Strategic management Essay Example | Topics and Well Written Essays - 2000 words - 6

Strategic management - Essay Example After enumerating the internal and external business affairs of Lego, the essay emphasizes the drawbacks of the company and finds ways through which it may overcome its negativities. 1. Which stage of the industry life cycle is the Toy industry in? How has that affected Lego’s ability to gain market share? This is the period of globalization and liberalization when almost all the industries in the market are booming. International trade is at its zenith, when most of the business firms are enjoying the benefits of the growing market. Consumerism has become the catchphrase of the world economy in 21st century. Income levels of the developed economies are augmenting and the developing economies are emerging with high growth rates. At this stage per capita income levels of almost all the open economies in the world are improving. With the improvements in standard of living, the aggregate demand for luxuries and comforts has enhanced. Life cycle models are not only common to the l iving beings but also associate with industries. Even an industry begins, grows, becomes mature and finally collapse with time. This is not because an industry has life but because an industry’s existence depends on the consumers whose taste and preference changes with time. The toy industry is at its peak of life cycle, where more than thousand companies operate in the industry with high turnovers and revenues. In United States the industry generates high revenue of about $20 billion (Little & King Co., 2010). Top popular toy companies are Lego, Mattle, Hasbro etc. A big segment of the industry comprises of the game making companies like Sony, Microsoft and Nintendo. This industry manufactures a wide variety of toys like non-electric toys, children vehicles, preschool toys, stuffed animals, art & crafts, dolls etc. Toys are not only sources of entertainment for the children but also serve as basic academic tools to develop memory skills in them. Lego is a popular toy manufac turing company in Denmark, the headquarters of the company is in Billund. The company mainly engages in the manufacture of construction toys. The Lego bricks are generally colourful and can be used to make various types of toy cars or buildings. The growth of the toy industry has generated several positive externalities for Lego. The Lego group has exhibited unremitting growth since the last few years and the rates of growth have always been in double digits. The world’s best market for Lego bricks is U.S. Lego toys are marketed in more than 130 countries in the world. The company has a club of its loyal customers that comprises almost 4.2 million members. Today it can be hypothesized that on an average each individual in earth has approximately 80 Lego bricks to play with. Over the years more than 600 billion Lego elements have been manufactured (Lego, 2012). Figure 1: Lego House (Source: Lego, 2012) Producing bright and colourful bricks as toys, Lego have introduced a revol utionary change in the world of toys, where children may explore their creativity. The main driving force of the company is to encourage creative opportunities for all children.   Ã¢â‚¬Å"Our idea is to create a toy that prepares the child for life, appeals to the imagination and develops the creative urge and joy of creation that are the driving force in every human being†. The demand for Lego toys is increasing with time; accordingly the quantity of toy manufactured is also increasing. Figure 2: Experience