Lego Case Study 2014
!
!
!
!
!
!
!
!
!
!
!
!
The LEGO
Case Study
2014
!
!
!
!
!
!
!
!
!
!
The A
CONTENTS !
!
!
1!
!
2!
!
!
3!
!
4!
!
5!
!
6!
!
7!
!
Introduction!!
!
!
Difficult start to the decade 2001.!
Signs of Recovery 2002.!
Hopes dashed - 2003.!
LEGOLAND parks.!
LEGO Brand Stores.!
The Knudstorp Review.!
8!
!
Financial Focus - the !
Oveson addition. !
9!
!
Back to basics and the limit to adjacencies. !
!
!
10 ! Developing the strategy ! why do we exist? !
!
11 ! First the action plan - first
!
things first. !
!
12 ! Summary and Conclusions!
!
13 !Appendices !
!
13.1 Knudstorp on!
!
communication !
!
13.2 References and slides
The A
1 Introduction !
In 2014, LEGO® announced record results. In the financial year 2013, revenues had increased by 10% to 25.4 billion danish krona. Profits before tax were 8.2 billion DKK. The company had once again delivered an impressive operating margin of 33% before tax.!
!
In US dollars, the company had achieved
$4.5 billion of revenues and profits of $1.5 billion. Revenues had increased from just over $1 billion some seven years earlier.
LEGO® had replaced Hasbro to become the largest toy company in the world second only to Mattel. !
!
In just eight years, revenues at the Danish toy manufacturer had tripled. The company had turned around a loss of 2.5 billion krona in the financial years 2003 and 2004 to an operating margin the envy of high tech stocks around the world.!
!
The transition had boosted prices and gross margins from 56% to over 70%, slashed operating costs from 70% to 37% of turnover and doubled sales per employee. !
!
Return on equity had increased from zero to almost 70% and equity values had increased from 400 million to over 11 billion DKK. Valued on par with NASDAQ’s Facebook, the company would be worth over $150 billion. Not bad for a toy company based in Denmark. !
!
The future had not always looked so promising. In presenting his report to management in
June 2003, Jørgen Vig Knudstorp,
!
!
!
!
!
!
!
!
!
!
!
The LEGO
Case Study
2014
!
!
!
!
!
!
!
!
!
!
The A
CONTENTS !
!
!
1!
!
2!
!
!
3!
!
4!
!
5!
!
6!
!
7!
!
Introduction!!
!
!
Difficult start to the decade 2001.!
Signs of Recovery 2002.!
Hopes dashed - 2003.!
LEGOLAND parks.!
LEGO Brand Stores.!
The Knudstorp Review.!
8!
!
Financial Focus - the !
Oveson addition. !
9!
!
Back to basics and the limit to adjacencies. !
!
!
10 ! Developing the strategy ! why do we exist? !
!
11 ! First the action plan - first
!
things first. !
!
12 ! Summary and Conclusions!
!
13 !Appendices !
!
13.1 Knudstorp on!
!
communication !
!
13.2 References and slides
The A
1 Introduction !
In 2014, LEGO® announced record results. In the financial year 2013, revenues had increased by 10% to 25.4 billion danish krona. Profits before tax were 8.2 billion DKK. The company had once again delivered an impressive operating margin of 33% before tax.!
!
In US dollars, the company had achieved
$4.5 billion of revenues and profits of $1.5 billion. Revenues had increased from just over $1 billion some seven years earlier.
LEGO® had replaced Hasbro to become the largest toy company in the world second only to Mattel. !
!
In just eight years, revenues at the Danish toy manufacturer had tripled. The company had turned around a loss of 2.5 billion krona in the financial years 2003 and 2004 to an operating margin the envy of high tech stocks around the world.!
!
The transition had boosted prices and gross margins from 56% to over 70%, slashed operating costs from 70% to 37% of turnover and doubled sales per employee. !
!
Return on equity had increased from zero to almost 70% and equity values had increased from 400 million to over 11 billion DKK. Valued on par with NASDAQ’s Facebook, the company would be worth over $150 billion. Not bad for a toy company based in Denmark. !
!
The future had not always looked so promising. In presenting his report to management in
June 2003, Jørgen Vig Knudstorp,