Lego is such a fantastic brand and one that everyone aspires to. However, this article is proof that you should never become complacent despite the heights you reach.
This is proof that you need to re-invent yourself and keep up to date with market trends. With the business nearly going bust, Lego had not realised this, until they were given some advice.
Here are some fascinating headlines that I have taken from the article:
- In 2003 the business was in $800m of debt and sales were 30% down year on year
- In 2015 they had profits of $660m! Now that is a turnaround!
-The factory manufacturers 120m bricks per day!
- In 2015 they sold 75bn bricks!
- The turnaround has been down to their movies, computer games, theme parks as well as licensed products.
- They focus on the kids of now and tomorrow. Not the past. They refuse to bring out old models for anniversaries.
- Their company motto is 'Only the best is good enough'. They have certainly gone back to this in their way or working.
From its founding in 1932 until 1998, Lego had never posted a loss. By 2003 it was in big trouble. Sales were down 30% year-on-year and it was $800m in debt. An internal report revealed it hadn’t added anything of value to its portfolio for a decade. In some ways Lego CEO Jørgen Vig Knudstorp is a better model for innovation than Steve Jobs Consultants hurried to Lego’s Danish HQ. They advised diversification. The brick had been around since the 1950s, they said, it was obsolete. Lego should look to Mattel, home to Fisher-Price, Barbie, Hot Wheels and Matchbox toys, a company whose portfolio was broad and varied. Lego took their advice: in doing so it almost went bust.