which aims to highlight and uncover in which
organization add value to the products (Black, Tomlinson and Korobkova 2016). This is mainly
helpful in overall manufacturing process.

7MANAGEMENT INFORMATION SYSTEM
Inbound logistics: The material for Lego group is completely given by Laxness, which is
a Germany based firm. The overall raw materials can be easily influenced as a result of 3D
printing (Bhargava, Bafna and Shabarisha 2018). Much similar is given to the materials which
are used at the time of producing Lego bricks.
Operation: The future demand for Lego projects makes use of analytical way and
software organization. All the products of LEGO make use of legislation at European Union. As
a part of the whole toy industry, the mere focus is all about promoting the overall safety and
standard quality of their toys.
Outbound logistics: Lego makes use hub centre that is mainly situated in much close
location for getting proper control on the inventory. It is mainly done so that shortage of stocks
can be easily overcome (Aithal 2016). There are several discounts that are being offered to small
firms that place the orders.
Marketing and sales: Lego group aims to follow a complete portfolio for themes and
licences which are successful. Lego group emphasize on the pricing strategy that is “only the
best is good enough”, but it merely has competitors like Mattel and Mega that offers products at
minimum price.
Service: The organization comes up with customer retention capabilities by which the
website gets the required VIP points (Van Alstyne, Parker and Choudary 2016). The clubs of
Lego group are well established on worldwide platform that hosts annual events and even
community blogs which are maintained.
Answer to Question 8
Ansoff matrix is very much helpful in analysing the fact of how business has developed
in the last 20 years.

8MANAGEMENT INFORMATION SYSTEM
Market Penetration: The organization is working hard on the promotion so that they can
build sales for the basic market of LEGO product (Black, Tomlinson and Korobkova 2016). It
will come up with traditional range in most of the markets of both Europe and America.
Development of Product: LEGO is very much focused on the given product lines so that
it can be developed in tie for the film franchise.
Diversification: Innovation is known to be as one of the biggest risk and LEGO have
stumbled around twice (Black, Tomlinson and Korobkova 2016). Firstly, the overall cost moved
to some of the theme parks from which the organization has retreated.
Development of Market: The organization has been tried on having the existence
products but is mere much focused on the development of new market for girls.
Fig 3: Ansoff Matrix of LEGO
(Source: Yin 2016)

9MANAGEMENT INFORMATION SYSTEM
Answer to Question 9
Five Forces Framework of competitive forces for market can be easily understood, and
origination of overall profitability in the whole industry (Black, Tomlinson and Korobkova
2016). This particular framework is needed for anticipating and handling future competition.
Threat of Entry: It is much higher as new toys will enter into the market with some of
the big brands like Walmart and Target (El Sawy et al. 2016). LEGO is a well-known brand
which is very much tough for new imitate in the minimum.
Bargaining Power of Suppliers: Chinese subcontractors are known to be primary
supplier of Lego. At present, there is large number of Chinese suppliers who supply some of the
industries also.
Bargaining power of Buyers: LEGO aims to offer unique products which that cannot be
exchange by the products at retailers (Pinto-Llorente et al. 2016). Buyers must not to integrate
the overall production of LEGO toys.
Threat of Substitute: At present, kids aim to spend much of their time with some of the
digital products. The ultimate notion of LEGO is all about defying the overall trend and its sales
(Nie et al. 2018). LEGO comes up with some of the incorporated technology in some of the
given products.
Competitive Rivalry: Some of the major competitors of Lego are Hasbro, Mattel and
lastly NAMCO. The competitors of LEGO are two that is Hasbro and Mattel (Hu, Zheng and
Lee 2018). LEGO is much ahead of them, but shortly, it is expected that they will share the
operating cost.

10MANAGEMENT INFORMATION SYSTEM
Answer to Question 10
Henry Mintzberg strategy is considered to be as most common method for achieving the
required goals of organization like LEGO. It merely makes use of action of the given period
where the position is completely reflected on the decision for providing some of specific
products in whole market. It merely reflects on the decision for providing some of the special
products in the whole market. It can be stated as the perspective which is associated with
required decision and vision. Strategy can be stated as a competitive position which helps the
firm for getting differentiate in the eye of the target customers. LEGO focus on overall growth
and innovation strategy so that they can gain get competitive advantage in the whole market. The
external environment of LEGO has completely changed as a result of faster child development
and overall growth in the present digital world. All the possible strategic drift of Lego has
ultimately resulted for changes in fashion trend in whole of toy industry. Lego has ultimately
responded to the changes by proper combination of both market adaptation and innovation. It has
ultimately introduced digital toys and build up value for cross-selling that support user. The
organization comes up with business units like LEGO interactive and LEGO direct in lifestyle
product. The organization has collaborated with many of the brands like Warner Brothers.

11MANAGEMENT INFORMATION SYSTEM
Fig 4: Corporate Management of Lego Group
(Source: Game 2017)
Answer to Question 11
Lego has come up with a new digital strategy so that online games can be developed. It
will be played by multi-players, which is known to be Lego Universe. Lego has completely
moved to SAP business software (Samsatli, Samsatli and Shah 2015). It is Germany based
software organization which is very much established in enterprises software solution. SAP is
considered to be as one of the best software organization in the whole world. Manager make use
of SAP tool which is needed for obtaining details from database. It does not need any kind of