The case concerns LEGO Group, which is a toy manufacturing company. The company had enjoyed a journey of highs and lows, but it managed to stand as an outstanding company in the toy industry. The company had been on a path of success for the best part of its existence since 1916 when it started as a company owned by Ole Kirk Kristiansen. The company had a wood workshop which began by building houses and furniture for farmers. Later, the company graduated to the manufacture of wooden toys, which can be counted on as the building block for the successful business in the toy industry (Rivkin et al 1).
However, the main issue with this case regards the new management or leadership of the company. The company had been run as a business company since it was founded. It has succeeded along the family line through inheritance in a family lineage. In the past, the company has been led by a number of CEOs who have been members of the founding family. Previously, it has been led by highly competent people who have navigated the company to the current level and beyond. However, the point of concern is the situation of the company as at 2004 where Jorgen Vig Knudstorp, who had been exposed to the leadership of the company, had been given an opportunity to lead LEGO Group. He was the youngest CEO ever in the company. There are a number of issues that were of concern since the individual brought some elements that have caused losses to the company. The concern regards the losses that the company was experiencing during the leadership of Knudstorp (Rivkin et al 1). There was a concern whether the young CEO could be causing the failure of the company.
In terms of competition, LEGO Group has been through all sort of competition. Companies are seeking an opportunity to enhance their performance in the Toy industry. However, the pet is friendly, but the vehicle is so easy to stop on the place through which I will walk. Competition is significant for the business growth through development of new ideas
Customers
LEGO Group targets very home with the child. The main customers for his products are parents who are seeking for a child gift. The customers must be convinced that the children want the toys. It is evident that every child loves toys. Therefore, the LEGO Group has a wide market for its products following the high number of customers (Rivkin et al 2).
Suppliers
The suppliers form a critical part of a company since they help in the production of the final products. They offer the raw materials which would be used for the production process, and they have to participate fully. They have to supply high-quality raw materials that are significant of the production of toys (Rivkin et al 3). It is evident that the company has enjoyed an outstanding group of suppliers in the past who have assisted in the production of the toys.
Potential entrants
It is evident that the market is not yet saturated. The demand for toys does not fall with time. Instead, customers are looking for new and better ideas implemented in the field. Therefore, new toy companies are coming up wishing to offer the latest toy models that match with the demands of the customers (Burrow and Brad 34). As such, it is difficult to control the entry of new companies as manufacturers of new models of toys.
Substitutes
There are a number of products that other companies are trying to come up with in the bid to withstand the competition that the toys have bestowed upon the companies. Therefore, it would be dangerous to assume that the there are no better products that companies are giving in the name of better elements than toys for entertaining children. Substitutes are highly critical as they help in keeping the LEGO Group in a dynamic state.
Strategy of the company
It is evident that leadership is a critical tool for the success of an organization. The company has been trying to influence its performance or change its navigation course by having a clear path to leadership. The company has been maintaining the leadership or the management of the company in one family since there was a belief that as a family business, it needed the effort of the top leadership to achieve excellence (Rivkin et al 3). The leadership would be required to participate in decision-making processes which would encourage creativity or innovativeness (Burrow and Brad 45).
LEGO Group’s strengths and weaknesses
The first strength of the company is an outstanding leadership structure. The organizational structure of the company is well outlined with duties flowing accordingly, making the company reliable in the execution of its duties. The process of undertaking the duties is efficient. Also, the company has an innovative team, which helps in the continuous improvement of the products and withstanding the competition in the industry. The company also produces toys in line with the current trends or issues that are happening on TVs and other gaming activities thus fetching a wider market (Rivkin et al 4).
On the other hand, there are weaknesses. The first weakness is the lack of a strategy to hire competent leaders who are not part of the founding family. The overreliance on the leadership from the family manipulates business activities of the company. Also, the company takes massive time before adapting to change, which may be necessary for business growth. The company also hires inexperienced leaders without the adequate exposure to help in handling technical matters regarding the management or leadership in the affairs of the company (Rivkin et al 4). Also, the company has not been able to set a specific target for the market that would assure it sales and improvements in performance. The company has not captured a specific physical market (Burrow and Brad 53).
Competitive advantage
The company has an upper hand over other companies by experience and exposure to the business for a longer period. As such, the company has managed to accrue a repetition that would make it easy for it to sell its toys. The long exposure also comes with a pool of finances, which is useful in defining strategies that the competitors cannot match easily. The long experience puts the company into extensive research bringing in more knowledge on the facts and how a number of things should be done in the company (Rivkin et al 5).
Recommendations
The first one is to ensure the company hires competent leaders. The company needs to the family embedded form of leadership since self-interests for individuals in the company are likely to lead to selfish appointments which will not bring the needed transformation.
Secondly, the company needs to improve its research and development programs. There are a number of changes that are happening in the market, and it is wise to ensure the company remains informed of the changes.
Thirdly, the company needs to change its communication strategies. There needs to be proper flow information within the company. The company will remain well-informed of business activities, and t will be very easy to exchange ideas for the improvement of the company.
Works Cited
Burrow, James L, and Brad Kleindl. Business Management. Mason, US: Cengage Learning, 2012. Print.
Rivkin, Jan, Stefan Thomke, and Daniela Beyersdorfer. "LEGO (A):The Crisis". Harvard Business School 731.478 (2016): 1-9. Print.
