LSBM306: LEGO Innovation, Strategy and Framework Analysis Report

This report provides a comprehensive analysis of LEGO's innovation strategies and their contribution to the company's success. It begins with an introduction to innovation and its significance in business, followed by an examination of the key drivers of LEGO's success, including effective leadership, group work, new management styles, customer response, and structural changes. The report then delves into the innovation strategies and frameworks employed by LEGO, such as consumer segmentation and the Ansoff Matrix, to identify market opportunities. Furthermore, it critically analyzes the application of the Blue Ocean Strategy by LEGO. The report concludes by summarizing the key findings and highlighting the company's future prospects based on its innovative approaches and strategic implementation. The case study extensively explores how LEGO has adapted to market changes, engaged with customers, and employed strategic tools to maintain its competitive edge and achieve sustained growth in the toy industry.

Strategic Enterprises and Innovation

INNOVATION 1
Abstract
The main aim of this report is to analyse the contribution of innovation in the success of the
company. The case study of LEGO has been taken into consideration to analyse the key
drivers of innovation which is used by the company in order to achieve the success. It is
evaluated that the company used the different strategies and frameworks such as Ansoff
Matrix strategies, segmentation in order to grab the opportunities. Blue Ocean Strategies is an
appropriate method for the company due to it different benefits of the strategy. It has been
concluded that the company will achieve the success in near future due to its innovative
products and strategies.

INNOVATION 2
Contents
Introduction................................................................................................................................2
Innovation Drivers of Success...................................................................................................3
Innovation strategy and Framework...........................................................................................6
Blue Ocean Strategy...................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

INNOVATION 3
Introduction
Innovation is a process to manufacture the goods with the different features and techniques.
Introduction of a product in the market in the form of new product or services is called
innovation (Mitchell, and Walinga, 2017). Innovation is a factor of achieving the success for
the company in the market. Companies use the innovation strategy in order to grow the
business in the market with the successful exploitation of new ideas. New ideas help the
company to grab the high market share in the market. Innovation helps the company in
adopting the changes in the environment to deliver the best products and services. The
company should adopt the new strategy and ideas of innovation so that it can achieve the
success in the future (Hojnik, and Ruzzier, 2016). There are many key drivers which
encourage the company to produce the innovative product. In this report, the discussion is
made on the innovation and business strategies in order to achieve the success. The case
study of LEGO Group has been taken into consideration to analyse the innovation strategy
and opportunities approaches used by the company. LEGO Group is a manufacturing
company of toy which operates in Danish. It is well known company in the world which
manufacture the Lego-brand toys which consisting the interlocking plastic bricks. It was
established in 1932 and growing rapidly with the high revenue.
In this report, the innovative drivers of the company will be discussed in order to achieve the
success in the business. After that, opportunity approaches are analysed which is used by the
company to expand the business. Blue Ocean strategy is also used by the company which will
be discussed in the last session of this report.

INNOVATION 4
Innovation Drivers of Success
There are many key drivers which can be used by the companies to develop the innovative
products and services. Each and every company use their own innovation drivers so that it
can produce the unique products in the market. LEGO also achieve success due to these
innovation drivers which is discussed below:
Effective leadership
In this case, it is observed that the company achieves the success by delivering the quality of
goods and services. The leader of the company is passionate who inspired the employees and
the others to produce the new products with the new ideas. Godtfred was the CEO of the
company who was passionate regarding the development of the company and the products.
The employees always inspire from their leader and the responsibility of a leader also states
the leader should encourage the employee so that their performance will improve. The leader
of the company was an effective leader who motivates the employees by developing his
example to produce the new products with the new ideas (Christensen, Raynor, and
McDonald, 2015).
Group Work
It has been seen that the group work is always a key factor of the success. It is the
responsibility of a leader to develop the team spirit in the team so that they can perform their
task well. In the case study, it has been seen that the company faces the many challenges due
to external factors. The group deal with these challenges and introduce the new innovative
products in the market. The team spirit of the company helps them to face those challenges in
quick manner. Group work is not only helps the company in resolving the challenges but also
help it to adopt the new ideas such as LEGO develops the new play themes with the name of
LEGO castle, LEGO cowboys and many others (Baines, Blatchford, and Kutnick, 2016).

