We took a big step in our journey to use sustainable materials by. Once you finished the case analysis, time line of the events and other critical details. An outsourcing journey prepare a case study analysis of case 12. Its motto, only the best is good enough, had stuck with company since 1932 when ole kirk christiansen, a danish carpenter, established the company in the small town of billund in jutland, denmark, to manufacture his wooden toy designs. The most drastic change made by lego group to turn around the business was outsourcing to flextronics, a leading multinational electronics manufacturing services provider. Jan 17, 2016 use pdf download to do whatever you like with pdf files on the web and regain control. The last years rather adventurous journey from 2004 to 2009 had taught the fifthlargest toymaker in the world the lego group the importance of managing the global supply chain effectively. Multinational corporation founded in 1932 in jutland, denmark 7000 employees worldwide by 2009, 5th largest manufacturer of toys by sales volume products sold in more than countries products.
Web to pdf convert any web pages to highquality pdf files while retaining page layout, images, text and. Since 1958, lego s core and original product, composed of bricks with interlocking tubes. Achintya arun avishek manish pankaj prashant slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Lego outsourcing journey free download as powerpoint presentation. Please utilize this template format for this assignment.
An outsourcing journey 4 selected solution to the problem i think the best solution for lego would be to continue with what they have and not expand anymore. In order to survive the largest internal financial crisis in its roughly 70 years of existence, the management had, among many initiatives, decided to offshore and outsource a major chunk of its production to flextronics. An outsourcing journey harvard case study solution and hbr and hbs case analysis. The lego groups top management consists of an executive leadership team made up of 10 members and a board of directors.
The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The last years rather adventurous journey from 2004 to 2009 had taught the fifth largest toymaker in the world the lego group the importance of managing. This sudden change in its sourcing strategy posed lego management with a number of caveats. Apr 10, 2012 the lego group turned its 50 year old strategy of high. The instruction from the professor was to scan the recent press, to select a news message and prepare a written analysis and interpretation of what had happened. Legos outsourcing journey strategic decision making. The company became aware of the inflexibility in the supply chain of the.
An outsourcing journey phd fellow marcus moller larsen, professor torben pedersen and assistant professor dmitrij slepniov wrote this case solely to provide material for class discussion. Besides the direct quality and production costs, imagine the number of meetings, the hours of engineering and executive time, and the loss of employee morale that was sunk into this fiasco. Ole kirk christiansen, danish carpenter manufacture his wooden toy designs good play enriches a childs life. An outsourcing journey case solution, the lego group the importance of managing the global supply chain effectively the last few years rather adventurous journey from 2004 to 2009 had taught. Nov 12, 2010 outsourcing strategy supply chain management. Awarded toy of the century by forbes magazine as well as british association of toy retailers. Explain how the development of strategy at the lego group reflect the key characteristics of strategic management outlined in section 1. Outsourcing vs insourcing for this post, i am sharing with you the individual paper that i wrote for my global operations and supply chain management class in ie business school. Nov 09, 2016 in 1999, lego decided to cut 1,000 jobs and by 2003, net sales fell by 26 percent, play material sales slipped 29 percent and as a result, pretax loss on earnings came in at 1. Download file to see previous pages the paper tells that unlike in the past century when the competitiveness of business environment was defined on the basis of the assets that firms owned, competitiveness in the present century is defined by intangible capabilities. How the lego group built itself back together again. In 1999, lego decided to cut 1,000 jobs and by 2003, net sales fell by 26 percent, play material sales slipped 29 percent and as a result, pretax loss on earnings came in at 1. Shift to offshore outsourcing problem of bottle necks large stocks of many different components need for an urgent transformation in all major. An outsourcing journey case study solution, in recent years, and an adventurous journey from 2004 to 2009 he taught the fifthlargest toy maker in the world the company lego group the importance.
