Organizational Analysis

Organizational Analysis. Student name and number.

[Audio] The following organizational analysis provides insight into the organization's performance, current problems, gaps, and inefficiencies facing LEGO, opportunities, and a strategy for improving performance and finally, an assessment of LEGO's organizational design elements. In 1968 the first LEGOLAND theme park was opened in Billund. DUPLO started being sold in 1969 which offered a generous size plastic brick for younger children. Their strategies for going about this is innovation and quality, both of which can continue to grow not only what can be achieved with their toys but push the company and its customers to find new and creative ways to use and evolve their toys..

[Audio] LEGO's business model, which is built on the production and delivery of tangible objects, is similarly inefficient. The company's reliance on plastic as a key resource poses environmental and financial issues, especially given its goal of transitioning to sustainable materials by 2030 (Financial Times, 2021). Furthermore, worldwide distribution networks are vulnerable to interruptions, which can lead to higher prices and delivery delays, negatively influencing consumer satisfaction. LEGO might approach these difficulties in a variety of ways from a strategic standpoint. First, more investment in research and development might lead to the discovery of low-cost, sustainable alternatives to replace conventional plastic. Collaborations with other research institutes might help to speed up this process. Second, to limit disruption risks, LEGO should investigate possibilities for simplifying and diversifying its supply chain. Investing in local manufacturing facilities or cooperating with various suppliers in various locations are two workable solutions. In 2022, the LEGO Group's revenue amounted to almost 65 billion Danish kroner, which equates to approximately 8.7 billion euros. This is up from the estimated 55 billion Danish kroner recorded a year earlier, (Statista, 2023). With its comfortable financial position, LEGO can invest in new assets and projects, such as retail stores and manufacturing plants. These end-to-end capabilities is based on the organizational structure that LEGO has created, to make a strong and reputable brand..

[Audio] From a performance standpoint, the company has done an exceptional job of diversifying its portfolio to compete with Mattel and Hasbro, which much of its success attributed to millennial parents focused on purchasing educational and stimulating toys for their children (Ro, 2015). To remain competitive, LEGO has invested in several strategies to help it outpace the competition. Firstly, LEGO benefits by reproducing licenced versions of its products, inclusive of Star Wars, The Simpsons, Harry Potter, and Seinfeld (Gottlieb, 2023). By purchasing the rights to sell these already-known themes, LEGO not only benefits from the popularity and reputation these other brands have earned, but now also gains a profit from their creation. Moreover, LEGO now produces much of its product in China, benefiting from both the lower cost to purchase supplies and manufacture (Gottlieb, 2023). Lastly, as a world-recognized brand, LEGO has embraced markets such as entertainment by producing movies and video games in addition to its well-known toy bricks (Gottlieb, 2023). By expanding on the product available in-market, LEGO can reach a more varied consumer base, enticing those who may have no reason to play with blocks to leverage the company's products. LEGO has built an outstanding product over the years that continues to provide consumers with quality toys. "Hence, among the competitors in the toy industry, Lego's focus on innovation, quality and marketing effort has allowed it to stand out on a global scale" (MBA Skool Team, 2022). New entrants would have to spend a great deal of resources to match or surpass LEGO's current position in the toy industry. LEGO still has opportunities to expand by opening more stores, particularly in China where sales have increased in the past year. "Lego plans to open another 145 stores this year, mostly in China" (Gronholt-Pedersen, 2023). The advances in technology have created new dimensions to the toy industry with virtual reality becoming extremely popular. LEGO has also embarked on this new trend and should continue to introduce simulators, augmented reality (AR) products and other digital options to retain and attract more consumers..

[Audio] Moreover, we recommend that the company maintain its focus on partnerships that enhance pre-existing product lines such as themed LEGO blocks and puzzles. By doing so, LEGO can maintain its current manufacturing strategy while enticing both new and existing customers to purchase product. Through LEGO's ability to innovate and continually introduce new product lines, this organizational analysis is quite positive. These products, while unique and well built, are one-offs that do not fit the product line style theme that most other LEGO products follow. Set a theme and one or two products developed in house and leverage the community's creativity to fill out other toys in that theme, reducing resources from the development team and adding engagement and a sense of attachment to new products lines. This is the result of issues such as a worldwide pandemic that impacted the supply chain distribution. LEGO's business is also dependent on the production of plastic to maintain the production of its products. Research and development for alternatives will be required for the company to remain relevant and sustainable..

