Logo design case study essay

Intro

The article is a ideal analysis for LEGO Group. LEGO Group is a popular toy organization in the world, which usually established in Denmark. PROFANO Brand is not just the familiar logo, but also the expectation. PROFANO acts as a assure of quality and creativity. LEGO’s main values will be imagination, creativeness, fun, learning, caring and quality. The essay displays strategic research by discovering the market, analyzing standard and industry environment, listing resources and capabilities, analyzing the company’s key competency, SWOT, current approaches.

Then, supplying the key issues. Finally, the essay will recommend the business-level strategy.

Identifying The Industry

Doll retail market boost 4 per cent per year within a moderate tempo in 2010, but the demand for the precise fashion doll may spike or failure rapidly. A large number of toy suppliers serve the global market, but the few lead industry. Mattel is the planet’s leading doll manufacturer in revenue. LEGO is the planet’s the third greatest toy maker. There are more and more toy manufactures in Asia because it is labor is cheap and many subcontractors are ready to produce goods in behalf of their manufacture.

Toy manufacturers sell goods through numerous retail stations, including chain stores, price cut stores, impartial toy professionals, department stores and online shops. There are three points, which usually need to pay awareness of. Firstly, fad toys are usually more popular as well as the product life circuit decrease. Extra, children have more after-school activities. Finally, more kids choose online actions more than playthings. The alternative product to get toys is usually electronic online games.

Analysis with the general conditions

Economic element

Generally, the word’s economy is still unoptimistic in the new. Although Western debt crisis has been lightened conditionally, it is negative impact to global economy nonetheless last for the certain time. Labor cost is increasing. Due to multiple elements, the total expense of toy boosts significantly, while the profit charge falling greatly.

Socio-culture

“Multiculturalism is method to obtain innovation and creativity. LEGO design department has more than 100 designers from much more than 10 countries, satellite support team existing all over the regions. LEGO design and style team keeps deliberately the diversity of designers coming from a variety of educational and specialist background. People with any skills and qualifications has the probability of become a member of this great design crew. LEGO takes part in many public welfare activities for children, for example , encouraging kids to signing up for in environment protection. SEGLAR has very good relationship and trust. LEGO CEO Knudstrop makes a psychoanalyst to train the management crew to support the good relationship. The height of SEGLAR sale is definitely during the college holidays, particularly in Christmas (Yi 2009).

Global element

LEGO’ come goods are made by simply plastic and chemical useful resource, that the price of these is influenced by price of international crude oil. For global market, Knudstrop said that Asia market is the company’s major strategic area in the future and LEGO was discussing the potential of establishing production bases. PROFANO Group has not shared a powerful market position in BRIC. The market in BRIC will establish strongly later on and SEGLAR Groups attempts to invest in the marketplaces. For outsourcing techniques, LEGO chooses service provider Flextrinics, which has production facilities in Korea, Denmark, the united states and Switzerland.

Technology aspect

In 1999, LEGO had the internet shop. This kind of decision help LEGO drive more consumers. Basics on the the majority of adept building blocks, Lego designed some braining games based on personal computer plus the Internet, just like LEGO Insensato, Bionicle, Seglar Creator, and so forth These improvements have satisfied consumer group growing in the virtual era. LEGO connect to consumers through Internet. Last year, LEGO Kids Clubs has members about 3. two million and a dedicated website. Many mature fans of LEGO discuss experience, video tutorials and pictures on the Internet.

Political/legal element

Global political environment is secure in general nowadays in this. International regards between primary political forces in the world offers gotten a balance after good competition, which is relative steady. To creating a favorable atmosphere intended for economic expansion and encouraging a good development of the toy market, most countries seek a reliable, peaceful and develop intercontinental environment.

Evaluation of the sector Environment

Negotiating power of customers

There are a few large buyers, which are large selling chains such as Kmart, Goal and Big W in Australia. That they buy products by many different brands. Buyers good deal for top quality, lower price and great level of services.

Bargaining benefits of suppliers

Pertaining to toy sector, there is no bargaining power of suppliers because there are numerous suppliers in this industry.