INNOVATION 5
New Management style
The company change the management in order to achieve the success of the business. The
company get the many advantages by changing the management. In this case, Kjeld was
appointed as CEO of the company after his father Godftred but in 2004, Kjeld handover his
position to Jorgen knudstrop. Jorgen was 35 years old when he was appointed as a CEO
which was a younger age in the business field(Jensen, 2008).. The ideas of the new leader
were new as per the trend which is a beneficial factor for the company in order to achieve the
success. It is observed that the company earned high revenue as compare to past years just
because of their innovative products. The new management helps the company in order to
manufacture the innovative products in the market due to new concepts and ideas (Bossle, de
Barcellos, Vieira, and Sauvée, 2016).
Customer Response
Customers are the main key drivers in the market which helps the company to grab the high
market share. It is necessary for the company to take care about the needs and wants of the
customer in order to garb the high market share in the marker. In this case, the company
gives an opportunity to the customer to suggest their ideas (Biemans, 2018). The company is
successful in innovate the products due to high participation of the customer. The customer
shows their interest in giving their suggestions to the company. The company also gives the
attention to the customer by giving them response and using their ideas. It can be said that it
is a good method which is used by the company in order to manufacture the new innovative
product. The new concepts and products of LEGO Group are based on paramount in keeping
the group alive and growing (Bayraktar, Hancerliogullari, Cetinguc, and Calisir, 2017).
Structural change

INNOVATION 6
Structural changes are also key driver of innovation which contributes in the success of the
company. It is observed that the company produce the innovative products by changing the
structure. The new structure of the company encourages the employees to produce the new
product with the new ideas (Doran, and Ryan, 2016). It is beneficial for the company to
change the structure in the context of innovation. In this case, it is observed that the company
earned the high profits in 2008 which was more than triple that of 2002 with the same level
of sales. After the adopting the changes in structure the company earned the tripled profit and
again in 2009 the amount of profit was improved. The company buy the new equipment’s
and change the procedure of manufacturing the products in the process of structural changes
of the company.
(Source: Rivkin, 2004)
These are the drivers which helps the company in achieving the success by introducing the
new innovative product in the market.

INNOVATION 7
Innovation strategy and Framework
Consumer Segmentation strategy
Consumer segmentation is the practice of dividing a customer base into a group of
individuals in order to sale the products in the market. There are different terms in which the
segmentation is divided such as age, gender, interest and spending habits. The process of
consumer segmentation requires the research to find the correct customer by using the both
quantitative and qualitative methods to find their preference. There are many advantages of
consumer segmentation which helps to boast the sale of the company and grab the high
market share (Venter, Wright, and Dibb, 2015). The segmentation improved the customer
experience, conversion rate, increased customer loyalty and high net promoter rates. The
company has to set the segmentation in order to achieve the objective. Segmentation helps
the company to main focuses on the one part to increase the sale of the company. It is
difficult for the company to set the segmentation because there are many factors which
affects the sale of the company. The segmentation strategy is beneficial for the company but
it consumes more time to find the best segmentation in which it can achieve the high
advantages. It is necessary for the company to find out the best consumer segmentation to
grab the opportunity in the market (Cross, Belich, and Rudelius, 2015).
In this case study, the company set their segmentation by targeting the new group of
consumers. However, it is a toy company which mainly target the children to increase the
sale but it also target the families as well. In the past time, the sale of the company was fall
down due to which the company suffers the loss. The company has to take the decision so
that it can boost the sale of the toys. The company introduce the parks in order to attain the
attention of the customer towards the products (Muerza, Larrodé, and Moreno-Jiménez,
2017). It is observed that the company invest in LEOLAND parks and other assets so that it
can attain the family attention towards the services of the company. The company achieved

INNOVATION 8
the success after the LEGOLAND parks which were introduced to attain the family attraction
towards the services. It was a mark of new beginning for the company because it helps to
boast the sale of the products. The company set the right target which helps the company in
boast the sale. It can be said that the family was behind the company in achieving the
success. Earlier, the children were the target of the company for which it manufactured the
product. But at a certain level the sale of the company was reduced that is why the company
set the new target due to attain the same attention (Jensen, 2008).
Ansoff Matrix
Ansoff Matrix is a strategic planning tool which provides a framework that helps the
executives, senior managers, and marketers. There are four strategies included by the matrix
in order to achieve the objective of the company such as Market penetration, Market
development, Diversification, and Product development. These strategies help the company
in grab the high market share (Gurcaylilar-Yenidogan, and Aksoy, 2018).
Market penetration strategy defines that the company introduce the same product in the
exiting company with the different advertisement due to which the different people attracts
towards it. Market development defines the strategy which helps the company in expanding
the business into the new market using the existing products. Product development strategy
refers that the company create the new products and targeting the new customer in order to
achieve the growth. Diversification strategy defines that the company grow in the market by
introducing the new product with the unique features in the market (Hussain, Khattak,
Rizwan and Latif, 2013).
In this case, the company used the diversification strategy in order to achieve the objective.
The company manufactured the product with the new play them such as LEGO castle, LEGO
cowboys and many others. Earlier, the company manufacture the wooden and plastic games

