Lego Group - an Outsourcing Journey

The analysis based on Toy Industry acquaintance (2004) publication. LEGO operates in the roleplays and games sedulousness and has market share of to the highest degree 1.7% that places the fusion in fifth place glob totallyy. The largest markets for toys are the joined States and Europe, and the biggest consultation of the toys in term manufacturing footprint is China with about 95% of the production. The toy market can be single out into conventional and non- tralatitious traditional toy a market hold all toys but excludes photo games. Non-traditional toys consist primarily of motion-picture show games. The toy intentness has been experiencing significant changes since the 1990s due to the proliferation of the video games and consumer electronics. moving-picture show games and consumer electronics in general gave children greater choice in terms of leisure and entertainment which resulted in declining demand for traditional toys. some other change in the toy in dustry was the outsourcing of manufacturing to China including to Hong Kong and mainland China in search of lower wear upon termss and economies of scale. at that place was very little manufacturing footprint in high cost countries such as Switzerland, Denmark and the United States in which the LEGO Group maintained presence.

Furthermore, the 200Os saw a rise the consolidation of the retail industry particularly in the United States and the ontogenesis of big boxwood retailers such as Wal-Mart and Tar start up. This meant that traditional distribution channels that had been employ by companies like LEGO in the one-time(prenominal) were no chronic viable. The consolidation in the retail field also meant that retailers ! were amassing precedent in the toy industry which has an fix of putting hale on the in operation(p) margins of the manufacturers. The intensity in the retail empyrean saw companies such as Toys R Us be taken over by head-to-head equity firms which further intensified the dominance of companies like Wal-Mart. In terms of doormans Five Forces, toy manufacturers were operating against strong emptor group (in terms of...If you want to get a replete essay, order it on our website: OrderEssay.net

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