Being ahead of these trends will allow us to inspire future generations of children,” Christiansen told Retail Insight Network. In established markets, such as the United States and Western Europe, growth was in the low-single digits. It also underlines how vital it is to go after international expansion to secure long-term growth (alongside research to back up your plans). The top selling themes in 2018 in no particular order were LEGO® City, LEGO® Technic™, LEGO® Star Wars™, LEGO® Friends and LEGO® NINJAGO®. The toy trade is all about what’s new, so the only way to shift the stock was by slashing the price – devaluing the brand in the process. The problem, said the family-owned Danish company, was weaker demand in established markets such as the US and parts of Europe, where a saturation point had been reached. “We have to innovate across the whole experience from product to marketing, the whole value chain,” she said. Be the first to get access to reports, research, new product info, and events. The LEGO Group’s portfolio also comprised new products which blended the brick with digital play. In constant currency, revenue grew 7 percent compared with 2017.Operating profit grew 4 percent to DKK 10.8 billion. It is simply packed with core business concepts including market segmentation, innovation, competitive advantage and finance. Boston House, Research showed that Chinese kids play with Lego in much the same way as children of any nationality, and so the toymaker would not be developing product lines specifically for Chinese or Asian markets. It doesn’t have to be supranatural, we just want to make sure we are reaching more kids and we stay relevant and engaging. The company organised play events and hosted a holiday Build to Give campaign which, combined, engaged more than 840,000 children in 26 countries. The company also plans to open more than 70 Lego brand stores outside of China this year, including its fifth flagship store in Amsterdam, The Netherlands. Since 2007, Lego has tripled its revenues globally and achieves an operating profit margin of almost 25%! Cash flow from operating activities remained strong at DKK 9.8 billion, although it was 8 percent lower than the DKK 10.7 billion in 2017 due to changes in working capital in line with business momentum. “We are making these investments from a sound financial base to capture the opportunities being created by mega-trends, such as digitalisation and global demographic and economic shifts which are reshaping the industry. A positive impact on society and the planetDuring 2018, the LEGO Group continued to live by its Planet Promise and its aspiration to have a positive impact on the society and the world children will inherit. The strategy of Lego is summed up nicely by the quote: "We want to be the best, not the biggest". Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences. Meanwhile, Lego will “invest heavily in e-commerce”, ensuring it won’t lose sales to online rivals like Amazon, which was blamed for last year’s collapse of Toys R Us. Chief Executive Niels Christiansen said Lego had taken “the active choice” to bring down operating profits by 16% in order to invest more. Lego’s growth plans included adding stores to less central cities in China. The business has never made an acquisition. “We began with shops in the major cities and are now looking to reach more children by establishing stores in more cities as we see increasing interest and demand for our products,” said Trangbaek. The idea would be to get on some kind of journey like we are on in China.”. It focuses on using new product development and innovation as the driver of revenues and profits - to great success. Lego’s new brand growth strategy paid off – they returned to growth again in 2018, with profits and sales both increasing by 4%. The business has never made an acquisition. Revenue growth in all market groupsRevenue in all market groups grew. It also installed one of Denmark’s largest rooftop solar panel systems which will provide 50 percent of the energy requirements to its new Campus building in Billund. Finally, in some markets the reset entails addressing a clean-up of inventories across the entire value chain.”. LS23 6AD, Tel: +44 0844 800 0085 Already thinking about how to grow your brand? Shops create experiences, promoting the brand in un-Legoed parts of the world, including China,” it said in a comment piece. Our latest insights into this industry are below. CEO Niels Christiansen announced that 80 new stores would be launched in China during 2019, adding to the existing 60, and giving it a presence in 35 cities. Great example of the use of strategic partnerships to drive organic growth: Jim co-founded tutor2u alongside his twin brother Geoff! Learn how to switch to the growth mindset in 7 easy steps, and how it can boost your career. Lego’s new brand growth strategy paid off – they returned to growth again in 2018, with profits and sales both increasing by 4%. During the year, the company introduced the first elements made from plant-based plastics and pledged to use 100 percent sustainable packaging by 2025. That creates a lot of hunger in the organisation,” she concludes. Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs. It would put money into opening stores, while shipping less product to retailers in the US and Europe. In the five years leading up to this point, Lego had invested in massive growth. Fax: +44 01937 842110, We’re proud to sponsor TABS Cricket Club, Harrogate Town AFC and the Wetherby Junior Cricket League as part of our commitment to invest in the local community, Company Reg no: 04489574 | VAT reg no 816865400, © Copyright 2018 |Privacy & cookies|Terms of use, AQA A-Level Business Calculation Practice Book, Advertise your teaching jobs with tutor2u. Operating profit was DKK 10.8 billion compared with 10.4 billion in 2017 an increase of 4 percent. Christiansen said: “Our challenge each year is to create play experiences that are more exciting, more relevant and more fun than the year before. The growth story of Lego is an organic one. In China, a strategic growth market for the Group, revenue grew strong double-digits as the brand expanded into new cities and built its presence on ecommerce, digital and physical platforms. The toymaker recognised the need to expand into markets that were still growing, such as China, but was struggling to do so, said chairman of the group Jørgen Vig Knudstorp, in a press statement. “We have added complexity into the organisation, which now makes it harder for us to grow further. Become a lumbering beast, and it’s not easy to change course when you see the landscape changing. For marketers, insights leaders, and innovators alike. The Group will further expand its presence in the Middle East and explore opportunities in new markets where there is a large and growing middle class population, such as India. It focuses on using new product development and innovation as the driver of revenues and profits - to great success. “The fact that hundreds of millions of Chinese consumers will form an increasingly affluent middle class in the coming years is a huge opportunity for us,” said Lego spokesperson Roar Rude Trangbaek. He is the current CEO of the Lego Group, and has been since October 2004. Opening its third-largest global factory (in the city of Jiaxing) positioned Lego to supply products not only for the Chinese market, but other Asian markets too, including Japan and South Korea. In China, the company will accelerate expansion and open 80 stores in 18 cities during 2019, starting with a new flagship store in Beijing which opened on February 22. How many key strategic business strategy concepts can you spot: Long-term business planning; Joint ventures and strategic partnerships; Organic growth through new product development Revenue grew 4 percent to DKK 36.4 billion; operating profit grew 4 percent. Stock was piling up in warehouses because Lego had too many product lines, and there just wasn’t enough room on the shelves in toy stores. It would, though, seek to combine physical and digital play to adapt to China’s advanced digitisation. We also grew market share in our largest markets around the world, bucking industry trends. LEGO® Harry Potter™, LEGO® Jurassic World™, LEGO® Classic and LEGO® Creator also performed strongly. It will also impact our costs. “And most importantly what that leads to is they are more agile and responsive to the marketplace.”. “Within 10 years, there will be 100 million kids in India living in middle-class families,” Christiansen told the FT. “They are strong into education and products like Lego are very high on the wish list. “Store expansion should help secure sales growth. To jump straight to our ... read more, Welcome to the second feature in our new Creative Spotlight series. As a result, we have pressed the reset-button for the entire group.”, Unfortunately for Lego’s employees, this meant cutting 1,400 jobs – about 8% of its 18,200 global workforce. “Last year, we were pleased with the response to our homegrown themes such as LEGO City and LEGO Technic. All students preparing for mock exams, other assessments and the summer exams for either AQA or Edexcel GCSE Business. One lesson the Lego’s growth strategy teaches us is how important it is to stay agile. “We’d like to thank our talented colleagues who did an outstanding job executing plans during the peak holiday season.”. “We have now come to a point where we are really active to the new wave of growth. Do you see the glass half-full or half-empty? BILLUND: February 27, 2019: The LEGO Group today reported earnings for the full year ending December 2018. Brand: Subway Campaign: ‘Make It What You Want’ Agency: Above & Beyond What the agency says about the ad ... read more. Equally, when opportunities present themselves, you need to be able to react quickly to take advantage of them. The top selling themes in 2018 in no particular order were LEGO® City, LEGO® Technic™, LEGO® Star Wars™, LEGO® Friends and LEGO® NINJAGO®. 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