Main Innovations Lego Company Introduced which Made It the Pioneering Company - Case Study Example

Title: Lego Company Name Institution Date of Submission Main innovations Lego Company introduced which made it the pioneering Company Lego Company made several innovations in its development as a leading producer in the construction of children’s creative products. It also created attention to not only children but also a good population of adult users. Its early products included piggy banks, wooden pull toys, trucks and cars made the company successful. However, major innovations which made a turning point to the company’s achievements were experienced after the production of plastic toys. These included cars, trucks and also trains which could be easily dismantled and re-assembled using interlocking parts (Mohapatra, 2013). The parts of their designs were prepared from cellulose acetate but maintaining its early methods of designs by use of holes and studs. The stiff competition and customer desires pushed for better innovations and growth of Lego Group. They further improved the building system which used the interlocking bricks instead of using fasteners such as studs and holes. The company had a unique tradition of interacting with its customers to identify their expectations and improvements they anticipated. This aided in architectural innovation of different designs to be generated, therefore attracting more customers. It reached a time when the company completely stopped producing wooden toys and majorly concentrated in making plastic interlocking bricks and other products (Mohapatra, 2013). In the year 1968, the company developed a theme park that displayed small towns with different kinds of features made from Lego bricks. The site attracted more than 600,000 visitors in the first year of use. This provided a clear direction of growth for its architectural innovation in order to provide better expansion routes for the company. The company further developed a ‘Duplo bricks’ which are large simple bricks for younger children and complex and sophisticated gear with axles, joints and other detailed features for older Lego products customers. All these products considered interchangeability making its manufacture cheaper and faster (Mohapatra, 2013). Additionally, to increase its market share, the company added other features such as wheels, colors and sound systems to their products. The also changed the material used to acrylonitrile butadiene styrene (ABS) plastic instead of using cellulose acetate which is more available and has better characteristics. This innovation increased the quality of Lego’s products. In the 20th century, Lego was ranked on the top ten toymakers worldwide. The wide range diversified products enabled it to gain popularity among the customers. These product varieties included model cars, train sets and simple robotics that are highly sophisticated. The toys also have more special features such as programmability and controllability. Furthermore, Lego users have enjoyed a long time tradition of new innovation and sharing the existing innovation (Mohapatra, 2013). Lego created a program known as Ambassador Program that provides a direct and a faster rate for the company and its customers to interact with each other. This has increased encouraged consumer friendly innovation as the new products are developed with respect to the requirements by the users. Strategy adopted by Lego Company for its revival and survival after its loses Since the Danish company, Lego was found in 1932, it has made great achievement in its efforts to build and maintain its name in the market. The company experienced losses in 1990s and started facing financial challenges. It reached an extend in 2006 when rumors spread that the Mattel company which was a toy industry giant wanted to buy Lego to take an advantage as Lego Group had faced massive losses in its sales (Reichwald, Piller & Ihl, 2009). However, Lego changed its strategies and restructured its management enabling it to rise again in the year 2007. This spring back was contributed by the appointment of the new CEO, Jorgen Vig Knudstorp, to take over from the long serving third generation family management. The family owning the company also re-invested $178million allowing the company to reform and start generating profits. The strategies involved extensive rationalization and expense reduction in areas like factory location and supply chain, together with the restructuring of the strategy for product development. Some of the core strategies established by the new management was cutting the pieces being manufactured from 12,400 to 7000 reducing costs such as transport and manufacturing costs (Reichwald, Piller & Ihl, 2009). To revive, Lego also included wide learning and research programs for new methods of working with their product users as designers as part of the product creation technique. Lego Company also worked according to its very powerful vision statement ‘Inventing the future of play’. This vision show that it works on new ways of game development progressively from simple blocks to interlocking bricks then to programmable toy products. They succeeded in changing the attitude of the product consumers in a wide and global sense. Their strategy was to react to the consumer needs before the need arises, creating a sense that consumers always anticipate for a surprise from the company (Reichwald, Piller & Ihl, 2009). To Lego, products alone did not matter as it mostly happened with other companies but realizing the human possibility was far more important than that. Over several years of operation, Lego Group has established several products ranging from physical toys to digital products. Toys and children creativity industry is a difficult business which needs special attentions due to its ever changing consumer requirements. To sustain this and remain competitive in the business, it takes an individual company great effort and innovativeness to sustain its trend in the market. Lego managed to survive the stiff competition by studying the family patters, house conditions and playing habits in its efforts to gain a deeper understanding of the market. This also enabled the company to remain popular and a choice to children and also adults of all ages and generations. It always focused on making a world where children are free to build anything new and new in a cyber-environment (Reichwald, Piller & Ihl, 2009). As the children shift from the traditional toys and gain more interest in personal computers and video games, Lego Company also strategized on innovative products to maintain its customers. In addition, it diversified into other businesses such as clothes, computer games and also the popular Lego theme park to substitute the