Essay about The Lego Group Analysis

1613 Words Jul 13th, 2013 7 Pages
BUSI 1484 – Managing Strategy

Portfolio 1

The LEGO Group Analysis

June 26, 2013

Word count: 1,517

Table of contents

Title | Page | 1. Application of the PESTEL analysis | 3 | 2. Application of the Porter’s Five Forces Analysis | 4 | 3. Application of the TOWS Matrix | 6 | 4. Conclusions | 7 | 5. Figure | 8 | 6. References | 8 |

In this assignment the LEGO Group are examined by using a PESTEL analysis (Turner, S., 2002,), Porter’s Five Forces framework and TOWS matrix, based on the information from the case study “The LEGO Group: working with strategy” by Anders Bille Jensen, University of Southern Denmark, and sources from internet.

Application of the PESTEL analysis:#1

CONTEXT | FINDINGS
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(3) Therefore, I think the threat is high in this stage since LEGO has little chance to bargain with oil companies and supplier.
Since 2008, LEGO has changed its strategy, to obtain licensed theme from filmmakers and book authors instead of developing products with their own designs. Although it has reached a huge success, however, the threats in this stage could be moderate to high because the supplier could raise the future license fee and even put them in auction or sell it to LEGO’s direct competitors.

2. BARGAINING POWER OF BUYERS

The bargaining power from buyers is high. The largest buyers of LEGO products are big retailers such as Wal-Mart or Toys”R”Us. Pressures putting on LEGO were significant from these companies due to their own problems. These chain retailers have the bargaining power on delivery times and retail price. That is, for instance, if LEGO does not supply the products efficiently during Christmas shopping season, these retailers could totally replace LEGO with other brands of toys on the shelves.

3. THREATS OF NEW ENTRANTS

Since the expiration of the last LEGO patent in 1989, the entry barrier to the market is almost disappeared. Although LEGO has superior popularity and strongest position in the construction toys market in the World. There are always some overseas toymakers trying to copy the successful way of LEGO, manufacturing the much cheaper look-alike LEGO in

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