Abstract
Since 1949, the LEGO Group has manufactured over 400 billion plastic bricks, tiny tires, mini-figures, and other inter-compatible play pieces, making it the world's fifth-largest toy manufacturer, and the largest in Europe. From 1932 to 2001, LEGO group achieved remarkable successes, capturing 80% of the US toy market in 1992. From 2001 to 2004 though, LEGO group experienced significant financial difficulties due to adverse industry changes and internal problems. More recently, LEGO has launched a three-phase turn-around strategy with the aim of establishing a profitable core platform, and preparing for growth. In this study, we will walk through the important phases in LEGO´s history, focusing on the changes within the company and the industry at-large, and conclude with a critical analysis of LEGO's turn-around strategy. How attractive has the traditional toys and games industry been over the 20th century? Porter´s Five Forces model provides a framework to evaluate the power of suppliers, threats of new entrants and substitutes, buyer power and the degree of rivalry.
