Business Strategy - LEGO

Table of Contents
1. The process of strategic planning.......................................................................................2
1.1 Strategic contexts and terminology..................................................................................2
1.2 The issues involved in strategic planning.........................................................................3
1.3 Different planning techniques..........................................................................................4
2. Formulating a new strategy................................................................................................5
2.1 The organizational audit for LEGO..................................................................................6
2.2 Environmental audit for LEGO........................................................................................7
2.3 Significance of stakeholder analysis................................................................................8
3. Approaches to strategy evaluation and selection..............................................................10
3.1 Alternative strategies relating to substantive growth, limited growth or retrenchment. 10
3.2 Appropriate future strategy for the LEGO......................................................................11
4. Implementing a chosen strategy.......................................................................................12
4.1 Roles and responsibilities for strategy implementation..................................................12
4.2 Resource requirements to implement a new strategy.....................................................13
4.3 Strategies for monitoring................................................................................................14
Conclusion14
References............................................................................................................................15

Business Strategy - LEGO

1. Strategic planning as a process

Strategic planning is essential for all organizations. An in number comprehension of the

methodology of Strategic planning is basic for positive application. LEGOs mission, vision,
objectives, goals and core competencies, the matters convoluted in strategic planning
furthermore the dissimilar planning routines are all talked about here.

1.1 The contexts and terminologies of strategic planning

Johnson et al (2011) fair depicts method as the longstanding way of an organization or

association. As indicated by this definition, the procedure has long-standing course of
accomplishing authoritative goalmouths. For instance, LEGOs aims can be recognized as
client relationship administration, operational magnificence and advancement. With LEGOs
potential clients being kids, the group is sharp in creating propelled systems and thoughts and
creating toys that would coordinate the current I.Q of the kids. These functional techniques
can be perceived as the long haul headings of LEGO.
The mission assertion aims to suggest employees and shareholders with clearness around the
superseding determination of the association (Johnson et al, 2011). For instance, the mission
presentation of LEGO can be distinguished as takes after:
1. A definitive reason for LEGO is to be moving and developing kids for speculation
inventively, thinking methodically and discharging the potential for shaping up to business
their own particular future, with the experience to interminable human probability.
2. Inspire and build up the developers of tomorrow, conveying the quality to the clients who
are the architects without future era.
3. Trying to stand out with negligible contenders, expanding the imagination and thoughts to
create intrigues in kids.
Vision: Developing the future of play. The vision announcement of LEGO is to precursor
new directs of playing, play assets and the business reproductions of play - utilizing
digitalisation and globalization, its not about the items alone, it is around understanding the

Business Strategy - LEGO

social plausibility. Vision presentation of the enterprise ought to react to the inquiry of what
would it be advisable for us to need to be accomplishing? (Johnson et al, 2011).
Objectives are pondered as the expected results of the association. For instance, LEGOs
most astounding target is to achieve beneficial development, satisfying the necessities of the
kids. Objectives of LEGO are as per the following:

To get 100% commitment from everyone in the gathering

To extend all individuals time to consider before they express
To catch and be gifted to raise each individual's selective vision on the subject being

pondered
To get all benefactors to "venture up to the plate" and be section of the discussion and

official
To utilization behaviours of working together that advantage everyone to express their

conclusions and dreams

To advantage the listener comprehend and review what is being assumed and to

minimize the threats for errors and miscommunications

Not to errand one particular style of declaration
To advantage all givers concentrate on the reminder, not the emissary.

The goalmouths clarify the mode in which the organization is going to perform its mission.
Industry goalmouths and purposes can be perceived as comparable thoughts.
Core competencies differentiate the association from its candidates. Administrations, assets,
and doings which cant be duplicated by different contenders can be perceived as core
competencies of the organization. LEGO has various core competencies and it has instructed
to achieve the unassuming point of interest over the access possessions
1.2 The issues that are involved in the process of strategic planning

Sadler (2003) portrays strategic planning as the system of schematised, orderly, procedure to
progress an associations policy. This strategic planning incorporates with various subjects
and Sadler (2003) has perceived five (5) fundamental issues which incorporate with planned
improvement in particular, perplexing strategy with the tactical arrangement, lack of
engagement from reality, loss of motion by examination, absence of ownership, and lessening
of creation.

