A review on the lego system/lego city business model

A REVIEW ON THE LEGO SYSTEM/LEGO CITY BUSINESS MODEL

Introduction:

As an interviewee from Bloomberg News, I have tried to share experience of Jorgan Vig Knudstorp, CEO of the Lego Group. Throughout this interview, focus was on the premiere of The Movie. Apart from sharing the experience, information relating to the business performance for the movie is also intrigued.

1. Lego System/Lego City: Business Model

Business model as illustrated in The Lego movie tries to portray scenario of an organisational process for conducting steps of instructions and accordingly achieving pre-designed and planned aims. Farr (2005) mentioned that Emmet, the lead character of the movie tries to focus on team building and group work that ideally highlights the concept of business model as well. As a business model, Lego System highlights the lean process where effort required for successful team is provided. However, Zook and Allen (2012) commented that as reviewed from the Business Model, Lego City is impressive enough in focussing the seriousness and process of carrying out organisational process effectively.

1.1 Business Model Canvas

Business Model Canvas attempts to describe process of an organisation where creation, delivery and value proposition is the central theme. On the contrary, Berman et al. (2009) noted that Business Model Canvas is essentially comprised of 9 building blocks that in synchronised manner provide aid to organisational process.

Figure 1: Business Model Canvas

(Source: invenio - learn.by.doing. 2014)

CEO of ‘The Lego’ movie tried to highlight the theoretical implementation of Business Model Canvas that is rested on the 9 parameters as illustrated in the above diagram.

1.2 Significance of Lego System Business Model:

Application of 9 elements essentially comprises a central theme for achieving team work. As seen in the Lego system CEO commented that construction toys in the movie essentially reflects the 9 basic parameters. Master Builders within the movie are having capability to building anything without set of instructions. However, through Emmet, the central lead, focus on Business Model Canvas is drawn that states the importance of team building, strongly recommended on the 9 building blocks as well (Harvard Business Review, 2014).

Key activities help in listing out the elements with highlighting the areas needing much attention and focus. Value proposition, as stated by Scher (2004), describes the feasibility of organisational process and accordingly future predictions are estimated. Maintaining customer relationships on the other hand provides much focus on the service quality and ideally helps in segregating the customers on various profiles and behaviour. Lin et al. (2009) describes that identification of the revenues is ideal in managing the strategies more successfully and aids in selecting the appropriate channels of media and communication. Lego System however, also focuses on key resources so that maximum allocation of these can support the cost structure of the organisation. Lastly, focus on key partners is ideal in proper business canvas model formation as well.

Lego System as an example of Business Canvas Model focuses on the emphasising on the 9 building blocks so that a successful project or constriction can be taken place. Rueter and Thad (2010) defined that business model under certain assumptions or parameters need strategic planning integrated with the organisation’s current needs. In case of Lego City, construction toys identify needs and accordingly group work and creativity results in amazing outputs. However, premier of the movie essentially shows group work of Batman, Emmet, Wldstyle, Viruvious along with others. The long-term sustainability of The Lego System also identifies innovation as the key theme and accordingly creativity is supported and provided importance.

Viewpoints of Berman and Bell:

As per viewpoint of Berman and Bell, organisations are in need of innovation as it helps in continuous improvement and strategic implementations as and when required. Sigler (2010) pointed out that innovation gives focus to creativity as also seen in the premiere of The Lego; Master Builders of the movie are capable of using their creativity in constructing things as per needs. With the continuous requirement of change, business models gets developed rapidly and increase and need of innovation is rising. The Lego system emphasises as a block building concept where apart from instructions and manuals, theme of innovation and creativity is highlighted.

A business model, as based on Berman and Bell’s viewpoint need to have approach towards innovation from various perspectives. Osterwalder et al. (2010) observed that Lego System as showcased in Bricksburg pins the troubles and challenges faced by the employees and accordingly showcases the role of group work as instructed by Emmet, a skilled construction worker. Innovation models within every organisation builds a satisfaction place within the employees and further motivates them to have much focus and determination towards the work. Innovation in the present times is helpful in bringing sustainability to an organisation and accordingly secures the market position to the firm as it maintains a curiously and interest within the target profile.

1.3 Review of the Lego System/Lego City Business Model:

Lego as a serious play is amicably suitable to comfort people of all ages, apart from children only. Meier (2013) stated that the Lego System tries to explain a business model and under the light comedy influence movie also explains the base storyline evidently. Lego City as described via Business Canvas Model thrives on hitting the required area and premiere showcases impact of great animation on the audience as well. Lego City is based on building blocks as game theme and includes interlocking of the hexahedrons that turns out output of various forms and reforms like car, bed, building, ships and other amateurs. Clark et al. (2012) pointed out that Lego System applies base theme of Business Canvas Model that also built seriousness within an individual while playing this game as it lures for a successful outcome. Lego City Business Model attracts interest of the audience as well as the players by holding on a single interest of making and constructing things as per individual’s interests.

