The success of the Lego company has increased over the years. How Lego became successful is a story that most companies have come to abduct. The company also had its fair share of hard times but used a strategic method and climbed their way to success.
How Did Lego Become Successful? The success of the Legos began with the appointment of Jorden Vig Knudstorp as CEO. Although it was a risky decision, Jorden had taken the company back to its core products ‘the bricks’. With the company’s focus restored to the bricks, Jorden abducted strict management controls.
Jorden indulged the production of the Lego bricks as its core product and stopped the selling of the park theme and brand stretching.
Management controls such as the reduction in the number of different pieces of bricks from 12,900 to 7,000 were abducted.
Legos had been ranked as one of the most successful and innovative toy companies in the world.
It is also rated as one of the world most powerful brand but in 2003 the company was on the verge of collapse with a debt of almost $800 million.
There were plenty of comments and books on how the company climbed out of bankruptcy. The company’s approach and methods used in turning around their fortune are spectacular and impressive.
What Are The 9 Strategic Steps That Made Lego Became Successful?
The success story of the Lego company came to being due to steps taken by the company and its CEO to overcome their own share of a hard time. Here is the basic analysis of the method the company employed.
1. The Appointment of a New CEO:
Although Jorgen Vig Knudstorp was new in the company, he was appointed the CEO. He had only entered the company in 2001. After three years, he was appointed CEO.
He created a sense of urgency that made the workers understand the dire state of the company. By doing that, he made them want to survive the hard times.
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2. Focus on the Core Product:
The new CEO made the company focus more on its primary product, bricks. Mr. Knudstorp sold most of the theme parks and overseas properties. The company created more innovative core products.
3. The Streamlining of Operations and Cutting Cost:
This step was a major one for the company. The inventory was drastically dropped and a number of parts were cut by half from 13,000 to 6,500.
Production operations were outsourced to Mexico and the Czech Republic. The headcount was also cut down to 4000 in Denmark.
4. Customers Were Involved in Innovative Designs:
Fans and enthusiasts of the company helped the company by suggesting and voting new ideas of new models. Prices were given to those that contributed to the winning models. They were award 1 percent of the bricks sales revenue.
5. Quick Prototyping:
This strategy was one of the coolest. The company’s head of marketing department said “ We only develop a few key features that are needed and typically engineering mistake is wanting to invent all the things the product will require at once.
We throw the prototype into the market and get feedback from the consumers.” Although this method has been abducted by most companies, the Lego company was among the first to adopt the idea.
6. Users’ Actions:
The Lego Company did a study on the users of their product in 2011 and found out that 91% of its users were boys. They carried out a detailed study to understand why their major users were boys.
They looked at the difference between boys and girls play. In 2012, the Legos launched the ‘Lego Friends’ which had a realistic mini-doll. This tripled its sales to girls.
7. Collaborative Innovation:
The Lego began a bright marketing strategy by licensing Stars’ characters and vehicles. The union made huge profits for the toy company and commenced video games and short films that become very famous.
8. Video Innovation:
The Lego company invested huge sums in great quality movies. The Lego Batman movie lasted more at the box office than the normal Batman movie.
Each of their movies created sales of models. In 2014, the approval rating on Lego movie ‘Rotten Tomatoes’ was 96%. The investment in quality movies paid off.
9. Startle the Culture:
Before Knudstorp became the CEO, the company focused on producing quality old-fashioned toys. When he stepped in, he changed the cooperate culture to creative and innovative toy products. This total transformation moved the company.
What Are Lego’s Most Famous Bricks?
This was the company’s first hybrid digital-physical experience launched in 1998. Adult fans were brought in for the design process.
It is a global hit. It was first launched in 2007 in Chicago and launched worldwide in 2009. The idea originated from a local architect in Chicago who made a replica of the Sears and Hancock towers with the Lego bricks.
It originated from amateur designers’ ideas, which fans voted on. It was launched in 2008 in Japan and worldwide in 2011.
This line was first launched in England and Germany in 2009 and then launched worldwide in 2010.
It started with a board game of 20, which included Lava Dragon and Pirate Code. Other ideas were incorporated but the line was discontinued in 2013.
Life of George:
This line of Lego bricks was launched in 2011 in the U.S. and launched worldwide in 2012. The game was targeted at families. It is a puzzle game.
It has special features such as the combination of bricks with a smartphone App. The company was able to combine the digital and physical play world.
The fusion line is an evolution of the Life of George. It has three kits which are Town Master, Battle Towers and Resort Designer. This line has a similar experience with the Life of George.
Further studies are ongoing to improve the experience for users. This Lego bricks line was launched in 2013 in the U.S.
What are the most Sold Lego’s Bricks?
The most popular Lego’s brick has been said to be the Millennium Falcon of Star Wars. Which is followed by the Hogwarts castle from Harry Potter.