Business Strategy - LEGO

There can be misjudging with the predominant methodologies at the time of strategic
planning. Directors may touch that the strategic planning is the readiness of same strategies
which they are dedicated at this point. Likewise objectivity from authenticity is additionally
extra issue. Sadler (2003) challenges that strategic planning is a wise system and it
remunerations to the credibility of procedure. This basically happens following of the
nonattendance of support for the strategic planning of workforces. The following subject is
loss of motion by examination. This compete that planned scheduling can be over-nitty gritty
as a result of the broad investigation. Nonappearance of possession is another unruly. A large
portion of approaches are ponder by the business arranging subdivision or by the most
established organization. Therefore, it can be fought that planned readiness does not have a
broad spread of ownership inside of the organization. The last contradiction is that strategic
planning is reducing of insurgency. This basically happen in the mean time strategic planning
acquaints numerous extreme controls to the organization and it limitations the suppleness of
the association (Sadler, 2003).

1.3 Different types of planning techniques

As Wittmann and Reuter (2008) explain, key arranging can be varied rendering to the
structure. Accordingly unique strategic planning methodology are attractive for divergent
settings. Considering the overhead conditions Wittmann and Reuter (2008) has introduced
five strategic planning methods, particularly, skill determining, instruction planning,
developing strategy planning, and management planning and decentralized appearance
planning.
Knowledge planning can be useful if the authoritative environment is relentless. This
prototypical is also fitting for irrelevant associations. Especially the proprietor of the
association marks the strategic plan. The extra methodology is dictate planning. This is
suitable for awesome unfaltering associations yet not very multifaceted. The top organization
of the association is entangled with these strategic planning. Under this procedure, the
organizational environment is lengthily analyzed. On the off chance that the association is
extra tempestuous and multifaceted the strategic planning is appropriate. For this humane
association, the strategic planning is more noteworthy. The following method is the creating
technique arranging. This execution is additionally more fitting to a massive affiliation,
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Business Strategy - LEGO

which has more multifaceted organizational environment. These assortments of strategic
planning are finished by the commercial strategic subdivision or by squad of specialists
(Bryson, 2011).
The LEGOs strategic planning process is more nearby the up-and-coming methodology. The
LEGOs regulatory surroundings is more composite and need more thought for the strategic
planning to propel the economical improvement. At the point when completely investigate
LEGOs key course, it is dynamic that the organization is get ready to broaden their business
extra to the overall business. In this manner, developing strategy planning is more suitable to
LEGO.
M3
LEGOs aim, mission, vision, and core competencies are all pointed and outstretched to get
the consideration of its clients, which are kids.
The fundamental intention of LEGO manages satisfying the kids desire in inventiveness in
light of the present pattern in the level of IQ of the children.
LEGO with the intend to make future fashioners, raise up taking after arrangements of
methods that are obviously arranged and executed by the organization.
Strategic Planning of LEGO is viewed as fruitful as they have recouped the misfortune from
the money year 2003-2004 of around 400 million dollars. With the right set-up of methods
and executing the arrangements, LEGO had the capacity overwhelm VASBRO in the year
2012.

2. Formulating a new strategy

To express new methodologies for a hint, an obvious understanding of the macro and micro
environment of the organization is essential. Keeping in mind the end goal to get an
impression about these two environment, SWOT and a PESTEL analysis can be utilized.
Further, Michael Porters five-power analysis is another key point that can be utilized to
analyse an industrys macro environment.
2.1 The organizational audit for LEGO

Business Strategy - LEGO

As said over a SWOT investigation can be utilized to investigate an associations
microenvironment. Further, it can be stretched out to discuss large scale environment also
(Thompson, 2001).
Strengths

The strengths of LEGO are discussed as follows:

LEGO was found in Billund, Denmark in 1932 and today it is a worldwide Company

and serves clients (Children) in more than 200 nations around the globe.
In the first portion of 2014 the Lego Group turned into the world's biggest toy

organization by business sector quality, surpassing Mattel.

LEGO is viewed as the speediest and most solid supplier of Children toys that would

fortify and build up the kids knowledge.

Uses learned innovation
Has a devoted and an amazingly prepared staff for industrializing and conveying.
Obviously expressed procedures, measures, endeavours, visualizations, approaches,
aims, and so on:

Overhead said are generally the metiers that LEGO has. Being a profound established
association in the Childrens toy industry, LEGO has endless qualities, best perceived for the
generation of Lego brand toys, which are not impacted by different troupes in the business.
Weaknesses

Being a profound established association and as an affiliation which conserve a

healthy organizational environment, all around prearranged methodologies,
endeavors, visualizations and purposes, LEGO can be measured as an association

with a minimum amount of shortcomings.

