Question

What is your assessment of the Lego management's move during "The Fix That Wasn't (1999-2003)" ?

Answer 1

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By the end of 2003, the Lego problem had already begun as profits dwindled and the toy market collapsed. It was intended to expand into foreign markets for Lego toys and requires a lot of investment. However, it is difficult for modem players and toymakers to compete heavily in low-profit markets every year.

Strategic measures in two key areas of " growth period that wasn't " (1993-1998) and "the fix that wasn't" (1999-2004) have resulted in poor performance.

The administration has changed its strategy for sustainable development and profitability with a focus on growth in 1993 and is trying to regain profit and development through a ‘fun program’ with various changes from 1999 to 2004. It shares strategies led by some of the top ten. principles.

The Lego team has tried to cope with market development today but ignores the fact that the overall industry profitability has dropped by 50% between 1999 and 2003. It is common for players to reduce productivity and focus on basic skills. However, the Lego team was heavily invested in expansion, not only in brick-and-mortar products but also beyond the brick-and-mortar.

In 1999, management decided to sell directly to consumers through two initiatives: an online store and LEGO retail stores in Europe and the United States. it was about meeting the customer in the right places, online and in our stores, and building the brand. Another reason was that we are working more and more with discount points that push us to their shelves. This made it impossible to show the richness of our brand. ‘Product developers argued that the number of different forms didn’t matter, as the marginal cost of an additional mold would low. And management did not see the impact of this on the design, production, service of retailers, inventory forecasting, and management Consumers The largest LEGO customers were irritated by inventory and slow-moving inventory.

The group grew by 28% in 1999 and returned to profitability in 1999, a drop in sales and a loss in 2000.

By 2003, it became clear that the new growth strategy was not working.