Paola
Paola
Paola
Building the Future:
LEGO’s Strategy for Innovation and Growth
This case explores LEGO's strategy for future growth, focusing on expanding into aging population markets, integrating smart toys with digital services, and advancing sustainability. Through innovation and adaptability, LEGO aims to remain a leader in the evolving toy industry.
01
Project Overview
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Objective: Analyze LEGO’s current strategy and propose future directions based on internal and external factors.
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Focus: Design for aging populations, smart toys and connected services, and driving sustainability in consumer behavior.
02
Analysis
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Winning Aspiration: To remain the world’s most iconic toy brand while expanding into new markets.
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Where to Play: Global reach in 40+ countries, targeting families, schools, and adult hobbyists.
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How to Win: Innovative product design, partnerships (e.g., Epic Games), and sustainability leadership.
03
Key Insights and Strategic Tensions
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Internal: Strength in brand value, but challenges in transitioning to circular materials and digital expertise.
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External: Rising competition in eco-friendly toys and smart products; changing consumer preferences toward mindful consumption.
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Burning Platform: LEGO’s reliance on fossil-fuel-based materials must shift quickly to meet regulatory and consumer demands.
04
Strategic Recommendations
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Focus Areas:
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Aging Populations: Introduce LEGO Vitality for older users.
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Smart Toys: Develop LEGO Nexus for digital-physical hybrid play.
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Sustainability: Expand LEGO Circularity to drive eco-friendly consumption.
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Portfolio Alignment: These initiatives align with LEGO’s innovation intent to expand markets and maintain leadership.
05 Process Overview
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Analysis
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SWOT, PESTLE, Value Chain, Foresight Scanning.
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Outputs:
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Internal configuration assessment and external signal identification.
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Recommendations for future strategy with prioritization and sequencing.
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Steps Taken
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Defined LEGO’s current strategy using public reports and market data.
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Conducted internal and external analyses using foresight tools.
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Identified strategic tensions and opportunities.
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Developed actionable recommendations for future growth.
Outputs: Narrative, future-focused portfolio, and roadmap.
Impact and Learnings
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LEGO’s adaptability and innovation potential are strong, but it must address sustainability and digital integration quickly.
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The process reinforced the value of combining foresight with strategic tools to craft impactful recommendations.
05
Key Initiatives:
LEGO Vitality:
Voice-guided assembly instructions in multiple languages enhance accessibility for builders needing interactive support.
LEGO Nexus:
Smart Figures are interactive toys that blend physical and virtual play, offering expanded possibilities through internet connectivity.
LEGO Circularity:
Implement a global subscription service for renting, recycling, and trading LEGO sets. This integrated program will scale LEGO Replay and Brick Take Back, offering various incentives like tax receipts, LEGO cash, or points.
06
Financial and Numeric Justifications:
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Focus On: Inclusive Design for Diverse Need:
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USD $44.8B
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Focus On: Smart Toys
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USD $30.2B
over ten years for smart toys
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Focus On: Changing Consumer Behavior
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USD $27.5B
worth of LEGO bricks -
178.5B LEGO Bricks
can be introduced into this circular model
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07
Portfolio Value and Balance
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Highlight how the portfolio:
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Addresses short-term gains (core initiatives) and long-term growth (transformational projects).
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Demonstrates balance across innovation types (e.g., product, service, business model innovation).
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Reinforces the Innovation Intent and themes.
08
Prioritization and Phasing
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We used a triage assessment to prioritize our long list of ideas to ensure maximal fit with LEGO’s existing and core goods and service offerings.
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KT Scan
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timeline or roadmap
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Ambition Matrix
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The Process
