LEGO® Friends: Leveraging Competitive Advantage

Abstract

In December 2011 the Lego Group (TLG) announced the launch of Lego Friends, the company's sixth attempt to market a product to girls. Lego Friends, which was supported by a $40 million global marketing campaign, was designed to introduce the fun of building with Lego bricks to girls, who represented less than 10 percent of Lego's audience.

The company's poorly executed brand extensions and move from free-form building sets to story-driven kits had nearly cost it its independence in 2004, so the launch of Lego Friends was strategically important. However, within hours of the product's appearance it was heavily criticized for reinforcing gender stereotypes and damaging the valuable Lego brand.

Jørgen Vig Knudstorp, CEO since 2004, had saved TLG and ushered in an era of sales growth with a series of successful strategic initiatives. Would Lego Friends be another addition to TLG's graveyard of failed products for girls, or would it prove popular and finally enable the company to double its sales and profits by reaching this segment?

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Exhibit 1: Free-Form Lego Sets

All images ©2012 The Lego Group, used with permission.

Figure

Exhibit 2: Themed Lego Sets

Figure

All images ©2012 The Lego Group, used with permission.

Exhibit 3: Lego Star Wars Kits Introduced in 1999

Name of Kit

Pieces

Minifigures Included

Suggested Retail Price (USD)

Lightsaber Duel

52

2

6.00

Landspeeder

49

2

6.00

Droid Fighter

62

0

6.00

Naboo Swamp

82

4

10.00

Speeder Bikes

93

3

10.00

Snowspeeder

215

3

20.00

Anakin's Podracer

136

2

15.00

X-Wing Fighter

266

4

30.00

Naboo Fighter

179

4

20.00

TIE Fighter and Y-Wing

409

3

50.00

Sith Infiltrator

244

1

30.00

Gungan Sub

379

3

50.00

Mos Espa Podrace

896

7

90.00

B-Wing at Rebel Control Center

338

3

30.00

SELECTED LEGO STAR WARS KITS FROM 1999

All images ©2012 The Lego Group, used with permission.

Figure

Exhibit 4: Story-Driven Lego Kits

All images ©2012 The Lego Group, used with permission.

Figure

Exhibit 5: TLG Licensing Expense, 2003–2011

Note: Licensing expense includes royalties paid by TLG to the KIRKBI Group, the holding and investment company of the Kristiansen family, for the use of the Lego trademark, in addition to license fees for the use of intellectual rights.

Source: TLG annual reports.

Figure

Exhibit 6: TLG Financial Results, 1995–2011

Source: TLG annual reports.

Figure

Exhibit 7: Exchange Rate, 1991–2011

Source: Oanda.com.

Figure

Exhibit 8: Lego Products for Girls

All images ©2012 The Lego Group, used with permission.

Figure

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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