Lego is 100 years old company which is famous for its toys. It started off in Denmark. As of now they have become the world’s largest toy company by reporting revenues above all their competitors. Artists who choose unconventional ways to exhibit their talent use Lego to build buildings, structures, monuments and sculptures. During the peak shopping season around 30 Lego sets are sold each second. There are approximately 80 Lego bricks for every person in the world estimated by the number of people in the world and number of Lego sets that have been manufactured each year. They manufacture figures with holes in their heads because in case any of the kids accidently swallow the piece he/she would still be able to breathe. They intentionally put extra pieces of bricks in the sets because people tend to lose pieces and it is better to have more than less.
Political Factors
Lego has the policy of not participating knowingly in any political event, they shy away from politics and this policy is portrayed through their actions on various occasions. They denied giving a bulk order to a Chinese Artist Ai Weiwei for his exhibition in Australia for freedom of speech; the issue is of political importance therefore Lego declined the order. But this denial did not discourage the artist who is now taking donations for Lego sets from his fans and followers and if this would not be enough he will buy second hand sets from auction. The artist criticized this action as being discriminatory and an outright contradiction to their claim of inspiring young minds and builders of future as they have refused to sell their product to an artist. In the past Lego has associated itself with art and exhibitions by aiding artists with their bricks to express their art and talent. The artist has previously used Lego bricks to build portraits of political leaders who were held in prison. (Dezeen, 2015)
Economic Factors
Lego is 75% owned by Danish company who founded it. In first quarter of 2015 Lego even crossed the market leader. This was the result of their new theme based Lego sets that they introduced like Friends set. This industry was struggling because of economic crisis in 2008 and started improving as economy started recovering; the performance of toy industry is not satisfactory in Europe due to Euro zone crisis. This industry has also suffered due to development of game applications for mobile phones, tablets and operating systems. Children are more fascinated by electronic games rather than physical toys in which they have to put all the effort to make it entertaining. Lego however turned around the situation by reporting double digit sales in all regions. This can also be because of Lego’s popularity in all fields of life with films being made on this brand, artists using it to showcase their talent etc. (Harrington, 2013)
Social Factors
The company has collaborated with UNICEF to protect and safeguard rights of children by eliminating child abuse and child labor. It has a very clear stance on these issues and all possible actions to improve the current situation. Lego has pledged to be responsible in its business conduct as toys are most strongly and emotionally connected to children, therefore the onus of producing toy characters that are healthy for young minds lies on them. Being the market leader now its Lego’s responsibility to support child welfare issues and it is doing so, it has promised to give UNICEF a total $8.2 million in the coming years in order to be invested in child welfare projects, particularly for children living in war zones. Lego believes that a child’s mental and intellectual growth depends a lot on the kinds of challenges and activities they perform at a very young age and these children who live in war zones do not grow mentally as vibrant as others. (Confino, 2015)
Technological Factors
Lego has collaborated with Texas Instruments to manufacture robot that runs on superior technology. The robots built with this technology would be controlled by remote controls, Bluetooth devices etc. Lego Robot platform is not only available for sale but also for educational purposes. Lego is known as the Apple of toy industry because of its continuous innovation and creative marketing and distribution strategy. It is present in more than 100 countries all over the world. One excellent example of effective and thoughtful marketing by Lego is creation of animated series using its Ninjago characters, they knew that the more children will watch these series the more they will be emotionally attached to these cartoon characters and thus will demand that character specific toys. (Honeybone, 2013)
Environmental:
There are two main actions that Lego has taken in order to be environment friendly company; one is reducing Carbon emissions and second is more responsible sourcing of materials. The energy that is being consumed for the manufacturing of Lego blocks is more than 100% renewable and they have planned to achieve 2.5% efficiency in energy consumption each year. Moreover they test their suppliers, from whom they procure raw material that they produce goods by being energy efficient. The printing and packaging material that they use is FSC-certified and recycled. It has also signed an agreement with WWF to act in environment’s best interest. It has built an offshore wind mill with Germany and plan to reduce Carbon dioxide emission through renewable energy sources. By 2030 company would no longer manufacture bricks made of plastic with oil used in its manufacturing.
Law/Legal Factors
Over the years the issue which has plagues Lego’s sales and performance the most is the presence of counterfeits and copycat products in the market at a much cheaper price than what Lego offers. It has filed suits against many companies including one famous Chinese company Coko, who were making the bricks like Lego. They were asked to apologize on the newspaper. In another instance a whole shipment of counterfeit products were found by Finish authorities who they seized and the case was put in court, the guilty party did not even appear in court and Lego got the claim to dispose off the products as per their choice. As a result of this situation the company has to be cautious and careful about its designs and make use of patents and copyright laws.
Bibliography
(2015, October 26). Retrieved December 29, 2015, from Dezeen: http://www.dezeen.com/2015/10/26/ai-weiwei-lego-building-blocks-political-work/
Confino, J. (2015, March 13). Lego CEO: ‘if we don’t deal with children’s basic rights, we will have a difficult future’. The Guardian .
Harrington, B. (2013, February 21). Lego builds on success as new ranges send sales soaring. Retrieved December 29, 2015, from The Telegraph: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9886221/Lego-builds-on-success-as-new-ranges-send-sales-soaring.html
Honeybone, E. (2013, March 22). Lego is a serious business. Retrieved December 30, 2015, from Transform: http://transformuk.com/lego-is-a-serious-business/