An outsourcing journey the end cdt malcom brown cdt xander bo kim cdt paul song lego group. In order to survive the largest internal financial crisis in its roughly 70 years of existence, the management had, among many initiatives, decided to offshore and outsource a major chunk of its production to flextronics. An outsourcing journey found in the cases section of. Once you finished the case analysis, time line of the events and other critical details. The company is still owned by the kirk kristiansen family who founded it in 1932. Despite the bright forecasts, the collaboration did not fulfill the. Lego outsourcing journey free download as powerpoint presentation. By 2003, sales had dropped by 26 per cent and in 2004 by a further 20 per cent. Founded in 1932, the lego group is a privately held company headquartered in billund, denmark. Closely adhere to the attached case study analysis template. An outsourcing journey harvard case study solution and hbr and hbs case analysis. An outsourcing journey case solution, the latest travel adventures years 20042009 had taught the fifth largest toy manufacturer in the world lego group. The most drastic change made by lego group to turn around the business was outsourcing to flextronics, a leading multinational electronics manufacturing services provider. The first brick we made over 60 years ago is as culturally relevant today as it always was and still fits too.
Intereslng facts the lego group made over 31 billion lego elements in 2010, or legos. Assistant professor, strategic management and globalization. An outsourcing journey case study solution, in recent years, and an adventurous journey from 2004 to 2009 he taught the fifthlargest toy maker in the world the company lego group. An outsourcing journey case solution, the lego group the importance of managing the global supply chain effectively the last few years rather adventurous journey from 2004 to. The vision of lego group is to inspire children to explore and challenge their own creative potential lego now ranks 4th in the world as a toy manufacturer. The last years rather adventurous journey from 2004 to 2009 had taught the fifthlargest toymaker in the world the lego group. Lego outsourcing journey enterprise resource planning. Lego group s outsourcing contract with flextronics was a leap of faith that perhaps a highly organized contract manufacturer could help sort out the supply chain issues that plagued the company. Third, this article looks into recent attempts by the lego company to bring the. There are over 915 million ways to combine six lego bricks. Lego group an outsourcing journey case analysis free essays.
Mt 460 unit 6 case study analysis the lego group by. Link to article what did the lego group learn about outsourcing from the flextronics collaboration. Apr 10, 2012 the lego group turned its 50 year old strategy of high. An outsourcing journey jorgen vig knudstorp was appointed as the companies ceo. Lego bricks are core products preschool creative building play themes. What were legos main expectations and learnings from the relationship with flextronics. In exhibit a, i used the porters five forces model. It turns out that one of my mostread posts over this past year contained this example of a customer journey map from lego. Mar 04, 2010 it turns out that one of my mostread posts over this past year contained this example of a customer journey map from lego. A supply chain transformalon helped put the beloved toymaker back together again. Its motto, only the best is good enough, had stuck with company since 1932 when ole kirk christiansen, a danish carpenter, established the company in the small town of billund in jutland, denmark, to manufacture his wooden toy designs. The lego group, is a toy manufacturer based in denmark and is perhaps best.
The lego group has also built several amusement parks around the world, each known as legoland, and operates numerous retail stores the company was founded on 10 august 1932 by ole kirk christiansen. Closely adhere to the case study analysis template by clicking on the hyperlink. The lego group has also built several amusement parks around the world, each known as legoland, and operates numerous retail stores. An outsourcing journey case solution, the company, after facing crisis, changed the ceo of the company in the year 2004. Lego corporations large scale outsourcing has created so many problems that there will not be any downsizing of jobs in danish factories in 2007. The last years rather adventurous journey from 2004 to 2009 had taught the fifthlargest toymaker in the world the lego group the importance of managing the global supply chain effectively. An outsourcing journey found in the cases section of your digital book.
