2) Which Of The Generic Strategies Does Lego Appear To Be Using Based On This Case? Provide Support Of Your Choice

1564 words - 7 pages

1) How did information systems and the organization design changes implemented by Knudstorp align with the changes in business strategy?
When Knudstorp became the CEO, the company was with negative cash flow and the real risk o which would have even led to a breakup of the company.
There was the change in the business strategy in the company that was brought up by the new CEO. The strategy was to survive, cut costs, sell businesses, generate cash and ignore the dash for the growth in the immediate future. Lego was known for the traditional blocks and components that will allow children to build anything with their imagination. The business strategy was to broaden the Lego products for ...view middle of the document...

Information systems are typically utilized by any business organization to streamline and quicken the reaction time to market changes and aid it in achieving the competitive advantage .The IS will help company in building different business strategies like Cost leadership,Growth,Innovation,Operationl effectiveness, customer orientation, time strategies. To achieve its business strategies the LEGO has taken the help of the IT vendors IBM and SAP for the establishment of their IS making it possible to extend more quickly and add capacity and functionality as it was needed. Supporting massive expansion brings its own challenges, one of which is to ensure that the underlying systems can scale reliably and effectively. The main issues with the supply chain management, end customer feedbacks, product profit accountability, spread its market and the various unit functioning etc. had been addressed completely by the advent and the establishment of the efficient IS for the business.
Thus, in the LEGO Case study provided, the new CEO Knudstorp has very efficiently aligned the IS and organization design with respective to the business strategy to bring success for the company.

2) Which of the generic strategies does Lego appear to be using based on this case? Provide support of your choice.
The strategies that Lego had used based on this case study are
Cost leadership:
The costs of the company has to be minimized so as to minimize the cost for the customer without deceasing the profits. The company has applied this strategy by relocating the functional units to the less expensive places like Asia. The firm not only obtains a greater labour and operating effectiveness, but also it chooses strategic alliances and new sources of supply. Designers were also encouraged to use the same components for the new sets so as to reduce the designing costs of the new product and customer can mostly use the same components for the new set, reducing the costs at both the ends. The assessment of the product profitability was taken into account so as to cop up with unnecessary investment costs to the company. This will also help in organizing efficient supply chain management incurring less transport charges.
Differentiation:
This strategy calls for a company to provide a product or service with the distinctive qualities valued by the customer. Lego sticks to the traditional blocks and components and children can build anything from their imagination. They have introduced many new products with the popular movie themes so as to compete with their competitors in the toy market. They designed line of Legos aimed at girls since majority of their products primarily the boys. Lego has developed the video games featuring their popular characters adding digital revolution. Lego has developed and used leading-edge technologies in ways that support LEGO brand values – such as extending the “intelligent brick” concept of LEGO MINDSTORMS to open up whole new ways of...

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