Other than that Lego does not have innovative capability to compete with

Other than that lego does not have innovative

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Other than that, Lego does not have innovative capability to compete with digital toys and it would be a weakness for the Lego Group. Lego are proud with its own unique bricks’ elements. Also, they have competitive advantages in producing these elements toward their competitors. However, when the technology move further, kids nowadays would not be satisfied by only playing real toys but get interested in digital toys. From this perspective, Lego was lack of innovative capability to compete with digital toys. Lego as traditional toy manufacturer, if they want to develop their product in digital, it would cost them highly for example in research development. External analysis of LEGO company has helped detect some factors that act as biggest opportunities to the brand. One such aspect is a parental focus on skill enhancement and experiential learning for their children which is driving them to choose LEGO sets, which is one of the biggest opportunity for Lego as a toymaker company. Moreover, LEGO has an enormous opportunity to expand its market share by penetrating mega-market in China and India. This is because the growth potential in both of this country resulted in a higher 5
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percentage by 10% and Lego market share are also bigger in this particular country, hence it provides a great opportunity for them (Mikes, 2014). Besides, by transferring the manufacturing plants into the third world may also save production cost significantly. Another great opportunity for the LEGO Company is in the E-Commerce and social media- oriented business model. E-commerce business model can help LEGO Group to tie up with the local suppliers and logistics provider in the international market. Whilst, social media growth can help LEGO Group in reducing the cost of entering new markets and reaching to customers at a significantly lower marketing budget. However, conquering Asia is not so easy as it looks as the LEGO company may face difference threat that is unique to this market, such as a big difference in culture. This dynamic social culture in Asia had influenced the kids away from traditional toys, where “Play” is defined differently and not considered as important for young children. Furthermore, due to advancement in technology a huge craze of video games and digitization of games has become a raving trend, detailing children away from brain development toys; this is considered as a major threat for the LEGO Group. Besides, LEGO Company also faces issues regarding cheap imitation of its ultimate product, namely, LEGO Bricks. This is due to in some country, it is really hard to enforce copyright or patent law. Besides, a threat from counterfeit such as Nintendo DS, PSP appear like a smart toy and possess a real threat to LEGO Company if they can manufacture cheap gaming devices, even though their market share is growing slowly.
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  • Spring '18

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