The WCCC/Pitt Connection Transfer Guide - Office of Admissions
WCCC 2012: The Lego Group - UBC
-
Upload
ben-cappellacci -
Category
Education
-
view
4.343 -
download
1
description
Transcript of WCCC 2012: The Lego Group - UBC
The Lego Group
Building Strategy
Just six bricks can be combined 915 million ways
AgendaIntroduction
Analysis
Strategy
Implementation
Risks and Mitigations
Conclusions
“A competitive strategy to continue the organization’s financial success and dominance in the toy market”
Expanding dominance in a toy market with opportunity and uncertainty
Licensing challenges
influencing product
New competitors taking market
share
Commoditization of Lego product
Uncertainty in Disney Licensing presents a challenge to future contracts
Lego has considerable investment in
licensed building sets
Lego Star Wars, Spider Man,
Indiana Jones
Disney’s recent acquisition of Marvel gives it rights to over
5000 characters
Disney favoured partner is Mattel
Marvel had agreements with
Hasbro to produce toys
Future of Disney licencing
opportunities is unclear
Hasbro has a strong past
relationship to Marvel
New Kre-O product launch could
increase royalty payment tolerance
Hasbro’s multiple product lines might act as
stronger incentive
Hasbro’s introduction of Kre-O is a significant threat to market share
Hasbro’s brand power
Enlarged marketing budget
Guaranteed Shelf Space
Popular Transformers brand
Compatible with LEGO blocks
LEGO has considerable product brand value
Hasbro cannot mention LEGO in its promotion
Failure to protect LEGO brand from competitors has lead to commoditization
MEGA blocks has challenged the
control over the brick ecosystem
All competing products will be compatible with
LEGO
Lego must focus on its brand
values
Brick Ecosystem to Lego Ecosystem
• Connect to consumers on multiple platforms
Brand Engagement
• LEGOs leadership in the market drives responses
Innovation Focus
• Focus on delivering value beyond blocks
Develop Experiences
“A competitive strategy to continue the organization’s financial success and dominance in the toy market”
Expanding dominance in a toy market with opportunity and uncertainty
Licensing challenges
influencing product
New competitors taking market
share
Commoditization of Lego product
High profile brand licensing is an easy revenue generator
Focus on Western Brands
Proven• Spiderman:
$100 million toy sales
Low Risk• Pipeline of
opportunities
Integrated Competition• Disney, Hasbro,
MEGA Blocks
License Brands in localized areas to increase product awareness
• Unproven brands• Higher risk potential• Lower competition means discount purchases
Lock in untapped licenses
• Anime • Cartoons and Movies• Popular Media
Purchase smaller brands in specific
area
Strategies to focus on New GrowthBuild Avoid
Brand Products
New Licensing Popular Licensing
Customization Standardization
Expand beyond North America
LEGO stores a proven concept in
North America
Bring to emerging markets with
localized content
Create an on the ground brand experience to engage new customers
Build Foundation with Lego Stores
Core Products• LEGO Themes• LEGO Games
Special Products• Localised
Content• Collectables
Media• PC Games• Ipad Apps• Comics
Interactive• Play Booths• Building set
Projections• Personalisation's
Engaging the Consumer: Virtual Media
World is going virtual
Average 6-year old has access to a mobile device
Mirroring virtual content is essential
to continued success
Engaging the Consumer: Virtual Media
Mobile Application• Augmented Reality• Stories/comics from licensed/non-licensed products• Games
Partnerships with Zynga for Facebook games
Engaging the Consumer: Point System
Localisation and customization tied to LEGO brand with Point System
Add value to all LEGO branded products
Network Effect – Each new product adds value to the system
Engaging the Consumer: Point System
Gaining points
• Buying products• Completing video game
achievements• Use of mobile app/Zynga
Facebook games• Any LEGO Theme Park
purchases
Engaging the Consumer: Point System
Why collect
points?
Customization of products
Exclusive DLCBuy products online or at a LEGO store
Theme Parks
Engaging the Consumer: Lego Account
Engage with online community• Upload pictures/videos of LEGO creations• Discussion boards• Share creative ideas
Track and manage points
Connect with LEGO
How is fits togetherGet Points Add Points Spend Points
Lego Packs Personalised -Lego Characters
Game Achievements Enter via: Collectable Content-Special Editions
Comic Purchases QR Codes Downloaded Content
Engaging the Consumer: Point System
Creates unique LEGO experience
Allows LEGO to tap into the creativity of its users
Gives LEGO consumer data that is hard to get through vendors
Risks and Mitigations• This would be a big problem• Mitigation would require extensive investments into
LEGO’s innovative capacity
Inability to procure new licensing agreements
• Hasbro’s Kre-Os do not have sufficient brand power• First mover advantage
Competitors copy our strategies
• LEGO grew revenue by 37% when the market increased by 13%
• Ecosystem will further mitigate brand switching
Competitors steal our market share
Implementation TimelineItem F M A M J J A S O N D J
Develop Objectives
Contract Developers
Product Development
Product Testing
Test Release
Feedback Implementation
Product Modifications
Store Modifications
North American Launch
Assumed CostsOnline content development
• Agency at $500k
Online content management• $500k per year
Store build-out costs• ($200-400k per store) * (50 stores) = $10 million
Marketing costs for emerging markets• ($250k year) * (40 markets)
New licensing agreements• ($1 million each) * (1 per market) = $40 million
Metrics of Success • Change in sales after
rolloutVs. Generic
Blocks
• Click through rate on point systemNetwork Effect
• Total sales of localised content
Local Engagement
Revenue Growth Expectation
20%• No further
licensing
25%• Estimated
impact given our strategy
30%• Best Case
Scenario
2011 Revenue: 20,818mm DKK
The LEGO Group
Non-Licensed Building Sets
Licenced Building Sets
Video Games
Board Games
Theme Parks
Stores and Merchandise
Online Website
Mobile Content
“Our ultimate goal is to inspire and develop children to think creatively, reason systematically and release the
potential to shape their own future –experiencing the endless human possibility”
Endless Human Possibility