The intrinsic shortcoming of the business, for example, engaging in an industry where
security, transportation, promptness, and so forth can be taken as intrinsic where these
variables can be modified and overstated rapidly by environmental, wellbeing, and so
on.

Opportunities

LEGO is an organization that process internationally. Hence, it has various chances to

augment its operations.

Business Strategy - LEGO

Expansion of toys alongside the authorisation to extend all around with the sustenance
in the movement of correspondence and transport innovation licenses to be spread and
impact better, universally.

Threats

Threats those are overwhelming in the business are suitable to LEGO also. The strong
points of the organization have been responsible for LEGO to be impervious to loads

of outer intimidations.
There is a brutal enmity in the market place, at the present pattern.
The trademark threats of the toys business, for example, rivalry, pattern, related
dangers, security of products, and so on can be considered.

2.2 Environmental audit for LEGO

An environmental audit versatilities learning about the environment that one industry
processes. LEGO is a organization, which works universally. Thus, the organizations
surroundings is an overall situation. PESTEL components incorporate political, financial,
social, technological, environmental and legal factors elements (Thompson, 2001).
At the point when talking about political variables, the LEGO process inside of various
political confinements. Consequently, at times persuaded political limits will allow
associations like LEGO and infrequently some wont.
Economic components are discriminating for a organization like LEGO. Overall monetary
conditions, for example, downturns and financial circumstances irregular to republics, for
example, trade charges are noteworthy when work globally.
Social issues when an association functions globally are most incredulous of issues in the
PESTEL issues. Civilisation shifts from republic to republic, zone to zone and civic to civic.
Subsequently, LEGO should have to take into various public issues when it starts to its
promoting, report, and even distribution services. The personnel have to be skilled in
approaches to meet these unique social elements. This makes it solid that common issues are
huge for any organization.
Technological issues are essential for organizations like LEGO, which altogether relies on
promoting and the impact of kids. Most current developments and advancements in kids toys
industry can be demoralized by LEGO to convey its services to the clients in the best way.
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Business Strategy - LEGO

Ecological issues are noteworthy in todays business world, in the mean time the accentuation
is on sufferable development. Consequently, as a globally responsible organization, LEGO
should talk different natural issues that have a result on its authoritative presence.
Legal issues differ from republic to republic. This makes it solid that an organization needs to
face various legal plans that may exasperate the relationship in divergent ways.
Thus, it is dynamic that an extreme seeing around the macro environment of the organization
is important when it starts to all the elements of the association.

2.3 Significance of stakeholder analysis

Shareholders are essential for any company. Shareholder can be divided as a revelry that
troubles or can be misrepresented by the developments of the business (Lynch, 1999).
Shareholders can be government, representatives, clients, suppliers, leasers, group, exchange
unions, and so forth (Thompson, 2001).Shareholder contains a whole cluster of bashes, which
are basic for a company. Henceforth, when new systems are to be built up for an organization,
a clear comprehension of its shareholders is vital. So as to pick up data on an organizations
shareholders, a shareholder investigation should be possible.
Shareholder investigation can be all around characterized as a strategy that can be utilized to
distinguish and evaluate the significance of key individuals, gatherings of individuals, or
foundations that may fundamentally impact the achievement of an association (Thompson,
2001). As Lynch (1999) focuses out there are various thought processes in the matter of why
an organization should meet a shareholder investigation. As Lynch (1999) says, they are:

To perceive individuals, groups, and establishments that will influence the

developments of the organization (either definitely or adversely)

To hinder the sort of motivation, hopeful or cynical, these groups will have on the

organization
To progress methodologies to get the best agent sustenance possible for the affiliation
and to abatement any confusions for the useful moves of the organization

Numerous scholastics have rough out the reputation of doing a shareholder examination. As
per Wilson and Gilligan (2005) compensations of doing a shareholder examination can be
demonstrated as takes after:
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Business Strategy - LEGO

The organization can utilize the estimations of the most powerful shareholders to
figure the organization and its resourceful activities at an essential stage. This
protections sustenance and additionally the perfection of the organization. Attaining
sustenance from influential shareholders can help the association to win more

possessions.
Attaining sustenance from powerful shareholders can help the relationship to win
more belonging

This makes it clear that a shareholder examination is essential for a company to process
solidly.
M2
PESTLE examination has numerous points of benefits when contrasted with Michael Porters
Five Forces. A percentage of the benefits of PESTLE are:
Delivers an unassuming and simple to-utilize diagram for investigation.
Incorporates cross-useful administrations and learning.
Helps to abatement the impression and belonging of likely intimidations to the association.
Helps and moves the extension of vital thinking inside of the association.
Delivers a contrivance that permits the association to order and deed new events.
Permits to assess intimations of entering new commercial marketplaces both countrywide and
universally.

