Lego Essay

The 2000's has almost seen the death of LEGO. Because of its unlisted status, LEGO couldn't raise funds and capital through the sale of its securities. In order to raise money to run the company, LEGO borrowed and used the liquidity that it already had. However, today the situation changes. LEGO's borrowing become better and better due to its success in the market, which ensures that LEGO is safe to lend to.

Even if LEGO really has substantial capital and it could use the financial resource to take advantage of an opportunity, we cannot say that this resource is rare because there are a lot of competitors that also have capital to take advantage of the same opportunities, even raise at its will. On the other hand, compared with smaller competitors

After the failure of production outsourcing, LEGO has understood that it is a very important competence for its growth. So LEGO began to build new plants in some countries like Hungary, Czech, Mexico, Denmark and also a new plant in China in order to satisfy the Asian market. LEGO moved the plants to low-wage countries in order to reduce the produce cost, what’s more, in consideration of the number of regions, demands from different regions and shipping costs as well, the choice of plants’ location is really strategic: they move the plants nearby the core market. And they use state-of-the-art machinery and equipment which are valuable and rare for producing efficiently and with high quality. However, all of these are not costly to imitate, as any competitor can choose almost the same location for plants and buy the same equipment. Above all, it is just a temporary competitive advantage for LEGO, because its rivals might achieve the same modern facilities and equipment after a period of

Several of the new product lines and systems need a requirement for a high degree of technical and scientific skills. To achieve success of new products, LEGO introduced a new strategic innovation system after 2006. It is led by a cross-functional team: the Executive Innovation Governance Group. LEGO has chosen to divide responsibility for innovation across four groups, Functional groups, Concept Lab, Product and Marketing Development and Communication, Education and Direct. Each group performs its own functions. LEGO has different demand of innovation for each group and each group handles different areas of LEGO's business at different times. Since JVK became CEO, LEGO has put a high emphasis on the need for innovative capacity. This resource has become very valuable and rare. It is costly, tough and challenging to imitate. LEGO has effectively organized it, and this resource is also considered as a competitive