Write a brief memo addressed to the CEO of LEGO outlining your assessment (with justification) of
what “generic strategy” works best for LEGO. (approx. 40% of memo)
Additionally, explain to him why his strategy of “constrained innovation” implemented during the
turnaround succeeded at LEGO. (approx. 60% of memo)
MEMO
TO: Niels B. Christiansen, CEO of Lego
FROM: Afzal Masra
CC: Dr. Deepak Somaya and Dr. Sandra Corredor, Giess School of Business,
The University of Illinois at Urbana-Champaign
DATE: February 2, 2021
LEGO’s “generic strategy” should be Cost Leadership strategy, as they should want to
focus creating good value of the product as Lego are unique innovation and stands out with kids
and adult. The reason this strategy is beneficial is to keep away competitors from entering the
market or keeping up with the pace of the toy industry. LEGGO’s competitors are not any other
company who makes the same concept of toy but all the company that makes toys for kids,
because kids are their main target market. The cost leadership strategy will help them compete
with other toys factory as well, going any other route will throw them out of the race against
their direct competitor and indirect competitor.
Lego also has a brand name behind them, they are very famous among kids and adults
because of their existence in the business for the last 70 years. Also, they have various playing
stores in the mall or producing their concept movies that connect with the audience directly.
Lego toys are call blocks, but they have replaced the word blocks with Lego and that is
connecting with audience at the level where the brand is more powerful. I like to give kudos to
Lego team. We all know that didn’t happen overnight, it took years - The expansion has also
given the brand loyalty and fan-based within their followers. So, Lego has customers who can
pay a hefty price for their toys, but Lego needs to continue targeting all customers to become the
leader in the toys industry.
The constrained innovation was a game changer because it brought audience connected
with the LEGO toys. Introducing toys related to movies, celebrity or specific places (Gas Station,
House, Racecourse). The customer had choices with LEGO toys based on their hobbies and
passion, so they were targeting everyone with common interest. This innovation brought some
setback as well – the whole concept was very expensive for the company. If any part is missing, the
whole toy