The future in the building toy market held both opportunity and uncertainty, with new threats emerging...

The future in the building toy market held both opportunity and uncertainty, with new threats emerging from increased control over licensing agreements, loss of trademark protection and competition fromTnew and existing sources. It was important for the LEGO management team to

(Question) "identify where to expand current product lines in order to help the company formulate a strategy to ensure that LEGO"

(which country should be the next one to expansion and why)

FYI.

At this moment, there are already 48 countries

Austria
Belgium
Brazil
Canada
Chile
China
Columbia
Costa Rica
Czech
Denmark(1st) (+Legoland)
Dubai (+Legoland)
England
Estonia
Finland
France
Germany (+Legoland)
Greece
Hungary
India
Ireland
Italy
Japan (+Legoland)
Korea
Latin America
Latvia
Lithuania
Luxembourg
Malaysia (+Legoland)
Mexico
Netherland
New Zealand
Norway
Panama
Peru
Poland
Portugal
Russia
Singapore
Slovakia
Slovenia
South Africa
Spain
Sweden
Switzerland
Turkey
United Arab Emirates
United Kingdom
United State (+Legoland)

Expert Solution

Lego is continuing to make significant investment in China and India. This is evident from the fact that even though there was an increase of 4 percent in the company's revenue for the year 2019, there was a decrease of 12 percent in it's net profit for the same year.

Still the company's CEO is satisfied with the performance as the company is looking forward to transforming it's strategy in order to explore this strategic growth market. The company's established markets like USA and the EU countries have registered single digit percentage increases in sales but the Chinese market grew in double digit percentage.

Hence the Lego group is planning to continue investing in China and have more than 140 stores in 35 cities by the end of the year. Apart from this, the company will open 70 stores outside of China in this financial year.

The company has opened its third-largest factory globally in the Chinese city of Jiaxing. This has put Lego in a position to supply it's toys not only in the Chinese market, but other Asian markets too, including Japan and South Korea.

Besides focusing on China, Lego is also planning to open an office in Mumbai, India this year and through this expand it's business further in India.

According to company, India is a growing economy with an high percentage of middle class population, which makes this investment worthwhile. They can reach out to a large number of middle class children in India who are the potential customers as due to the increased level of education in the country, toys like the ones Lego makes will be in huge demand there amongst the children.

keosha answered 7 months ago

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