Read the Predicament Study 1-1, LEGO. Rejoin to the subjoined questions:
CASE STUDY 1-1 Lego
Lego has hanker been an diligence guide in manifestation's toys after a period its primal yet choice erection block-style effects. A Danish carpenter whose race peaceful owns Lego today rested the secretly held posse in 1932. But by 2004, the posse rest itself plug to cessation, losing $1 favorite a day. A new CEO was brought in, and after a periodin five years sales were sinewy, income were up, and naysayers who felt the new policy was going to trip were proved crime. In deed, sales, enrichments and income continued to be sinewy. Revenues grew from 16 billion Danish krone (DKK) in 2010 to balance 28 billion DKK in 2014, and in the similar epoch, acquisition closely doubled from 3.7 billion DKK to 7 billion DKK. After a period the likeness of high-tech forms of regalement, such as the iPod and PlayStation, Lego rest itself past ancient than mordant plane in the toy earth. When new CEO Jorgen Vig Knudstorp, a senior and bygone McKinsey consultant, took balance, the posse was struggling after a period impecunious execution, missed deadlines, hanker outbud spaces, and a impecunious gift chronicles. The most received toys constantly would be out of accumulation, and the posse was disqualified to ship sufficient effects or control the formation of its past intricate sets. Retail stores were frustrated, and that translated into declining rejection boundlessness and so-far to affair losses. Knudstorp radical all of that. He reached out to top retailers, cut absorbs, and ascititious waste links to the contribute tie. For bud, earlier to the new policy, 90% of the components were used in upright one contemplation. Designers were submitd to reuse components in their new effects, which resulted in a diminution from environing 13,000 divergent Lego components to 7,000. Consequently each component's fashion could absorb up to 50,000 euros on medium to educe, this diminution saved suggestive absorb. Lego was public for its unwritten blocks and components that would sanction manifestation to construct upright environing anything their humor could educe. The new policy broadened the effects, targeting new customer segments. Lego controlrs educed effects installed on themes of received movies, such as Star Wars and the Indiana Jones train. The posse moved into video games, which featured spirited Lego characters casually installed on movies. The posse educed a effect policy for adults and selected the communities who had already set up thousands of Web sites and blogs featuring Lego creations. It embraced the association who project of Lego as a way to educe art rather than singly as a erection toy. And the posse contemplationed a verse of Legos aimed at girls consequently the preponderance of its effects had primarily targeted boys. The refinement of Lego radical to one that refused to confirm quarrel. The posse's gone-by showed a disposition to centre on novelty and creativity, frequently at the absorb of income. But that radical. “Knudstorp … made it unobstructed that results, not singly sensitiveness good-tempered-tempered environing making the best toys, would be inherent if Lego was to succeed… . Its affair may peaceful be fun and games, but launched close isn't,”20 describes the ordinary refinement at Lego. Some of the most thoroughgoing changes came from after a periodin the Lego texture texture. After its huge losses in 2004, Lego switched its employee pay texture, subsidy incentives for expend effect novelty and sales. Key execution indicators submit effect novelty that catalyzes sales period decreasing absorbs. Outbud stread dropped by 50%, and some manufacturing and distribution functions were moved to short dear locations, but the centre on disposition remained. The creation of reustalented stread alleviated some of the force on Lego's contribute tie, which in rotate helped its profound verse. Lego as-well remote into the indirect earth, extending into video gaming and indirect-interenjoyment games on the Internet. Thinking beyond the posse's preceding effect concepts cut absorbs period assuring real-stread feedback from customers over a global bargain. Additionally, Lego educed mark ambassadors who unconfused conventions over the earth to debate effect novelty and to construct communities of member customers. After a period increased enrichment, Lego controlrs considered entering the movie-making affair—a foolhardy propose for a toy posse. However, Lego's achievement after a period Hollywood-type enjoyment figures fueled its profit in a movie-making endeavor. The bud put forces on the IS aiding the affair. Order controlment and fulfillment were specially monstrous, resulting in the weakness to confront customer require. Employee controlment orders were neat as new employees were ascititious to aid the bud and concomitant locations. Effect contemplation and outgrowth, especially the indirect and video games, required new technology, too. To explain some of these problems, Lego controlrs used the similar mode they used for their blocks. They educed a modularized and standardized fabric for their IS, making it feasible to enlarge past promptly and add accommodation and functionality as it was needed. They implemented an integrated deed order that gave them new applications for rational principal controlment, operations aid, effect animation cycle controlment, and axioms controlment. The new orders and services, purchased from vendors such as SAP and IBM, simplified the IT fabric and the controlment processes needed to balancesee the IS. One controlr at Lego summed it up nicely, “The toy earth moves forwards constantly, and Lego needs to re-invent itself uniformly. Suggestive urbane re-shaping introduced new soul to the posse.” 21 He went on to say that simplifying Lego's IT orders and implementing an fruitful effect outbud process that was talented to guard disposition and absorb favorably poseed Lego to rejoin to the stable changing tread of the toy diligence.
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