Some of the disadvantages of PESTLE are:

Administrators can over generalise the material that is utilized for making choices.
The methodology must be went hand in hand with routinely to be agent and much of the time
associations dont make this sort of ventures.
There are certain considerations for Michael Porters Five Forces.
Michael Porters Five Forces considerations are:

Stride of change is presently a-days more quick.

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Business Strategy - LEGO

Market structures were seen as nearly static.

The model conveys with just a depiction of the earth.
It can be tricky to portray the business
The model does not think non-market administrations
The model is most proper for examination of straightforward business sector

structures
The model is grounded on

3. Approaches to strategy evaluation and selection

An organization should develop its business at whatever point possible. Various behaviors
and methodologies can be utilized to extend an organization. In this section, possible
methodologies for advancement of LEGO are taken into discussion. Further, a suitable future
methodology for LEGO is anticipated.
3.1 Alternative strategies relating to substantive growth, limited growth or retrenchment

As Thompson (2010) assigns, the utilitarian advancement systems are affected through two
leading issues. Those are merger and acquisition. Merger is the amalgamation of two
beforehand scattered administrations, typically as pretty much equal accomplices (Johnson et
al, 2011). The LEGO can possibly instrument merger as a useful development system on
account of its quality in the commercial center. The accomplishment incorporates one firm
enthralling over the ownership of another (Johnson et al, 2011). This useful methodology also
can be utilized by LEGO since it has more power at the marketplace in the business.
Thompson (2010) presents joint wander as halfway advancement. At the joint wander, two or
more organizations are shared the proprietorship. In the joint endeavor, for the most part the
reasonable advantage is slender. Since LEGO has more market partition in the business, it is
not sensible for restricted development system.
Retrenchment is dependably a counteractive activity. These counteractive moves are made at
the phase of the insufficiency, financial downturn, or solid contention. If there should arise an
occurrence of insufficiency, the organization needs to take three economising methodologies
in particular resources decreasing system, expense diminishing procedure and revenue
generating strategy.

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Business Strategy - LEGO

3.2 Appropriate future strategy for the LEGO

The human asset of the LEGO is one of the perilous assets, which overlay the route for
achieving modest advantage. Then again, LEGO has perceived that there is a requirement for
further creating of necessities of its representatives to contend in the turbulent commercial
center. These ability improvements of representatives will lead for quality administration
lastly it will hold to pick up the upper hand careful accessible assets (Wilson and Gilligan,
2005). The point of the LEGO is to make unrivalled profit and performance. LEGO has
recognized those regions as methodology gaps of the association.
Considering the above strategic circumstance, interactive methodologies for the LEGO is
suggested. These interactive techniques will be the future vital headings of the LEGO. The
reason behind the intuitive methods is picking up the upper hand by taking a gander at the
contenders systems. In this association, the LEGO will need to give careful consideration to
interactive cost and quality strategies, interactive strategies, cooperative strategies in hypercompetition, and game theory. As indicated by the intelligent cost and quality, techniques the
LEGO will need to give best cost and quality to their clients. The interactive systems in
hyperactive- rivalry will say how LEGO can face to the hyper-culmination and increase upper
hand. Joint effort between a few associations in the same business will prompt accomplish
game changer. Cooperative strategies will help this joint effort for LEGO. At long last,
diversion hypothesis additionally include with contender developments. Especially
amusement hypothesis is reactions for the contender developments of the commercial center.
Thus, LEGO should follow interactive strategies as it future strategies.
M1
LEGO can receive to the procedure to find production near to its core markets, including
business sector penetration and business sector improvement of the gathering. This would be
prompting an extra extension of the Kladno manufacturing plant in the Czech Republic,
which would bring about utilizing more individuals.
D1
In a financial slump, LEGO can adopt with the interactive methods which will thus turn into
the future headings of the LEGO group. Communication with the worker might also realize a
noteworthy change actualizing in development. The workers may be sans given toys for their
kids to play with and figure out which is the most fascinating toy and examine it.
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Business Strategy - LEGO

