Case Assignment #6 – LEGO Group
Henry Surya Jaya #57424103
Question 1: How much know-how should LEGO share with its tool suppliers? How practical is it in reality to prevent knowledge spillovers?
From the case, we learned that LEGO place an important value on ensuring the quality of its manufacturing process. Tool suppliers were selected by the LEGO on the basis of their patent position on the methods and reputation, and these suppliers undoubtedly played an important role in helping LEGO achieve better quality assurance. At the end of the day, these suppliers were the ones responsible to make all the tools necessary to build the LEGO products, hence information sharing between LEGO ...view middle of the document...
In other words, it was the only option that would guarantee a peace of mind with regards to protecting their intellectual property. The molding platform was in fact a highly valuable asset to the company as it can speed up production at the same time maintaining the high quality of the products. Obtaining exclusivity with a patent would mean preventing competitors from improving their production process using a similar platform; hence this would further strengthen LEGO’s competitive advantage.
As mentioned in the case, it was very difficult to prevent knowledge spillover. Employees who quit a company carried knowledge in their heads with them, so they posed spillover risks, especially in the current economy where loyalty to a firm was low. So keeping the method as a trade secret was out of the question.
The third possible route mentioned was to publish the invention, which was a cheaper alternative to patenting. Although this would prevent potential competitors from copying, they still need to consider...