Lego is perhaps one of the best and popular toys for kids. It is educational, and most of all it develop kids mental and creative ability. That was before, as at one point in time, the toy became boring. It seems everything is just simply putting in blocks together, and deciding what you want to put up while making the best color combination of course.
Problem
The company’s problem began during the late 1990s when they stopped focusing on design. They wanted to extend the brand by venturing off on wild forays into new product development. A good example if the Galidor, a legendary bomb inside the walls of Lego. The Galidor line was launched in 2002 and was all about action figures. But the action figures where quite different, it didn’t require building skills, the hallmark of the traditional Lego.
Moreover, they branched into a totally new business line in which they have little knowledge about. The company co-produced a kid’s TV show called Galidor: Defenders of the Outer Dimension. It was meant to sell their new toy line. But it sparked little interest and when it went off-air, the sales of the new toy line faded too.
Solution: Design Transformed
Just as design pushed Lego at the brink, it helped bring the company back. Instead of giving designers free rein to conjure up their most brilliant creations, Lego tied their hands. Instead of rubber-stamping nearly every request for a new component, what Lego did was simple. They put each one to a vote, and the highest vote-getters’ design are put into use. Thus, it eliminated rarely used pieces, slashing the total number of components to about 7,000.
Conclusion
Design is Lego’s key competitive advantage. Over the years, there were several players emerged including that of Mega Brands with nearly half the price cheaper.
But then, with the competitive and dynamic management team, if there is a reason they rose back in the market, then there must be a reason to stay.