LEGO focussed on its product in the early 2000s, which caused company to

become bankrupt. This is the issue because, with the rise in popularity of computers

and video games, LEGO did not adapt to the changing market scenario. The

business encountered problems when it overstepped into ventures unrelated to its

iconic toy, such as a clothing line, theme parks, video games, and even jewellery

with the Lego logo. Additionally, the production of the newlines required a large

number of parts, which proved to be both costly and logistically challenging.

Numerous of these innovative goods, which had motorised and electrical

components, turned out to be more expensive to produce than they were worth. The

organisation of the firm was also in disarray, with many of its long-time designers

being fired and others hired who had no understanding of or enthusiasm for the

brand's origins, which led to the development of product lines that did not meet

market demand.

The strategy employed by LEGO under Jorgen’s direction involves analysing the

company's product development, sourcing, production, marketing, and logistical

processes. Whereby LEGO attempts to uncover the "truth" by basing a large amount

of management compensation on store, parent, and kid satisfaction surveys rather

than sales numbers. Additionally, a large number of employees were laid off, and

some manufacturing was moved to Eastern Europe and Mexico because of their

lower costs. While Billund continues to be the major manufacturing centre for LEGO,

expanding assembly to other places, including its assembly factory next to the

corporate offices. This strategy is intended to make sure that the long-term viability

of LEGO's business is never sacrificed for immediate financial gain. In addition, the
company's iconic LEGO land amusement centre was sold (even though a few shares

were kept) and non-core goods were eliminated as part of a broader plan that

centred on its original blocks and small-figures. Additionally, he has embraced

strategies from growth-oriented public corporations, which has allowed the family

firm to expand from a tiny carpentry store to the third-biggest toy manufacturer in the

world by sales.

Therefore, it differs from the prior strategy, according to which the firm required

to stop a sales fall, pay off debt, and concentrate on cash flow in order to survive.

Jørgen 's strategy focused on creating and sustaining strong partnerships with

both internal and external parties, and it was supported by a goal that was really

market-oriented. Jørgen and his team, for instance, concentrated on their

relationships with consumers, distributors, and suppliers. Through a series of cross-

functional partnerships, the firm was able to cut the number of colours in half and the

number of goods-keeping units. In addition, the crucial partnership with DHL,

LEGO's logistics partner for obtaining advance orders and delivering to customers,

was stressed as a result of the outsourcing of logistics. On the other hand, he also

made the decision to keep up their primary toy manufacture while raising its global

image and branding through a number of partnerships with the gaming and film

industries. For instance, LEGO created a number of highly creative (and lucrative)

connections with well-known movie brands like Batman, The Lord of the Rings, and

The Three Hobbit.

By putting a number of plans into action, LEGO was able to recover from almost

going bankrupt in the early 2000s. LEGO sought a new market to dominate in order

to make up for their bankruptcy. As everything became more digitalized, this

company had to found a strategy to change. By entering the toys-to-life industry (or

video games where real-world action figures interact with those on screen), Lego

was able to stay suitable while staying faithful to the brand and goals. In addition,

they truly got to know their target audience by learning about their interests.

Because, they had done this by making wrong assumptions, inventing quickly, and

producing without properly first determining if their intended audience truly desired it.

Then, they began to take it seriously and get back on track by recruiting adult fans to

manage the product design and executing ethnographic research to see how child all

over the world genuinely enjoyed to entertain. By perform this, they were capable to

produce goods that their target market genuinely valued.

Unfortunately, LEGO first produced a product that their target market did not find

appealing. After they declared bankruptcy, the company's new CEO, Jørgen,

refocused them on their main products, which are classic bricks and small figures.

For instance, LEGO had drifted too far into other areas of their business, such as a

clothing line, theme parks, video games, and even jewellery with the Lego logo.

However, after developing a strategic plan, they were able to hone in on their core

function and cut the quantity of different LEGO bricks produced from 12,900 to

7,000. Jørgen also realised that the company's family organisation had driven to

problem and strategic stagnation that made it too undisciplined. Therefore, he then

restructured the management to operate LEGO like a cunning private equity

business by concentrating only on the company's objective.