MT 460 MT460 MT/460 Unit 6_Lego_Case_Study

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MT 460 MT460 MT/460 Unit 6_Lego_Case_Study

Unit Six: Lego Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: name Professor: Dr. Andryce M. Zurick, PhD, EBC Date: November 26, 2016

Lego Case Study
Company Name: Lego
Topic of the Week: Short-term objectives and Outsourcing proposition
Synopsis of the Situation
Lego was established in 1932 by Ole Kirk Christiansen to manufacture hiswooden toy designs (Pearce & Robinson, 2013, p 12-2).

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MT 460 MT460 MT/460 Unit 6_Lego_Case_Study

Unit Six: Lego Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: name Professor: Dr. Andryce M. Zurick, PhD, EBC Date: November 26, 2016

Lego Case Study
Company Name: Lego
Topic of the Week: Short-term objectives and Outsourcing proposition
Synopsis of the Situation
Lego was established in 1932 by Ole Kirk Christiansen to manufacture hiswooden toy designs (Pearce & Robinson, 2013, p 12-2). The name Lego comes from “leggodt” which is Danish for play well; it also translates to “I put together” in Latin (Bellis, nd). Lego’s motto, “Only the Best is Good Enough” shows Lego’s commitment to quality.
This company has stood the test of time and was named the “Toy of the Century”by Fortune Magazineand the British Association of Toy Retailers (Pearce & Robinson, 2013, p 12-5). The design was simple in theory, however there are over 900 million possible combinations that could be made from just six eight-studded Lego bricks of the same color (Pearce & Robison, 2013, p 12-5).
In 2004, Lego faced bankruptcy after changes in the organization created an internal crisis (Pearce & Robinson, 2013, p 12-6). Legos planned diversification created inefficiencies which confused consumers as well as employees. Licensed products such as Star Wars and Harry Potter had far too many pieces that were not interchangeable with the core Lego product.
This slowed production and distribution rather than boosting growth and sales as designers had anticipated.Lego Group partnered with Flextronics to optimize the global supply chain through outsourcing production and streamline business operations to provide efficient cost saving strategies (Pearce & Robinson, 2013, p 12-11).
Both companies went into this alliance with the faith that the expertise and knowledge of these two entities would carry them forward. The process turned out to be more eye opening than cost saving. Lego had long relied on the expertise of their manufacturing units in Denmark and did not have streamlined processes or procedures in place.
Without this information, the process got bogged down quickly and while quality didn’t suffer, both companies came to the realization that the situation was not ideal (Pearce & Robinson, 2013, p 12-2).

MT 460 MT460 MT/460 Unit 6_Lego_Case_Study

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