One of the biggest challenges large companies face is reinventing themselves and remaining successfull. Sometimes they fail to do so and their business model expires like a yogurt in the fridge. Learn how LEGO escaped near-death with their amazing business model turnaround story.
In 1949 LEGO began manufacturing interlocking toy bricks in Billund, Denmark. This created infinite possibilities of imaginary worlds for generations of kids and LEGO grew over decades. Yet, LEGO almost faced bankruptcy ten years ago. Watch the video below to learn how LEGO pulled off a spectacular business turnaround, quadrupled its revenues in less than a decade and brought LEGO bricks back to households around the world. Today, they occupy the top spot in the toy manufacturing business (take that Barbie! ;-).
One could argue that LEGO turned its business model around by creating more value for customers while using less resources. They first reengineered their operations improving the backstage of their Business Model (Canvas). Then, they turned to customers and boosted value creation.
Operations focus: Streamlining activities and using the resources in the backstage of the Business Model (Canvas):
LEGO expanded its business model only after establishing a robust operational base, ensuring a profit on the sets they were selling. Then they turned to customers and designed new and improved value propositions that would create more value for their customers.
Customer focus: Creating more value with new value propositions in the frontstage of the Business Model (Canvas):
Tools & Techniques
Also, LEGOs are so cool that even Scotland’s police use them.