4. Implementing a chosen strategy

Whatever the procedure that is planned, implementation of it is the most discriminating stage.
Legitimate ways and strategies should be exploited so as to match the plan furthermore the
effective execution of the plan. In this area of the task, the main focus is the same. Along
these lines, roles and responsibilities for strategy execution is analyzed, assets prerequisites
furthermore targets and timescales for accomplishing them is examined.
4.1 Roles and responsibilities for strategy implementation

Sadler (2003) presents three primary roles of strategy implementation. Those parts are
imagining future technique, adjusting the association to deliver that method and
encapsulating change.
The primary role is imagining future technique. This part include with clear conveying the
technique to inner and outside gathering. The inward party incorporates the association and
the outer party is incorporates all partners. The following part is adjusting the association to
deliver the method. Under this part, it is normal that all individuals in the association be
focused on the method. These individuals ought to be inspired to take after the system and
ought to be enabled to convey the change. The last part is exemplifying change. The strategic
implementation is highly involved with the authoritative change. Consequently, vital pioneer
has a noteworthy part of taking after strategic change process.
As per Sadler (2003) the responsibility of strategy implementation have to be taken by two
fundamental gatherings. Those two gatherings can be recognized as middle supervisors and
outcasts. Middle supervisors have been recognized as the implementers of top
administrations strategic plan. The responsibilities of the top-administration have three
fundamental zones. Those principle zones can be distinguished as sense making of system,
reinterpretation and conformity of key reactions, and counsels to more senior administration.
Outsiders have more responsibilities regarding strategy implementation. Particularly as
outsiders, experts and different partners have more responsibilities. Advisor dependably
serves to plan the vital for the change process. Partners have responsibility as strategy
implementation operators in the association.

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Business Strategy - LEGO

4.2 Resource requirements to implement a new strategy

At the execution of the strategy, the assets allotment is imperative. These assets requirements
can be contrasted starting with one association then onto the next and one method to another.
It is clear that the authoritative environment and nature of assets decides the assets
requirements (Coulter, 2001).
As examined over the LEGO should actualize intuitive techniques to face to the future rivalry
of the business. Hence, LEGO needs three primary assets for executing these methods. Those
are physical assets, individuals assets, and initial start-up expense.
The physical assets are comprised with production assets, finance resources and promoting
assets which requirement for executing intuitive methods at LEGO. Since, these intuitive
techniques fundamentally concentrate on the quality enhancements of the LEGO item, it is
fitting to designate more physical asset for the quality develop. Individuals assets also a
noteworthy prerequisite for strategy implementation. LEGO should build up their HR by
actualizing all the more learning and advancement exercises. At long last these all these
strategy implementation procedures are included with initial start-up expense and LEGO
should designate fitting fund for these implementation activities.

4.3 Strategies for monitoring

Johnson et al (2011) presents three fundamental criteria and strategies which can be utilized
to screen a methodology specifically suitability, adequacy and practicality. Suitability is that
survey whether proposed techniques address the key issues. Agreeableness measures whether
proposed techniques meet the desires of partners. Likewise achievability is measured whether
technique could work with practically speaking.
As examined over LEGOs future procedures will be intuitive techniques. These interactive
procedures can be observed by the suitability criteria. Under this basis it can be checked that
whether LEGOs interactive techniques address the key open doors and requirements in the
association face. Worthiness model can be utilized to screen whether actualized system meet
the desires of partners. Under this model the danger and return additionally checked.
13

Business Strategy - LEGO

Possibility measures whether procedure work practically speaking. Further, practicality can
be utilized as to check the objectives of the implemented strategies. For an occasion, it can be
utilized to quantify the finical focuses of LEGO by executing interactive techniques.
Conclusion:

LEGO is a critical and uncommon lesson for designers and design strategists on the
genuine significance of outline and inventiveness in an association. It additionally
demonstrates that numerous present plans of action dont put plan and innovativeness in their
perfect place in the hierarchical procedure. Subsequently, a considerable lot of those plans of
action can prompt disappointment, particularly for an organization that depends so vigorously
on imagination and advancement, as LEGO. In many organizations, designers and design
managers are not welcomed to help imagine the corporate procedure Maybe, putting design

and development in the opportune spot can lead an organization to accomplish its business
objectives and general technique.

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Business Strategy - LEGO

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