Risk of new entrants

For gadget industry, new companies are easy to entry the industry because toy industry offers fewer fruits. The products are similar, which is simple to copy. Plaything industry doesn’t have new firms to invest a lot and switching costs happen to be low since most buyers so not have the loyalty. If the products are more appealing, consumers will buy, specifically major concentrate on people are children. It is easy to entry to distribution programs, but it is hard to cover the marketplace because various retail methods about gadgets, including on the net stores, malls and so on.

Threat of replacement products

Replace products carry out the related function as playthings, which are electronic digital games. Because technology offers improved rapidly, more children prefer to employ iPod or perhaps iPad to experience electronic game titles. Threat of substitute items is very large, which is very important.

Intensity of rivalry

For toy sector, there are many rivals. The rate of industry development isslow, and so companies use resources to expanding consumers effectively. Since product differentiation is lower, the switching value is low. Even more companies enter the industry, which usually promoting competition.

To sum up, to get toy market, threat of new entrants can be low, provider power is definitely low, purchaser power is usually moderately substantial, threat of substitute goods is very excessive and competition is very fierce.

It observes that the gadget industry is still an attractive industry. There are nearly no limitations to admittance the market. As technology improves rapidly, new clinical research and manufacturing technology apply to the toy sector continually which due to more and more new toys with high technology. In the event that new companies have wonderful concepts or design and style teams, it is easy to share the marketplace. However depth of rivalry is substantial, companies even now can get buyer base by catering to the demand of consumers. Because buyer power is usually high, fresh entrants usually do not worry about all their sale ways.

Analysis of Resources and Capabilities

Tangible resources

Real resources consider assets that could be observed and quantified, which includes financial resources, organizational resources, physical resources and technological methods. LEGO provides total assets for 10972 million DKK in 2010, 871 million DKK in money flows and 5473 million DKK in equity. LEGO has a solid operating system to deal with earlier supply chain complications. The company developed systems to evaluating all manufacturing cost as well. The optimization of complex working model is successful, which will help LEGO save cost and time. In addition , LEGO’s hallmark is the significant resource.

Intangible resources

Intangible resources can be a superior supply of capabilities and core expertise. Creativity is the ability to produce ideas that is valuable. Écuries are important source because they may have employee experience and the ability of development. LEGO Group has the great reputation via excellence quality. LEGO has got the fantastic romance with suppliers and vendors, which can decrease unnecessary difficulty and makesoperating system more successful. LEGO offers huge loyal consumer bases

Capabilities

PROFANO has a excellent innovating system. Developers need to follow rigid process and use market research insights, which could satisfy the industry demand and steer clear of design errors. In advertising area, LEGO has superb connections with consumers. The company has a certain website intended for customer club, which connect to consumers by games, testimonies and actions. The membership has the affiliate about 320 million. That manufactures areas, the organization has competitive advantage, which can be high motorisation technology. Intended for supply sequence management, the company’s production planning comes from revenue incentives’ actual forecasts. In distribution areas, the company creates distribution programs in order to minimizing the focus on the enlargement of the syndication costs.

Innovating system is valuable, because capability stimulates the revenue levels. The innovation need to cover the style and produce consumers pleased. Each organization knows this concept well, so it will be not strongly to replicate. The company shows customer personal preferences by discussion with clients and develops relationship with children and the parents, whom are customers. The company also keeps in touch with retail buyers to ensuring the particular links run well, since they can offer a steady stream of information. This procedure needs long time and much money to build the relationship, so it is expensive to imitate.

Profano building division channels to be able to reducing the emphasis on the expansion in the distribution costs. Firstly, the corporation reduces the number of logistics services to fulfilling the flexibility and inspiring suppliers to competing. At the same time, the company assesses to economies of size. Redesign the distribution approach to the company has the ability to surpass opponent. This is unusual and useful. To do this action, the company be expensive, so it is expensive to imitate. The high motorisation technology can be rare and valuable, which reduces labor cost and producing period. This technology needs a number of years to exploring and developing, which is hard to copy.

SWOT Examination

Strengths

Closely after the changes of the moments perhaps is among the most significant feature of PROFANO. In 2002, LEGO releases new products, a new Star Wars film, which can be very popular. PROFANO began to choosing advantages of internet in designing and exploring. Currently, SEGLAR has a large numbers of fans, including children and kids. The company pays off more attention to reflection of shoppers. The company expands the market in many countries.