1.4 Manufacturing and Supply Chain: Lego System

The Lego is one of the favourite and mostly chosen products of the consumers. According to Balasubramanian et al. (2010), manufacturing and supply chain system as observed in The Lego System helps in focussing on fulfilling tailoring consumers’ demands and needs. During the pre-release of The Lego Movie, McDonald was involved in promoting the movie and was helpful in increasing the popularity as well (Treffiletti and Cory, 2007). Lego System as a mode of manufacturing and Supply Chain aims to focus on the issues and challenges. Based on the key areas, Rampbell and Catherine (2010) highlighted that strategies if implemented are proven to be much effective and helpful in bringing positive outcomes. CEO stated that Manufacturing and Supply Chain as illustrated via Lego System also fulfils the need, especially during the year 2004 to 2006. Group Supply Chain Management was essentially adopted by the organisation that resulted in uplifting the sales revenue for the product. As per business practise, company got involved into threat of sustainability and made the bold move to bring a change in the operational process to a large extent.

Impact and Effect of Changes in Manufacturing and Supply Chain: Lego System

Application of Group Supply Chain Management helps The Lego System in various ways and accordingly helps in achieving the aims and objectives (Berman et al. 2009). Manufacturing and Supply Chain System within The Lego addresses key issues and with a set of group, proper and most feasible strategies are implemented. CEO of the Group also expressed that effective leadership is one of the proficient calibre required to meet the barriers with effective solutions. Spontaneous reactions to issues is yet another method of limiting the challenge level as it gets addressed in the preliminary stage and as per solutions is avoided or managed. Meier (2013), described that amidst competitors like Megablocks, Minecraft and Lego: Chrome Version, the focussed company was compelled to switch to innovation so that positive review from the market is generated and secured position is attained.

1.5 Digitalisation of Children’s Play: Lego Response

As powered by Lego Digital Designer (LDD), The Lego is aiming to remark its position in the competitive market (invenio - learn.by.doing. 2014). CEO, Mr. Knudstorp strived on concepts like animation and digitisation to have the latest equipments of technology. Social media is greatly applied by the group to get high response from the market. In the opinion of Sigler (2010), upcoming trend of digitisation is hitting the market on a large scale and thus, the children are also a part of the market. However, Rueter and Thad (2010), mentioned that application of innovation via digitalisation was a threat as it involves high budget and huge expenditure as well. Application of rapid change while targeting the construction toys involves huge risk as the primary target comprises children and older kids. However, the storyline as displayed via 3 minute premiere was successful enough in grabbing attention of larger market and was effective enough. Apparently, The Lego Movie is considered as one of the biggest hits of 2014. Impact of applied digitalisation also shows glimpse of the future regarding play toys and interests of the kids which will surely involve more sophisticated play products and high technology.

1.6 Is The Lego a Repeatable Business Model?

Before 2004, The Lego was facing fall in the market share and was declining from the industry. However, between the years 2004 to 2006, the company provided much focus on innovative strategies and was successful in regaining the market’s position. Target markets were offered customised service and a new line of self to-do construction toy kit was introduced for the older kids. Whelan and Meaden (2012), noted that innovative strategies implemented during that phase was an attempt to gain sustainability and market share.

Repeatable business model is applied by an organisation when a number of strategic errors take place and a declining stage is observed. The Lego can be considered an apt example of this model where during 2004, the company was facing crisis situation in presence of strategic errors. However, Clark et al. (2012) mentioned that Repeatable Business Model focuses on the strategic needs of the organisation and along with integrated application of business values and core strategies, appropriate decisions takes place. As per Zook and Allen (2012), Repeatable Business Model ideally suits a changing scenario where new products are introduced. In case of The Lego, new line of products were introduced when market was changing its trend was becoming more sophisticated and synchronised. Thus, differentiation and innovation is the core element of this model that is implemented by The Lego as well.

2. Premiere of the Lego Movie:

The Lego movie efficiently attracts the obsessed fans of this toy and musical presentation is also helpful in grabbing attention and interest at the same time. Phil Lord and Chis Miller, the maker of the movie have tried to highlight the attracting factors by showcasing popular characters like Batman, Superman, Harry Potter including other known ones (like Cleopatra, Abraham Lincoln and others). CEO of the Group also mentioned that their presence in animation form is helpful in adding attractive elements to the movie and creates anxiety among the audience as well (Treffiletti and Cory, 2007).

Chris Pratt, Elizabeth Banks and Morgan Freeman joins the good army for the voiceover while President or Lord Business is having voice of Will Ferrell that outlines story about Lego mini-figure who are employed as construction toys. In addition, Lin et al. (2009) remarked that marketing of the movie was done by both Warner Bros. and The Lego Group which gave much popularity to the movie along with greater and wider audience experience. Mark Mothersbaugh composed soundtrack for the movie and labelled under WaterTower Music (Harvard Business Review. 2014). Throughout the premiere, audience are compelled to be caught by the kinds of interest about various characters as displayed in the movie.

