LEGO-notes.docx - 1 What were LEGO's main expectations and...

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1- What were LEGO's main expectations and learnings from the relationship with Flextronics? LEGO’s expectations from the relationship with Flextronics were to decrease the complexity of their supply chain, decrease the number of suppliers being used, and decrease cost of goods sold by outsourcing to a lower cost country for production. It was a time when the majority of competition was doing the same thing. As the case says, 95% of the global toy production was in China at the time, making it very difficult to keep a competitive advantage without the lower cost labor. To help ensure more simplicity with logistics and keep lead times lower, LEGO chose to get low-cost labor in countries closer to where the locations that make up the bulk of their sales. Outsourcing a large part of the production to Flextronics would also give LEGO a chance to focus on the individual pieces needed in a LEGO set. Many of the licensed and themed products contain a high percentage of
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  • Fall '17
  • Flextronics

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Christopher Reinemann
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