References. Augustyn, Adam (March 3, 2023) LEGO Retrieved from https://www.britannica.com/topic/LEGO Cofino J (2015) Why Lego's CEO Thinks More Grown-Ups Should Play at Work. Retrieved from https://www.huffpost.com/entry/lego-and-the-power-of-play-to-transform-business_n_55d72809e4b020c386de52bd Financial Times. (2021). LEGO to invest heavily in sustainable materials. Retrieved from https://www.ft.com/content/d2e845f1-1484-4745-8e3e-4995ee85f772 Gemba (2016) 5 Sustainable Innovation Practices that Saved LEGO Thegemba.com. https://thegemba.com/article/lego-sustainable-innovation Gronholt-Pedersen, J. (2023, March 7). Lego looks to build on 2022 sales growth with more China stores. Retrieved from: https://www.reuters.com/markets/europe/lego-looks-build-2022-sales-growth-with-more-china-stores-2023-03-07/ Irish Times. (2023). Profit growth slows at Lego amid 'extraordinary' cost pressures. Retrieved from https://www.irishtimes.com/business/2023/03/07/profit-growth-slows-at-lego-amid-extraordinary-cost-pressures/ LEGO. (2023). 2022 Annual Results. Retrieved from https://www.lego.com/ru-ru/aboutus/news/2023/march/2022-annual-results LEGO (2023) About Us. Retrieved from https://www.lego.com/en-gb/aboutus/lego-group/the-lego-brand LEGO (2023) The LEGO Brand Retrieved from https://www.lego.com/en-gb/aboutus/lego-group/the-lego-brand?locale=en-gb LEGO (2023) Advocacy, Government Ethics, and Political Activity Policy Retrieved from chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.lego.com/cdn/cs/aboutus/assets/blt17488beb6e9bc1bc/LEGO_Group_Policy_on_Advocacy_Govt_Ethics_and_Political_ActivitiesFor_November_2022_publication.pdf LEGO Group. (n.d.). Who we are. Retrieved from https://www.lego.com/en-us/aboutus/lego-group/the_lego_group LEGO Group. (n.d.). LEGO leadership team. Retrieved from https://www.lego.com/en-us/aboutus/lego-group/leadership-team Murillo, DeAngelo (September 20, 2022) Everything Is Awesome: The Impact of Lego on Modern Culture Retrieved from https://www.thegeeklyfe.com/everything-is-awesome-the-impact-of-lego-on-modern-culture/#:~:text=The%20iconic%20brick%20has%20become%20a%20symbol%20of%20creativity%20and,with%20autism%20and%20other%20disorders . Ng, Y. J. (2020, December 3). LEGO’s success proves that marketing and branding is more than just producing advertisements. Retrieved from: https://www.linkedin.com/pulse/legos-success-proves-marketing-branding-more-than-just-yee-jian-ng/ Norris, D., & Ciesielska, M. (2019). Towards a framework for innovation orientation within business and management studies. Journal of Organizational Change Management, 32(1), 123–144. https://doi.org/10.1108/jocm-02-2018-0051 Statista (2023) Revenue of the LEGO Group from 2003 to 2022. Retrieved from https://www.statista.com/statistics/282870/lego-group-revenue/ Statista (2023) Average number of employees of the LEGO Group worldwide from 2009 to 2022. Retrieved from https://www.statista.com/statistics/292314/number-of-employees-of-the-lego-group-worldwide/ Stackpole, B. (2021, September 21). Innovating in existing markets: 3 lessons from LEGO. MIT Sloan. https://mitsloan.mit.edu/ideas-made-to-matter/innovating-existing-markets-3-lessons-lego The Boston Consulting Group (2017) BCG CEO Series: At LEGO, Growth and Culture Are Not Kid Stuff. Retrieved from https://www.youtube.com/watch?v=m9WOG7RS6nc MBA Skool Team. (2022, May 15). Lego Porter five forces analysis. Retrieved from: https://www.mbaskool.com/five-forces-analysis/companies/18411-lego.html Wikipedia contributors. (2023d). Lego. Wikipedia. https://en.wikipedia.org/wiki/Lego.

THANK YOU.