3. Review of The Lego Movie’s Premiere:

In the Wired magazine, The Lego cover story acquired 11 pages that draw attention of the audience largely. However, Osterwalder et al. (2010) mentioned that impact of social media in contemporary scenario is evident as it is one of the fastest, cheapest and effective marketing techniques used by every organisation. Warner Bros. with the help of premiere tries to bring back the love within the aged as well as kids for the constriction toys and animation of high quality helps in adding more quality and interest in the field. Premiere of The Lego is completely devoted to the innovation and creativity that pin holds the interest of the audience and makes a distinction from other premieres. Much promotion of social media like YouTube, Twitter and Facebook results in larger promotion within less time and also proved out to be a cost ineffective method. Millions of dollars is involved in bringing the look of the characters and as per requirements manages to distinguish each Lego figure although so much common in these mini-figures.

4. Business Update on Performance of the Lego Movie:

Although being an animated movie, The Lego was successful in securing the highest and most buzzed movie of 2014 as yet. Rampbell and Catherine (2010) described that The Lego, an American movie within the first 12 hours was able to create 10,000 tweets. Such figures were also spilled over other social media like YouTube, Facebook and others. CEO of the Lego Group shared that popular media platforms like Daily Telegraph and Wired also helped in uplifting the popularity of the movie via topics like ‘felt-tip pen’. On a unanimous basis, the premiere of the movie has already created huge sensation, especially among children and the youngsters. Sigler (2010) described that The Lego Movie articulates sorry of a common Lego minifigure and sets an example of revolt in the Brickburg. Mr. Knudstorp shared that during the promotion of the movie; even The Lego Stores was actively involved in promotion of each of the characters on a weekly basis. Recently, the time of decline for animation was arriving and in the meanwhile, quality of animation as observed in ‘The Lego’ portrayed the right track needed to be adopted for the right kind of animation (Meier, 2013).

Conclusion:

As per interview, the application of Business Model Canvas on The Lego System/City was very evident. CEO of The Lego Group, Jorgan Vig Knudstorp, explains the modern and in-trend concepts like digitisation of toys, use of social media marketing, manufacture of supply chain process, acquisition of obsessive fans and several other factors that led to enormous success for The Lego’s Premiere. Social apps like Facebook, Watsapp and YouTube played an incredible role in leveraging the popularity level of the movie. Released in February, 2014, the movie has achieved huge success based on the tricks and tips of efficient marketing and supply techniques. Business Canvas Modes is another tool leading to success of the Premiere and leaded to creation of buzz within the fans and interested audience. Three minutes trailer of The Lego Movie was sufficiently equipped with necessary tools and medium to strike the audience’s attentions and this one of the popular and very common construction toys was a huge hit as well.

References

Books:

Clark, T., Osterwalder, A., Pigneur, Y., Smith, A., Papadakos, T. and Lacey, M. (2012). Business model you. Hoboken, N.J.: Wiley.

Farr, J. M. (2005). Next-day job interview. Indianapolis, IN: JIST Works.

Meier, H. (2013). Product-service integration for sustainable solutions. Berlin: Springer.

Osterwalder, A., Pigneur, Y. and Clark, T. (2010). Business model generation. Hoboken, NJ: Wiley.

Whelan, J. and Meaden, G. (2012). Business Architecture. Farnham: Ashgate Publishing Ltd.

Zook, C. and Allen, J. (2012). Repeatability. Boston, Mass.: Harvard Business Review Press.

Journals:

Balasubramanian, V., Berglund, P. and Garc\'\Ia-Etxebarria, I. (2010). “Toric Lego: a method for modular model building”. Journal of High Energy Physics, 2010 (1), pp. 1--40

Berman, Saul, Bill Battino and Karen Feldman (2009) “Beyond advertising: Choosing a strategic path to the digital consumer.” IBM Institute for Business Value, 4 (2), pp. no. 7 - 9

Lin, C., Liu, E. Z., Kou, C., Virnes, M., Sutinen, E. and Cheng, S. (2009). “A Case Analysis of Creative Spiral Instruction Model and Students’ Creative Problem Solving Performance in a LEGO\textregistered Robotics Assignment”. Springer, pp. 501--505

Rampbell and Catherine (2010). “Does Michelle Obama’s Wardrobe Move Markets.” The New York Times, 10 (18), pp. 45-59

Rueter and Thad (2010). “Macy’s offers a virtual fitting room in its NYC flagship store.” Internet Retailer 10 (12), pp. 9 - 12

Scher, J. S. (2004). “A lego model of the modularity of the mind”. Journal of Cultural and Evolutionary Psychology, 2 (3), pp. 249--259

Sigler, M.G. (2010) “Eric Schmidt: Every 2 Days We Create As Much Information As We Did Up to 2003.” Tech Crunch, 2 (3), pp. 12 – 21

Websites:

Harvard Business Review. (2014). The Great Repeatable Business Model. Available from: http://hbr.org/2011/11/the-great-repeatable-business-model/ar/1 [Accessed on: 15th Mar 2014].

invenio - learn.by.doing. (2014). LEGO Business Model Canvas. Available from: http://www.learnbydoing.com/portfolio/lego-business-model-canvas/ [Accessed on: 15 Mar 2014]

Treffiletti and Cory (2007). “The Wonderful World of Webkinz.” Media Post. Available from: http://www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=58184 [Accessed on: 15 Mar 2014]