LEGO (A): The Crisis Harvard Case Solution & Analysis

Business Competitive Strategy:

Business competitive strategies are the one that allow companies to make such tactics through which the company can make effective and efficient use of their resources. There are different types of strategies available for a company to maintain its competitive advantage in the market. Three types of business competitive strategies include: cost leadership strategy, price strategy and differentiation strategy. The LEGO group is using the differentiation strategy as the company states, "we want to be the best, not the biggest." In addition to that, the company is focusing on new product development along with innovation as well. To make further differentiation, the company is trying to create a synergy between physical and digital plays.

lego (a) the crisis case solution

lego (a) the crisis case solution

Core competences:

The company has made itself competent in all the activities in the value chain to enhance its up-stream and down-stream activities.

Growth in market:

As of now, the company is using a penetration strategy to enter into middle-class market as the products of LEGO are positioned as premium quality products. Whenever a company launches a new product in the market, they always use product development strategy and put new products on existing markets.

Stakeholders:

In the list of stakeholders, customers are the most important as they are the major source of the profits. Customers are the ones who buy the products that the company wants to sell.  In order to remain competitive, the company needs to satisfy the needs of its customers.

The second major stakeholder of the company is the competitors who are doing business in the same industry and always try to beat the company through different tactics and strategies. Competitors do have a major impact on the performance of the company as any innovation by the competitors will have a major impact on it. Further, if the competitor is similar to the company in financial and other terms, it will be a big threat for the company.

Other stakeholders:

Other than competitors and customers, rest of the stakeholders include: creditors, employees, owners, suppliers, directors, government agencies, union and communities. All these stakeholders have a major influence on the performance of the business. With the help of these stakeholders, the company can easily promote and commercialize its products in the market.

Strategic Capabilities:

In order to stay competitive in the market, the company has to analyze the current situation along with future prospects as well. After the financial collapse, the company was forced to remake their strategies. The company identified certain potential for its brick products and also reviewed its procurement and production strategies to make the best use of its resources.

PEST Analysis:

With the help of PEST analysis, the company can identify its macro-environment to recognize critical factors for the success of the company. These macro-environmental factors do not change by the competitors only as it includes the whole macro-environment of the business. The company is tending to focus more towards the Western European and North American markets because these two regions are the major source of company's sales. The analysis is done to identify the political, economic, social and technological factors that affect the LEGO Company and the toy industry as a whole.

Political:

The performance of the company is hugely affected by the political environment of the company as it has a major impact on the company's long and short-term decisions. Traditionally, the toy market in Europe and North America was highly regulated by the government. As the industry dealt specifically in the manufacturing of products that were used by the children, therefore; the government was highly concerned about the manufacturing process of the products thus; it created high weights on the security of products. In Europe, there were safety standards set by EU that were based on three elements; first the product had to meet the safety demand, second, the product should be properly documented and last company's name along with the address and warnings should be marked on every product.

Economical:

It is crucial for a company to make necessary arrangement about the economic ups and downs in the economy. It is the duty of the manager to adjust the demand and supply of products according to the economic trends of the industry. The manufacturing of the products can be severely affected by the prices and availability of raw materials. For LEGO, if the price of the raw materials increased, then it might create problems for the company. In order to hedge the risk of raw materials, LEGO can forecast the demand of its products and have some safety stocks of raw materials....................................

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