Market has a score of conservative 1 as in Asia the term Play is defined

Market has a score of conservative 1 as in asia the

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Market, has a score of conservative (1), as in Asia the term “ Play” is defined differently and not considered as important for young children. While, for options 2: Expand into Mega- Market i.e China & India, it has a score of open culture (2), as the culture in these type of country defined the “Play” term as creating, building and innovation are much better development for young children to learn rather focused more on books and education. “Standard requirement” for both options 1: Focus on America & Western Europe Market and options 2: Expand into Mega-Market i.e China & India, has a score of stringent (1), as both country has different kind of laws and regulation that LEGO Group need to followed in order to produce their products, even though there are not similar. The last criteria of growth 10
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potential for options 1: Focus on America & Western Europe Market, has a score of moderate (2) as focusing more in this market would not give the highest growth potential as compared to the Asian market where population are much higher. While, for options 2: Expand into Mega-Market i.e China & India, it has a score of high (3) as the LEGO Group would be able to capture are higher population in these type of country rather than just focusing on the existing market that the buying power of customer might be reducing in the near future. Each rating is multiplied by the weight for that criterion. For example, "Growth Potential" (weight of 4) for "Focus on America & Western Europe Market” moderate (2) for a score of 6. The scores are added across the rows to obtain a total for each problem. The options 2 of "Expand into Mega-Market i.e China & India" has the highest score at 24 as compared to options 1 “Focus on America and Western Europe Market” with score of 18. Hence, this makes it clear that “Expand into Mega-Market such as China and India” is the best option for LEGO Group. 3.0 Recommendation 11
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LEGO has a huge success story in Western Europe and America, yet will they be able to repeat this success story in Asia? While LEGO has sold toys in Asia for three decades, there is a serious potential to improve the market share and maybe even outgrow the North America and Western Europe, which together accounted for 72% of all LEGO sales in 2011 (Wagstaff, 2016). Based on the result of decision matrix analysis that score of 18, it is the right time for LEGO Group to expand their reach into the mega-market such as China and India possibly with own manufacturing plant in these countries. Although such a move over the next 5 to 7 years would be full of risk, especially considering such effort of Lego that had a checkered history of expansion that almost led to bankruptcy (Forbes, 2013). Yet, it is certainly a good option as it will reduce the production cost because of low-cost labour.
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