Lego Group
Autor: juz4funn2 • May 10, 2015 • Coursework • 2,883 Words (12 Pages) • 955 Views
Q1 Evaluate the external environment in which the LEGO Group operates in.
Conducting the external environment analysis will allow us to examine the opportunities and threats that the LEGO Group faced. We will go through the environment level using PESTEL framework followed by industry level using Porter’s Five Forces Framework.
- PESTEL Analysis
PESTEL Analysis | Positive | Negative | |
Political | |||
Economic | Highly seasonal | Presents uncertainty over sales | |
Geographical scope and market presence | Going into new market for higher growth | Stagnant and mature market | |
Social | Change in playing habits | Stop playing with traditional toys | |
Large female market | Diversify and take up more market share | ||
Technological | Growth in electronic toys | Might impact market share | |
Digital and new media age | Reenter into the digital area | ||
Ecological | Non-poisonous plastics | Leadership in production technologies | |
Legal | Expiration of patents | New competitor might arise | |
Compliance with local laws | Limited knowledge |
- Political
There is not much of a political factor surrounding the LEGO group.
- Economic
The business cycle of the toy industry is high seasonal that it poses some challenges for the LEGO group. This is illustrated in case whereby the found it to be a challenge with the sales being difficult to predict. The LEGO group is certain mature markets which are stagnant and could venture into high growth markets as mentioned in the case.
- Social
The changing demographic such as playing habits could deter children from playing with traditional toys. The female market presents opportunities for the LEGO group as their products usually attracts more boys.
- Technological
The growth in electronic toys and the emergence of digital and new media age could hinder the market share of the LEGO group. As seen in the case that they have not been successful in these area with the LEGO Universe and companies such as Bandai-Namco and Tomy-Takara raking combined sales of $6.5billion.
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