The Business Side of LEGO

Lego Facts

The Daily Mail has a a great story by James Delingpole on the business side of LEGO: When Lego lost its head – and how this toy story got its’ happy ending.

“In 1998, Lego posted a small loss; in 2003 a much bigger one; then in 2004, carnage.”

“Then he consulted old colleagues at the Massachusetts Institute of Technology (where he studied for a PhD in business and economics), who told him Lego is the ideal way for a child to learn how to think systematically and creatively – something that was confirmed to him by a cover story in Time, in which the Google founders said that it was Lego that had shaped their young minds.Then it dawned on him: the problem lay not with the product, but with the company’s attempts in the Nineties to make itself more modern and relevant in the age of video games. It had attempted to broaden its appeal to the young female market; it had tried to become a lifestyle brand with its own lines of clothes and watches; it had built more theme parks. But in doing so it had neglected its core business.”

“Thinking up brilliant new ideas, though, is only half the battle. No new product can be developed unless it fits perfectly within the Lego template. It must be a challenge to build (which is what sets Lego apart from the similar-looking but readymade products of rival Playmobil); it must be robust enough, once constructed, to survive rough play without falling to bits; and it must fit in with Lego’s family-friendly, cross-generational ethos.”