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TRƯỜNG ĐẠI HỌC KINH TẾ - TÀI CHÍNH TP. HỒ CHÍ MINH

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Case Study - LEGO

TP.Hồ Chí Minh, 27th February

Question 1: How does LEGO manage to constantly reinvent its business?
From a small company to now, LEGO manages to constantly reinvent its business by
focusing heavily on innovation and emphasizing market and consumer research with the lead of
CEO Jorgen Knudstorp and the Future Lab (a secretive research and development team). The
company employs a design-thinking team to help the company become better, more special and
more suitable for the target customers.

Question 2: What role did marketing research play in LEGO’s market success?

At first, LEGO was really popular, but LEGO’s growth and expansion slowed at the end
of the 20th century due to the slow-down of birth rates and the changing of children, even being
on the verge of bankruptcy. However, after Jorgen Knudstorp was promoted to CEO in 2004,
everything was gradually solved. To be successful like that, Marketing Research plays the main
role. As Knudstorp had said, “in order to rekindle the emotional connection between customers
and LEGO toys, LEGO had to deeply understand each customer’s desires and behavior.”
Thanks to Marketing Research, LEGO’s products (The LEGO Friends line) caught on strongly in
markets worldwide, including China, Germany, and the United States. And more than that,
LEGO also surpassed rival Mattel to become the biggest toy manufacturer in the world in 2007.

Question 3: What differentiates LEGO from its competitors? Is LEGO’s competitive

advantage sustainable?

To compete with many strong competitors like Mattel, LEGO has many special
differentiates that helps it grasp the target audience’s attention. Those differentiates include
qualities, diversities, beautiful packaging of products, … especially marketing research. The
company is really good at understanding the market and the target customers, they know what to
do and always try to develop, innovate the products. Although LEGO is very successful at the
present, LEGO still must continue researching its customers and experimenting with innovative
product lines to stay at the top of the toy industry because with the development of technology,
kids spend less and less time playing with physical toys every year. Therefore, LEGO’s
competitive advantage is not sustainable, it needs to keep working or else it will be replaced in
the future.

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