Essay About Lego Group And External Environment

Lego Group
Q1 Evaluate the external environment in which the LEGO Group operates in.Conducting the external environment analysis will allow us to examine the opportunities and threats that the LEGO Group faced. We will go through the environment level using PESTEL framework followed by industry level using Porter’s Five Forces Framework.PESTEL AnalysisPESTEL AnalysisPositiveNegativePoliticalEconomicHighly seasonal Presents uncertainty over salesGeographical scope and market presenceGoing into new market for higher growthStagnant and mature marketSocialChange in playing habitsStop playing with traditional toysLarge female marketDiversify and take up more market shareTechnologicalGrowth in electronic toysMight impact market shareDigital and new media ageReenter into the digital areaEcologicalNon-poisonous plasticsLeadership in production technologiesLegalExpiration of patentsNew competitor might ariseCompliance with local lawsLimited knowledgePoliticalThere is not much of a political factor surrounding the LEGO group.EconomicThe business cycle of the toy industry is high seasonal that it poses some challenges for the LEGO group. This is illustrated in case whereby the found it to be a challenge with the sales being difficult to predict. The LEGO group is certain mature markets which are stagnant and could venture into high growth markets as mentioned in the case.SocialThe changing demographic such as playing habits could deter children from playing with traditional toys. The female market presents opportunities for the LEGO group as their products usually attracts more boys. TechnologicalThe growth in electronic toys and the emergence of digital and new media age could hinder the market share of the LEGO group. As seen in the case that they have not been successful in these area with the LEGO Universe and companies such as Bandai-Namco and Tomy-Takara raking combined sales of $6.5billion.