non-performing businesses and absorb shock as the product taste change with the changing times (Reichwald, Piller & Ihl, 2009). How the computer games helped the Lego Company in its revival Consumers have always played an important role in the marketing and designs of Lego products. As the users shifted from brick to computer games, the company also had no option but to change its production techniques to satisfy customer needs. The strategy of introducing computer games has helped the company to achieve great success. The strategy further encouraged the learning process by making the design process open to outsiders. They produced a product called Mindstorms that majorly aimed at competing with the computer industry (Hjarvard, 2013). Mindstorms product worn in the market since it was more real than the computes games since the users could fully interact with the product. Introduction of the Mindstorms Robotic Invention System (RIS) enabled the company to make massive sales in 1998 becoming one of the company’s most selling products. On discovering these amazing sales, the company started working on another product, Minsatorm NXT which was an improvement of the original version which was launched in 2006. For a long time, Lego brands have been allowed by the company to collaborate with any willing media company to access its child audience in exchange to marketing and prompting Lego products. Lego computer games has a great market potential in audience recruitment to licensed material, although the main function of these computer games is their capability to recruit adults who are non-player (Graupp, Jakobsen & Vellema, 2014). The attraction is achieved through sentimental use of iconic and familiar graphic-representation mode and franchise material significant feature in the earlier video games. Most of Lego’s video games are developed from collaboration between two or three companies that will have a share in production and income of these games. Examples include the collaboration between Lego and Warner Bros gave rise to TT computer game. There has also been collaboration between Lego and other companies such as Disney Company to produce some particular computer games (Hjarvard, 2013). In all these collaborations, the final advantage goes to Lego Company since its brand carries the franchise media materials to the new consumer base. Lego’s superiority is realized with its modification of the original content to make it appealing by removal of any bad material. This makes it appealing to children who are playing the games and the parents buying the game. The success of Lego computer games strategy of co-branding depends on the simulation and modeling of the Lego brand. Its construction setting provides both the characters and environment for the game. This encourages the long terms fans to continue using the product due to its friendliness (Graupp, Jakobsen & Vellema, 2014). Moreover, the products are not just included in the game for viewing purpose; the digital forms of the previously available toys are available and incorporated in the game. Future prospects of the Lego Company with current situation Part of Lego’s trade has been greatly transformed due to a number of factors including working with different types of users. Despite the company’s advancement in designing toys and making bricks in the old fashion, it has revolutionized many other products in which it sells parallel to the existing products. These parallel businesses have managed to display a steady growth by user engagement forming the front line of the designing, creation and invention of their own products. Significantly, Lego’s techniques of user involvement has greatly succeeded since other users’ designs in most cases, gain popularity among other users and find itself a new market of its own. This process does not only embrace vanity publishing but a fascinating design extension and marketing of the product into the open source world. Lego’s engagement in the open methodology has enabled it to draw into its world instead of accumulating users who develop and share ideas outside the company (Hjarvard, 2013). It has accomplished this methodology through establishment of platforms such as adoption of vibrant self-governing Lego User Network known as LUGNET among others. The most recent and present achievements of Lego toy company has managed to draw several strands together. It has managed to design a Massive Multiplayer Online Videogame (MMOG) that can be played by several players. Lego Universe managed to customize creatures and characters in accordance to the children who created the models. This was achieved mainly through projects such as Lego Factory whose work is create user defined characters into digital characters playing virtually in the game and also playing physically in the real world (Graupp, Jakobsen & Vellema, 2014). The future still projects on uniting scripts and traditional storytelling methods with its previous brick making and arrangement forms, allowing imagination and creativity of its Lego Universe to redefine the Virtual and real features in the future and present games. The company is targeting to concentrate more on creation of video games that that serve as promotional texts with a substantial product placement. The company plan to accomplish this by investing less on selling customer merchandise. Other video game designers and sellers do not provide meaningful experience to the the users in the game. Lego has managed to combine the selling of advertising space and at the same time providing a wonderful experience within the game (Hjarvard, 2013). This results to quick financial response from the product consumers, enabling the game to do well than the simple merchandise sales. As part of Lego’s growth strategy, the company plans to expand its market potential from strong world economies such as United States, United Kingdom, Japan, China and other European nations. To achieve this, the company plans to build and open branches in these countries so that production can easily be done closer to the target markets. This will reduce lead-time and better service to its customers and consumers. Additionally, the company aims at enabling independent management of its branches all over the world in order to deliver high quality, consistent and safe products to the consumers (Graupp, Jakobsen & Vellema, 2014). References Graupp, P., Jakobsen, G. and Vellema, J. (2014). Building a global learning organization. pp.83-85. Hjarvard, S. (2013). The mediatization of society and culture. New York: Routledge, p.129. Mohapatra, S. (2013). E-commerce strategy. New York: Springer, p.127. Reichwald, R., Piller, F. and Ihl, C. (2009). Interaktive Wertschöpfung. Wiesbaden: Gabler Verlag / GWV Fachverlage GmbH, Wiesbaden, p.288. Read More