Download file to see previous pages the paper tells that unlike in the past century when the competitiveness of business environment was defined on the basis of the assets that firms owned, competitiveness in the present century is defined by intangible capabilities. The lego groups top management consists of an executive leadership team made up of 10 members and a board of directors. Business process outsourcing to india coloplast as organizational. You must be logged in to view this material casecent.
Outsourcing vs insourcing for this post, i am sharing with you the individual paper that i wrote for my global operations and supply chain management class in ie business school. Securing sustainable sourcing via fsc certification. Our most wellknown product to do so is the lego brick an amazing play system for both kids and adults. Lego bricks are core products preschool creative building play themes licensed products. An outsourcing journey 822012 introduction 2004 began an especially difficult period for the lego group, which entered into a financial crisis resulting in a deficit of 1. This research is being carried out to discuss the competitive environment of the toy industry, and how it relates to legos strategic choice. This sudden change in its sourcing strategy posed lego management with a number of caveats.
Legos outsourcing journey strategic decision making. The company became aware of the inflexibility in the supply chain of the. Legos outsourcing journey strategic decision making coursera. Multinational corporation founded in 1932 in jutland, denmark 7000 employees worldwide by 2009, 5th largest manufacturer of toys by sales volume products sold in more than countries products.
Lego group to begin outsourcing lego group to outsource major parts of its production to flextronics earlier today, lego employees were notified that the greater part of the companys production will be outsourced to an electronics manufacturing services company. It is best known for the manufacture of lego brand toys, consisting mostly of interlocking plastic bricks. The instruction from the professor was to scan the recent press, to select a news message and prepare a written analysis and interpretation of what had happened. The lego group is now part of a global reality with continued change of production, ownership and sites. The lego group is a danish toy production company based in billund. What did the lego group learn about outsourcing from the. It has also been seen that the developed nations are more than happy to outsource their work and set up offshore avenues in order to earn revenues and make the most out of their business. An outsourcing journey introduction ole kirk christiansen founded the lego group in 1932. Moreover lego group during that period relied to roughly 1.
Just like other industries, toy industry has witnessed changes in its competitive environment. Building the first family business constitution in china. Later in the year, a crossfunctional group of executives gathered at the companys headquarters to discuss the status of the asian initiative and the associated risks. In addition to defining the process for creating these customer journey maps, the research also identified three areas that are critical for making them valuable. An outsourcing journey case solution, the latest travel adventures years 20042009 had taught the fifth largest toy manufacturer in the world lego group the importance of effective manageme. Ole kirk christiansen, danish carpenter manufacture his wooden toy designs good play enriches a childs life. Building a global marketing and communication company in china. Achintya arun avishek manish pankaj prashant slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Nov 19, 2008 the parties jointly decided that the lego group will take over lego production from juarez, mexico and nyiregyhaza, hungary. In 1958 the brick in its present form was launched. The lego group, is a toy manufacturer based in denmark and is perhaps best know for the lego brick, which has been voted the toy of the century on several occasions. On 1 january 2012, the lego group announced a major new initiative to improve market penetration in asia.
Over the past 70 years, the lego brand has successfully built a toy dynasty and worked their way into the hearts of. The outsourcing process can be defined as the process of establishing and managing a contractual relationship with an external supplier for the provision of capacity that has previously been provided inhouse. The lego groups quality journey in the years to come quality management is a key for the continued success of the lego group. Warehousing strategy at volkswagen group canada inc. The lego group analysis in this assignment the lego group are examined by using a pestel analysis turner, s. Focus on the following zero down on the central problem and two to five related problems in the case study.
Over the last couple of years the company has reported record revenue and profit number. In exhibit a, i used the porters five forces model to help identify and label the threats, demands. The lego bricks are all part of the lego system, which essentially means that they can easily be combined in innumerable ways and just as easily be. It then appeared one of the final chapters of legos. An outsourcing journey case solution, the lego group the importance of managing the global supply chain effectively the last few years rather adventurous journey from 2004 to 2009 had taught.
