Presented by Team Diversity

Burhan SaiyedHung PhanHongyu HuaSiddharth Venkatramanan

Recommendations

Overall strategy: Product differentiation and alternative market Product development through innovation Expand global market share Enhance social interaction

Agenda

LEGO strategic position Product innovation Global positioning Technology to build the future Conclusion

LEGO strategic position

Where is LEGO currently?

2006 2007 2008 2009 2010 -

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Revenue Operating Profit Net Profit

Value (mn of DKK)

LEGO strategic position Strong Revenue Growth with 5-year CAGR of 15.5%. Costs are controlled well as Net Profit grew 23.6% for

5 years.

LEGO strategic position

2007 2008 2009 20100%

20%

40%

60%

80%

100%

ROE ROA

2006 2007 2008 2009 2010 -

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Net Profit Per Employee

Millions DKK per employee

Restructuring efforts have led to better margins and company growth is in control

LEGO strategic position

LEGO vs. Competitors

Lego MEGA Mattel Hasbro0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

3500

376

6266

4285

690

3

665396

Revenue Operating cash flowMillions of USD

Despite lower total revenue compared to Mattel & Hasbro, LEGO boosted a higher operating cash flow thanks to efficiency

Where should LEGO go next?

• Robust internal operation• Strong position compared to

competitors

LEGO strategic position

Top 10 Country represent 2/3 of the global toys revenue. United States represent the largest market share for a single country.

Unite

d St

ates

Japa

n

China

Unite

d Ki

ngdo

m

Fran

ce

Germ

any

Brazil

Austra

liaIn

dia

Canad

a0%

5%

10%

15%

20%

25%

30%26.30%

7.50% 6.70%5.40%

LEGO strategic position

Overall Strategy

Product differentiation Global Expansion Asia & Australia

Product Innovation

LEGO strategic position

Product Innovation

Build LEGO’s own brand

TOP Product lines

Super HerosLord of the RingsHero FactoryPirates of the Caribbean Star WarsHOBBITNINJIAGOCHIMACITYFRIENDS

60% Licensed

TOP Product lines

Super HerosTM

Lord of the RingsTM

Hero FactoryTM

Pirates of the CaribbeanTM

Star WarsTM

HOBBITTM

NINJIAGOCHIMACITYFRIENDS

Product Innovation

LEGO ≠ Movie toys manufacture Success from LEGO generic brands Develop More generic brands

Cartoon Serials Comic books Online games

Build LEGO’s own brand Experiential features

2012 Toy Trend (Researched by Toy Industry Association) Generation App Many Ways to Play! Save ‘n’ Splurge

Product Innovation

Product Innovation

ATOM Express Toys ATOMS is a system of plug-n-play sensors,

motors and logic blocks. Magic Wand iOS control

Source: http://www.kickstarter.com/projects/atoms/atoms-express-toys

Product Innovation

Build LEGO’s own brand Experiential features Toy to live

Product Innovation

Gamer Provider

NintendoPlay StationXBOXWiiSmartphone

$ 74Billion…

Product Innovation

Integrate LEGO characters into other platforms LEGO bricks = Access to play a video game

Global Positioning

Product InnovationLEGO strategic position

Global Positioning

Global toy industry market value Global toy market growth by regions

Market saturation

Amount spent per child

No of children

2007

2008

2009

2010

2011

$76.00 $78.00 $80.00 $82.00 $84.00 $86.00

$78.08

$77.22

$79.55

$83.91

$84.07

Global toy industry market value

USD Billions

Year

Recession

Expected market value of $100 billion by 2015

http://www.statista.com/topics/1108/toy-industry/

Source: NPD Report: Toy Industry 2011

http://www.statista.com/topics/1108/toy-industry/

Australia UK Canada Japan France USA Germany Brazil China India0

50

100

150

200

250

300

350

400

450

500

401

361

296 288308

280244

5120 6

486

365

317 312 307

284

247

59

236

Toy spending per child

20092010

USD

Sno No of Kids (millions)

Country Spending/kid

10. 4.0 Australia $486

1. 352.8 India $6

2. 238.3 China $23

3. 62.4 USA $284

4. 53.3 Brazil $59

5. 16.9 Japan $312

6. 12.0 France $307

7. 11.00 Germany $247

8. 10.8 UK $365

9. 5.4 Canada $317

http://www.statista.com/topics/1108/toy-industry/

Global Positioning

Invest and expand in Canada, Australia, Brazil

Explore opportunities

in India, China & Japan Culturalization of

games

Technology to build the future

Product InnovationLEGO strategic position

Global Positioning

Technology to Build the Future Aid to Global Presence Building Alternative Sources of Revenues Nurturing A Community rather than a

Corporate Brand

Adopting Social Media

Source: MarketingProfs, Internet World Stats, 2012

Not just a brand… a Community

Source: www.rebrick.lego.com

Do’s and Don’ts

DO: Unrestricted access Content Verification and Recognition Hold competitions for the NEXT BIG THING!

DON’T: Control content Market your products

Idea factory for …

LEGO MUSEUM

Currently has prime location at Rockefeller Center

Extension of Idea: LEGO Museum of Modern

Creations!! Draw talented individuals

hold yearly competitions indowntown Manhattan to garner media press and foreigner interest

VIDEO GAMES ARE HERE TO STAY

SKYLANDERS MANIA!! Recorded $1 Billion revenue as of Feb’11 2013 Target Age: 3-8 year olds Toy To Life Category Founders

Source: VentureBeat “Skylanders crosses the $1 Billion revenue mark with over 100 Million toys sold. Jeffery Grubb.

LEGO VIDEO GAME PROPERTIES Indiana Jones Batman Marvel Avengers Lord of the Rings Star Wars

Own Brands

ALL TOGETHER!!!

Conclusion

Enhance social interaction

Product development through innovation

Expand global market share

USA Japan Greater China Italy France UK Germany South Korea Mid East0

10

20

30

40

50

60

48.1

18.1 17.7 17.5

13.3

9 8.3

6.35.3