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LEGO Case Study

Case studies are an essential learning strategy in business classes as they provide an opportunity for you to critically analyze events that have taken place in real-life businesses. This develops your critical thinking and research skills as you research the competition and industry in which your business resides in order to formulate a recommendation for the challenges faced by the company.

For this unit, review the Marketing Spotlight: LEGO case study in Chapter 5 of your textbook. This assignment will be comprised of two parts; one part will ask you to respond to questions, and the other will require you to complete a case analysis.

Part 1
Evaluate this case and respond to each of the following questions using both theory and practical managerial thinking.

How does LEGO manage to constantly reinvent its business?
What role did marketing research play in LEGO’s market success?
What differentiates LEGO from its competitors? Is LEGO’s competitive advantage sustainable?
Review any potential ethical implications with LEGO. How are they aligning with good ethical practices?
Your Part 1 response must be at least two pages in length. Follow APA Style when creating citations and references for this assignment. Note that you will submit Part 1 and Part 2 in one document.

Part 2
Complete a case analysis of LEGO. This requires that you conduct research on LEGO beyond the case study material in the textbook. In the case analysis, you will look at the situational analysis, problem, and alternatives, and you will provide a recommendation. Refer to the instructions below as you construct your analysis.

Situational Analysis

Discuss the external environment through the compilation of a PEST (political, economic, sociocultural, and technology) analysis.
Discuss the internal and external environment through the compilation of a SWOT (strengths, weaknesses, opportunities, and threats) analysis.
Problem

Identify at least one organizational problem that LEGO is currently having or one that you project it will have in the future. Base this on your research and critical thinking.
Alternatives

Compile three or four potential marketing-related solutions to the problem above. Remember that these are potential alternatives; you will not select all of the alternatives to solve the problem.
Recommendation (Marketing Strategy)

Select one or two of the alternatives above to solve the problem that you identified in this case analysis.
Discuss your rationale for choosing these and not the others. Include supporting research that will increase the depth of your analysis.

Sample Answer

How does LEGO manage to constantly reinvent its business?

LEGO manages to constantly reinvent its business by:

Listening to its customers: LEGO conducts extensive market research to understand the needs and wants of its customers. This information is then used to develop new products and services that meet those needs.
Investing in innovation: LEGO invests heavily in research and development. This allows the company to create new and innovative products that keep its customers engaged.
Embracing change: LEGO is not afraid to change. The company has adapted its business model over the years to meet the changing needs of the market.

Full Answer Section

What role did marketing research play in LEGO’s market success?

Marketing research played a critical role in LEGO’s market success. The company used market research to:

Identify its target market and understand their needs and wants.
Develop new products and services that meet those needs and wants.
Position its products and services in the market.
Price its products and services competitively.
Promote its products and services to its target market.

LEGO also used market research to track its progress and identify areas for improvement. This allowed the company to make necessary adjustments to its business strategy and ensure its continued success.

What differentiates LEGO from its competitors? Is LEGO’s competitive advantage sustainable?

LEGO is differentiated from its competitors by its strong brand reputation, its high-quality products, and its innovative business model.

LEGO’s brand is one of the strongest in the toy industry. Children and adults alike recognize and trust the LEGO brand. This gives LEGO a significant advantage over its competitors.

LEGO’s products are also of the highest quality. LEGO bricks are made from durable materials and are designed to last. This is another advantage that LEGO has over its competitors.

Finally, LEGO’s business model is very innovative. LEGO is constantly developing new products and services, and it is not afraid to change its approach to meet the changing needs of the market. This gives LEGO a significant advantage over its competitors.

LEGO’s competitive advantage is sustainable because it is based on its strong brand reputation, its high-quality products, and its innovative business model. These are all factors that are difficult for competitors to replicate.

Review any potential ethical implications with LEGO. How are they aligning with good ethical practices?

LEGO has a strong commitment to ethical business practices. The company has a code of conduct that all employees must follow. This code of conduct covers a wide range of topics, including:

Human rights
Labor standards
Environmental protection
Business ethics

LEGO also has a number of initiatives in place to promote ethical business practices. For example, the company has a fair trade program that ensures that its suppliers meet high ethical standards. LEGO also has a program to reduce the environmental impact of its products and packaging.

LEGO is aligned with good ethical practices in the following ways:

The company has a strong code of conduct that all employees must follow.
LEGO has a number of initiatives in place to promote ethical business practices, such as its fair trade program and its environmental program.
LEGO is a member of the Ethical Toy Program, which is a program that promotes ethical practices in the toy industry.

Part 2

Situational Analysis

PEST Analysis

Political: The political environment in which LEGO operates is generally stable. However, there are some potential political risks that could impact the company, such as trade wars and changes in regulations.

Economic: The global economy is currently facing a number of challenges, such as inflation and supply chain disruptions. These challenges could impact LEGO’s sales and profitability.

Sociocultural: The social and cultural environment is constantly changing. LEGO needs to be aware of these changes and adapt its products and services accordingly. For example, the company has recently introduced a series of LEGO sets that are designed to appeal to girls.

Technology: Technology is rapidly changing the toy industry. LEGO needs to continue to invest in innovation in order to keep its products and services competitive. For example, the company has recently introduced a number of digital products, such as LEGO Life and LEGO Boost.

SWOT Analysis

Strengths:

Strong brand reputation
High-quality products
Innovative business model
Global distribution network
Loyal customer base

Weaknesses:

High prices
Limited product range
Reliance on brick-and-mortar retail stores

Opportunities:

Growing toy market in emerging economies
Increasing demand for digital toys
Growing popularity of STEM education

Threats:

Competition from other toy companies
Rising costs of raw materials
Economic downturns

Problem

LEGO is facing a number of challenges, including:

Rising costs of raw materials

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