LEGO PRODUCTS: BUILDING CUSTOMER

COMMUNITIES THROUGH TECHNOLOGY

MICHIGAN ROSS SCHOOL OF BUSINESS

Rahul Das
MDI gurgaon
REALIZATION

“We had a fundamental lack of self-

understanding. We had to ask
ourselves,Why do we exist?”
- Jorgen Vig Knudstorp, CEO LEGO Group
ORGANIZATIONAL EVOLUTION

Shift in
focus from
core values

Over- Over
“Cool”
diversified
Kids building product
branding the brand line

Complicate
d supply
chain
RE-ALIGNING WITH THE CUSTOMER

Entrepreneurial Consumer Performance

Spirit connect based pay Consumer

“Before leadership was authoritative but leadership today is about authenticity” – Knudstorp, CEO
ORGANIZATIONAL RESTRUCTURING

LEGO Projects
LEGO
LEGO Events
Ambassadors

CED

LEGO Online
LEGO Shops
Communities

Corporate Global supply

Center M&P chain
COMMUNITY EVOLUTION

Creation of
communities like
Engaging platform Star Wars and
for co-creation: Hobby Train
LEGO
Meaningful Luminaries
feedback and
technical
Used AFOL for expertise
component
design and
product
Ignorant development
of value of
fan base
(age >30)
EXAMPLES OF COMMUNITY EVOLUTION
MINDSTORMS NXT
 Invited elite fans to join research and development

Lego Entrepreneurs
team
 Invaluable and unique add-on
 Firmware of MINDSTORMS made open-source;
Brick Journal
robotic fans modified s/w code and shared creations
on forums
LEGO Architecture
The Ambassador Program
 LEGO Ambassador Program – 88 ambassadors from
different user groups
Brazil Education Program
 Nominated and recommended by fans in groups
 Close relation b/w ambassadors and On-staff LEGO
community managers
 Loyalty by ambassadors
 TECHNOLOGICAL EVOLUTION
“TECHNOLOGY IS AN ENABLER FOR SUCCESS, NOT LEGO’S COMPETITIVE ADVANTAGE”

Communities used to communicate, share info. and come • Users could design own LEGO model on easy-to-use
up with innovative ideas interface
• Used to improve quality of products • Comprehensive customer service
• Fans as lead developers to solve tech. design issues Large scale • Create unique and personalized products, share them
presence on online; order bricks etc. for personal product
Social media,
video sharing,
wikis, blogs

Intranet forum – Selected ambassadors to speak

Lego Factory
for LEGO community & Digital • Earlier standalone technology apps tied to different
• Got info. regarding market interests and Designers – LEGO products; minimal integration
concerns play and learn • Integrated platforms: fans involved on basis of passion;
• First fully open forum started in Japan – platform Integrated
technology Company gave challenges to solve
users could post ‘wish’ for new LEGO Lego Group – • Selected fans invited for LEGO building workshop
platforms –
products Semi closed
and fully open
gave valuable • New Electric system: Successfully co-created
• Heightened level of excitement and ideas to
forum with fans
engagement prototype
 Continued Testing with Customer
Manufacturing Improvements engagement Platforms

• Distribution activities outsourced • Theme Parks based on the Lego land

• Decreased labor costs • Entering Video Game industry with Lego Island
• Automated packaging • Online Gaming
• Increased efficiency in brick designs • Opening of Concept stores
• LEGO Movie

Discipline in this function reduced the overall cost of operating the molding machines by 30%.LEGO group found out that by not indulging in excess, it
was able to increase supply chain flexibility through greater control and higher visibility. Also, the company reduced the total number of brick designs
produced from 13,000 to 7,000.
FUTURE: CHALLENGES

1 Balancing new approaches to business development and user integration with traditional business strategy

2 Managing fans expectations

3 To accommodate the openness and its potential impact on the brand

4 Develop revenue model for its incubator businesses

5 Shift towards digital space

Thank you