A digital strategy to save the company

LEGO is a range of construction toys made by the Danish group, THE LEGO GROUP. It consists of interlocking bricks, figurines, and various other pieces. The LEGO bricks can be assembled and connected to build objects such as vehicles, buildings, robots… The structures can be dismantled to create new structures. The LEGO Group has begun to make latching game in 1932.

Lego bricks: before the digital strategy
Lego bricks: before the digital strategy

After a period of rapid expansion from 1970 to 1991, LEGO saw a decline in revenue, and by 2004, the company was on the brink of bankruptcy.

 

A new strategy: digital transformation management

At that tipping point, LEGO began to restructure the company to pivot towards having a digital strategy. That’s why they embarked on a digital transformation program. This digital transformation management was aimed at diversifying sources of revenue from mobile and film applications, among many others. LEGO managed to successfully implement digital transformation management and thrive. Through movies, mobile games, and mobile applications, the company made choices that blended the physical and digital worlds.

Nowadays, children spend more time interacting with tablets, smartphones, and video game consoles, than playing with traditional toys such as Barbie dolls or LEGO. That being said, traditional toy manufacturers must figure out a way to modernize their toys for a digital era in order to stay relevant in the minds of consumers.

Since then, LEGO has made many changes by launching new digital-based businesses, all connected to their core brick systems. It was the company’s hopes that these movies, mobile games, and mobile applications would be more appealing to today’s digitally savvy consumer groups.

Lego games: after the digital transformation management
Lego games: after the digital transformation management

Some of the components of LEGO’s digital strategy are below:

  • Social network app,
  • Crowdsourcing design,
  • Bridging the gap between the physical and digital worlds,
  • Incorporating coding,
  • Entering the video game industry.

 

The digital transformation management’s results

After implementing the digital transformation management, the following results were observed:  LEGO obtained 15% margin since 2007, they began to thrive and since 2005, the results have only improved, earning the nickname “The Apple of Toys” (clearly a winner in the toy market).

And finally, on February 17, 2015, LEGO was ranked “Most Powerful Company in the World” by Brand Finance whereas LEGO has decided to transform its strategy into digital. Lego has embarked on co-creation by letting its customers take care of some of their designs, particularly through the Digital Designer platform.

 

If you liked this article, consider checking out Digital Detox Day.

Olivia Plisson

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