INNOVATION 9
for children but to produce the innovative product. The company introduce the innovative
product by using the high technology. The company introduced the new products in 2010 by
using the digital media. The target customer of the product attracts towards the goods and
services of the company (Leithwood, 2018).
It also uses the product development strategy by targeting the new customer to sale the
product in the market. It is observed that the sale of the company fall down due to which the
company change their targets in order to achieve the success. With the help of this strategy,
the company found the opportunity to grab the market share. The company introduced the
LEGO parks for the families in order to attract them towards the products and services of the
company (Piercy, 2016).
Market Penetration strategy use by the company to promote the products in the existing
market. As per the case study, it is observed that the company and the partners made the
movie to advertise the product in the market which was the new path of growth for the
company. The company grab the high market share by developing the new way of
advertisement and finding the new paths. The company make the movie with the other
company which has high goodwill value. Group and Warner announced the LEGO movie in
2009 to promote the product (Rivkin, 2004). There are many other filmmaker take initiatives
and offers the opportunity to the company but it rejected and finally develop the movie with
the Warner due to brand reasons. The movie of the company is action adventures in the
games industry which is highly demanded by the customer.
As per the case study, it is observed that the company is popular in the world which is
reflected with its rank in the market but the company has less presence in the different
markets(Jensen, 2008).. This framework helps the company to identify the opportunity due to
which the company can achieve the objective.

INNOVATION 10
Porters Generic Strategy
It contains the three strategies which are used by the company to develop the product
different from the others such as differentiation, cost leadership and focus. The cost
leadership strategy of the company defines that the company has to offers the low cost to the
consumer as compare to the others. Differentiation strategy is used by the company to
develop the product different as compare to the others. Focus strategy is the combination of
cost and differentiate strategy in order to grab the high market share in the market (Grünig
and Morschett, 2017).
As per the case study, it is observed that the company used the differentiate strategy in order
to achieve the objective. The company use the digital media to launch the new products in the
market. With the differentiate strategy of the company, it has the opportunity to attract the
large number of customer. Attraction of large number of customer helps to grab the high
market share in the market (Ansoff, Kipley, Lewis, Helm-Stevens and Ansoff, 2019).
Blue Ocean Strategy
Blue Ocean Strategy is defined the differentiation and low cost strategy to expand the
business in the new market by increasing the demand. It is about creating and capturing the
high market share by competng the competitors. It is based on the effective planning of the
company because the planning work is more effective than the random work. The company
develop the strategies in order to beat the competitors in the market. It is an ample
opportunity for the company to grow in the market with the high profit and rapid growth. It is
observed that the blue ocean strategy is vast, deep and powerful in the context of profit and
growth (Blue Ocean, 2018).

INNOVATION 11
The company has the opportunity to adopt this strategy in order to achieve the growth in the
market by developing the products. It has been seen that the presence of the company is less
as compare to the others in the new market due to lack of strategies and planning. Although,
the company develop the long term plan to grab the high market share in the market. The
long term planning of the company encourage the employees to produce the innovative
products as per the plan. The company faced the strong competition from the traditional and
much bigger toy manufacturers such as Mattel and Hasbro (Salavou, 2015). The new
competitors of the company such as Sony, Nintendo, Activision and Visual Arts were
entering the market with the advance technology games. Blue Ocean Strategy is applied in
those areas where is no competition in the market (Nagle, and Müller, 2017). This strategy is
beneficial for the company because it helps them to reduce the competition in the market. It
is also beneficial for the company in order to expand the business in the market because this
strategy is applied in the different sectors or businesses. This strategy is not limited to just
one sector or businesses which are favourable factor for the company because the company
has the opportunity to deliver the products in different areas in the different ways (The
Economic Times, 2019).
Conclusion
From the above analysis, it has been concluded that the company is innovative and creative in
manufacturing the products in the market. The company manufacture the products in the
market which is different from the other competitors. It has been seen that the company
achieve the success in the market due to its creativity and innovation. There are many key
drivers of innovation which contribute in the success of the company such as management
style, effective leadership, group work and many others. The company used the different
strategies and framework to grab the opportunity in the market. There are different

INNOVATION 12
framework which is used by the company such as strategies of Ansoff Matrix, Porters
Generic Strategies and Segmentation strategy in order to achieve the high growth in the
market. It is observed that the company is capable to use the different strategies so that it can
achieve the success in the market. The company can use the Blue Ocean Strategy in order to
grow rapidly and achieve the high profit. It is observed that this strategy is beneficial for the
company because it reduce the competition in the market and helps to produce the innovative
product. It has been concluded that the company will achieve the success in the future just
because of its innovative products.

INNOVATION 13
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25(2), pp.102-119.

INNOVATION 14
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INNOVATION 15
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