Weaknesses

The retail price is above other gadgets and the organization does not have enoughhypostatic retailers to satisfy the consumers. Many LEGO products sell in department stores and retail stores. It is not necessarily convenience pertaining to consumers to buy products. The high cost of production products.

Opportunities

LEGO items sale is involved about periods. The peak of sales in one year can be during institution holidays, specifically Christmas (Yi 2009). The consumers are not any concerned about age range. LEGO products are no age-limited toys and anyone can easily collect PROFANO products. The Asia marketplace has the great potential.

Threats

The substitute is the menace, which are free online games. Online games impact the LEGO revenue, however , PROFANO has the solutions. For example , increase products for making it technological.

Analysis of current strategies

Currently, PROFANO redesign the distribution route to lowering the pumping up distribution price. As for this kind of, LEGO shut down 5 circulation centers in Denmark, Portugal and Philippines, establishes a great only fresh distribution center in Czech, which is controlled by DHL (walwenfanyi, 2012). Lego keep interacting with customers to get more details the regarding market demands, which will take the strength of the company. Now the company develops video games based on the LEGO products by cooperating with video game firms. The company cooperates with film businesses to making movies as well (walwenfanyi, 2012). These kinds of cooperation provides bee an element of LEGO Group that has long history. These actions take those strength and therefore are the solutions to face risks. Articulation of key problems and/or trouble

How to decrease the manufacturing expense?

Even though LEGO Group grows up continuously and speedily, its customers can not follow the increasing rate? What should the company do? How to expand the Asia market?

Tips

Expense leadership strategy

Expense leadership technique forces on reducing price to maintain competitive advantages and relative to standardised products. To achieving price leadership, the business must purely control costs in the management, will reduce costs as much as possible. Considered the Asia industry, Costleadership tactical is a good decision. There are even more developing countries in Asia, so the existence standard is leaner than The european countries. If PROFANO can reduce the price, you will find consumers will certainly purchase products. However , produce area may be the weakness from the company and the company provides redesigned the distribution channels. There are no longer space to reducing the fee.

Differentiation technique

Differentiation approach refers to a means to00 make their products and competitors’ products have got obvious variations. The main of this approach is to get some good unique value to consumers. For LEGO Group, this kind of strategy’s rewards are that the firm’s development system that pays more attention to customers demand may be appeared. LEGO’s consumers possess brand loyalty and there are an incredible number of fans inside the LEGO Team. There are some hazards about differentiation strategy. When the company goes in the Asia market, the firm will face the lower-cost imitation.

Focus technique

Focus strategy gets the harmony between cost leadership technique and differentiation strategy. Businesses can provide a specific part of an sector more effectively than industry-wide rivals. This strategy meets the gadget industry a whole lot, because the major target consumers of this sector are kids. However , intended for LEGO, primary strategy is difficult to reach. The reason is that LEGO’s focus on consumers are zero age-limited persons, which is their strength.

In summary, differentiation technique is the best choice for LEGO Group. LEGO products were different from other equipments while it introduced in the beginning. LEGO has the wonderful brand dedication, so that a differentiated product tends to reduce the chances to get consumers to testing new products or other brands. Currently, the manufacturing value is a problem. Nevertheless , LEGO Group cannot work with low cost instead of good quality. The firm can produce well-differentiated goods to reduce customer sensitivity to price maximize. Using the quality products to cover the large producing expense. The company should use its talents that are manufacturer loyalty and innovation to expand the markets. The difference strategy as well candefend against new entrants, because if perhaps new entrants want to share the market via LEGO, they must produce precisely the same quality items at lower price, which is very hard to reach.

Conclusion

The above sentences recommend difference strategy simply by analyzing the industry, general environment, market environment as well as the company’s methods, capabilities, core competency, SWOT and current strategies. LEGO can use difference strategy since the approaches to current problems. Using the popular features of differentiation to taking strengths to masking weaknesses and achieving up the opportunities and avoid hazards.

Reference

Jan, WR, Stefan, HT & Daniela, B, 2012. ‘LEGO’, Harvard Business University [7 September 2014] Waiwenfanyi, LEGO expertise analysis, 2013. Available coming from: < http://www.waiwenfanyi.com/fanyi-1492.html>[9 Sept 2014] Yi, FL 2009, “LEGO sales strategic plan, Dongding. Available from: [9 September 2014]

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