This is when the lego group and ferrari launched an agreement to make lego sets based on the iconic race cars. Founded in 1932 by ole kirk kristiansen, and based on the iconic lego brick, it is one of the. The crisis prior to finalizing a strategic recommendation for knudstorp and the lego group, i needed to gain perspective on the industry and internal factors that have historically interfered with legos business model, and thus lead them to the point of bankruptcy. Global brand, local knowledge, schneider electric global account management semiconductor manufacturing international company in 2011 walmart china. An outsourcing journey find, read and cite all the research you need on researchgate. Building strategy excel file, subjects covered business growth competitive strategy licensing productivity recognition by darren meister, paul bigus source. Discover the management team the lego group is owned by kirkbi as 75% and the lego foundation 25%. Outsourcing has been receiving increasing attention both from academic and practitioner communities in the last couple of years. Clearly, lego lost a lot of money on the allegedly failed outsourcing journey and would presumably have been much better off on their own.
Despite the bright forecasts, the collaboration did not fulfill the. Nov 19, 2008 the parties jointly decided that the lego group will take over lego production from juarez, mexico and nyiregyhaza, hungary. Lego group case lego group an outsourcing journey 1 lego. The vision of lego group is to inspire children to explore and challenge their own creative potential lego now ranks 4th in the world as a toy manufacturer. A supply chain transformalon helped put the beloved toymaker back together again.
The lego group is a privately held company marketing essay. In exhibit a, i used the porters five forces model. The outsourcing process can be defined as the process of establishing and managing a contractual relationship with an external supplier for the provision of capacity that has previously been provided inhouse. Lego group an outsourcing journey case analysis free essays. Therefore, over the next lectures, we will investigate the process of strategic decision making, and explore how this matter formed for performance. Lego group s outsourcing contract with flextronics was a leap of faith that perhaps a highly organized contract manufacturer could help sort. Lego group leg godt play well lego is a line of construclon toys manufactured by the lego group, a privately held company based in billund, denmark. An outsourcing journey found in the cases section of your digital book. The lego group, is a toy manufacturer based in denmark and is perhaps best know for the lego brick, which has been voted the toy of the century on several occasions. Reflecting on the crisis, lego ceo jorgen vig kudstorp notably, a family outsider, the second one in the history of the company suggested that lego had been too sacred with our own virtues. Lego bricks are core products preschool creative building play themes licensed products. Legos outsourcing journey strategic decision making coursera. Lego outsourcing journey enterprise resource planning. An outsourcing journey jorgen vig knudstorp was appointed as the companies ceo.
Founded in 1932, the lego group is a privately held company headquartered in billund, denmark. Lego group an outsourcing journey 4 selected solution to. The lego group is engaged in the development of childrens crealvity through playing and learning. The environment is highly competitive and recently was largely affected by the financial crises. By 2003, sales had dropped by 26 per cent and in 2004 by a further 20 per cent. Lego group s outsourcing contract with flextronics was a leap of faith that perhaps a highly organized contract manufacturer could help sort out the supply chain issues that plagued the company. An outsourcing journey the end cdt malcom brown cdt xander bo kim cdt paul song lego group.
An interesting textbook case relating to the vertical exibility story of toy giant lego is narrated in larsen et al. Focus on the following zero down on the central problem and two to five related problems in the case study. Business process outsourcing to india coloplast as organizational. Over the last couple of years the company has reported record revenue and profit number. Closely adhere to the case study analysis template by clicking on the hyperlink.
Summary of the case the lego groups vision was to inspire children to explore and challenge their own creative potential. An outsourcing journey case study solution, lego group. An outsourcing journey case solution, the latest travel adventures years 20042009 had taught the fifth largest toy manufacturer in the world lego group the importance of effective manageme. May 01, 2019 lego groups outsourcing contract with flextronics was a leap of faith that perhaps a highly organized contract manufacturer could help sort out the supply chain issues that plagued the company. Mar 01, 2014 lego group an outsourcing journey presented by. Lego is one of the major players in its industry as it is the worlds largest manufacturer of toys in terms of sales. Olga grishko, willie macatee, fallon murphy lego company overview. Closely adhere to the attached case study analysis template.