In fact, on any list of the most beloved brands in the world, lego would place near the top. The lego group is a privately held company marketing essay. Nov 12, 2010 outsourcing strategy supply chain management. In order to survive the largest internal financial crisis in its roughly 70 years of existence, the management had, among many initiatives, decided to. In 1934, his company came to be called lego, from the danish phrase leg good, which means play well. The lego group, famously ran into financial difficulties at the beginning of this century and much of this could be attributed to organisational inefficiencies larsen et al. Financial analyst before joining trader media group. Shift to offshore outsourcing problem of bottle necks large stocks of many different components need for an urgent transformation in all major. This outsourcing relationship between lego and flextronics is of special interest to us because evidently something went wrong so that lego backsourced the. Lego group to begin outsourcing lego group to outsource major parts of its production to flextronics earlier today, lego employees were notified that the greater part of the companys production will be outsourced to an electronics manufacturing services company, flextronics, over the coming threeyear period. Olga grishko, willie macatee, fallon murphy lego company overview. The lego group employs nearly 9,000 workers and its own product, lego brick can be found in over countries.
Besides the direct quality and production costs, imagine the number of meetings, the hours of engineering and executive time, and the loss of employee morale that was sunk into this fiasco. This outsourcing relationship between lego and flextronics is of. How could the company use this knowledge constructively in the future. A presentation on the growth of lego in the face of competition and takeovers. Please utilize this template format for this assignment.
The lego group is a privately held company based in billund, denmark. The lego group is now part of a global reality with. The lego groups quality journey in the years to come. The internal turmoil lasted through 2009 as the leading toy manufacturer, famous for the signature lego brick. Building strategy case study analysis, subjects covered business growth competitive strategy licensing productivity recognition by darren meister, paul bigus source. To understand strategic risk management at the lego group, you need to understand the companys strategy. In this project we will analyse one specific outsourcing agreement that lego made. Global brand, local knowledge, schneider electric global account management semiconductor manufacturing international company in 2011 walmart china. The 18cs model for a successful longterm outsourcing. The name lego came from the abbreviation of two danish words which are leg godt, which means play well. Explain how the development of strategy at the lego group reflect the key characteristics of strategic management outlined in section 1.
This is consistent with the first step in developing strategic risk management in an organization. The one with flextronics an american company providing electronic manufacturing services. Outsourcing to external producers might lead to an increase in production process complexity, which did happen in legos outsourcing case with no prior largescale outsourcing experience, decision to carry out such an extensive project wasnt. Case 5 case 5 lego group an outsourcing journey 1 what. It is best known for the manufacture of legobrand toys, consisting mostly of interlocking plastic bricks. An outsourcing journey prepare a case study analysis of case 12. Building strategy free download as powerpoint presentation. For almost 70 years, lego experienced steady growth. It should be kept in mind here that this is a symbiotic relationship, benefiting both the parties on a consistent basis.
Lego is one of the worlds leading brands, and is therefore meticulously protected. An outsourcing journey case study solution, analysis the company, in the year 2004, faced financial crises and decided to outsource most of its products manufacturing to the company flextronics. Lego group to begin outsourcing raving toy maniac the. An outsourcing journey case study solution, in recent years, and an adventurous journey from 2004 to 2009 he taught the fifthlargest toy maker in the world the company lego group the importance. Danish company lego outsourced most of its manufacturing activity. The plan was to cut the workforce in billund from 1200 to 300, and outsource the jobs to their partner flextronics in kladno czech republic. This is when the lego group and ferrari launched an agreement to make lego sets based on the iconic race cars. Top management set the overall tone and philosophy of the com. The lego group began in the workshop of ole kirk christiansen, a carpenter from billund, denmark, who began making wooden toys in 1932. Summary of the case the lego groups vision was to inspire children to explore and challenge their own creative potential. Case 5 case 5 lego group an outsourcing journey 1 what were. Mar 01, 2014 lego group an outsourcing journey presented by. At the lego group, our mission is to inspire and develop the builders of tomorrow.
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