{"id":14884,"date":"2016-11-16T13:15:54","date_gmt":"2016-11-16T18:15:54","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/"},"modified":"2016-11-16T13:15:54","modified_gmt":"2016-11-16T18:15:54","slug":"lego-in-a-digital-world","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/","title":{"rendered":"LEGO in a Digital World"},"content":{"rendered":"

Shifts in digital technology are causing widespread disruptions across many industries, and the toy industry is in no way immune. \u00a0LEGO\u00a0Group, a Danish toy manufacturer, offers an example of both the challenges presented by digital technology in the world of physical products as well as the opportunities if digital trends are harnessed and effectively applied across a company\u2019s business and operating models.<\/p>\n

In in the late 1990s and early 2000s, LEGO\u00a0had taken massive strides into the digital space, producing several generations of interactive websites, console games, and computer media.\u00a0 Yet by 2004 the company was in trouble, posting a $140M loss in March of the year and announcing that it would be cutting 500 Jobs.[1]\u00a0 In addition to production inefficiencies and supply chain problems, a significant contributor to this loss was the challenge posed by digital transformation, which had begun to take its toll on the company\u2019s bottom line.<\/p>\n

At the core of the problem was LEGO’s\u00a0misapplication of digital transformation to both its business model and its operational model.\u00a0 \u00a0In terms of the former, LEGO\u00a0had diversified itself into digital mediums which distracted from its core product offering\u2014the LEGO\u00a0brick. \u00a0\u00a0Digital media and video games showed promise, but LEGO\u00a0was simply not adept at developing them and saw a series of media flops with corresponding losses.[2] As for its operational model, LEGO’s\u00a0Press Officer in 2004 described a general lack of information flow in the company: \u201cWe had a lot of knowledge silos within the organization. One hand was doing something that the other didn\u2019t know.\u201d[3]<\/p>\n

Under a new CEO, Jorgen Vig Knudstorp, the company\u00a0began to leverage digital technology to repair its past mis\"dimmensions\"<\/a>takes and return to its core value proposition.\u00a0 It did so by focusing on simultaneous improvements to its business and operational models.<\/p>\n

 <\/p>\n

New Product Offerings:<\/strong>\u00a0LEGO’s digital improvements to its business model refocused the company on its core physical product while allowing the company to still make inroads into other forms of entertainment. It made efforts to bridge the gap between digital media and physical LEGO bricks\u00a0through more advanced software and hardware design. \u00a0Its first game in this space, \u201cLife of George,\u201d was launched in 2011, and it allowed users to construct physical LEGO\u00a0designs which then were scanned into the game.[4] \u201cLEGO Dimensions,\u201d launched in 2015, further developed this concept.\u00a0 The game employed about 300 physical LEGO\u00a0pieces which were used to actually build the controller. \u00a0The controller could then scan physical LEGO constructions\u00a0and render them on the screen.[5]<\/p>\n

Product Design:<\/strong>\u00a0 LEGO\u00a0also leveraged digital technology to \u201ccrowdsource\u201d its product design through communities of fans and designers on the internet.\u00a0 In 2008 it launched \u201cLEGO Ideas,\u201d a website in which users could create and submit product designs which were subsequently voted on by their peers.\u00a0 If the design received 10,000 or more votes, it would proceed to an official LEGO\u00a0review board.\u00a0 Crowdsourced designs performed relatively well in the market, and the site also allowed the company to keep a thumb on current consumer trends and interests.[6]<\/p>\n

\"screen-shot-2016-11-16-at-12-50-09-pm\"<\/a><\/strong><\/p>\n

New Enterprise System.<\/strong>\u00a0 Beginning in 2004 LEGO\u00a0restructured its Enterprise IT system in order to improve data-sharing across the company.\u00a0 The complicated user interface was replaced with a simple, app-styled model which ensured each employee only operated apps applicable to his\/her specific job.\u00a0 This decluttered the internal company site and allowed employees to quickly access required information. \u00a0LEGO also adjusted its IT hiring policies and implemented a system of rotating its employees throughout the organization in order to build wider industry exposure.\u00a0 Furthermore, it instituted IT internship programs within its enterprise system and increased its hiring rate from Silicon Valley.[7]<\/p>\n

LEGO’s\u00a0use of digital technology since 2004 has been largely successful in improving its operating and business models, but there are additional areas of improvement that are worth considering as the company moves forward.[8]<\/p>\n

Leverage Virtual Reality:<\/strong>\u00a0 Virtual Reality is becoming an increasingly important playing in the video game industry, and offers an opportunity for LEGO\u00a0to continue to bridge its physical and digital worlds.[9]<\/p>\n

Continue Licensing Model in Digital Media:<\/strong>\u00a0 This is an area in which LEGO\u00a0has been incredibly successful, and the 2014 collected over $460 million at the box office.\u00a0\u00a0 This model allows the company\u00a0to continue its focus on its physical product while diversifying into alternative revenue sources.<\/p>\n

Expand Design Crowdsourcing: <\/strong>LEGO\u00a0should consider expanding the \u201cLEGO Ideas\u201d model to be more accessible to a broader array of designers.\u00a0 The current platform is quite stale and relatively difficult to use for a novice designer, which imposes a limit on the breadth of design ideas LEGO\u00a0can access.[10]\u00a0 In addition, the company should consider national or global-level design competitions as part of a broader digital media strategy. (788 Words)<\/p>\n

 <\/p>\n

 <\/p>\n

References:<\/u><\/p>\n

    \n
  1. \u201cStrategic Play \u2013 LEGO: Building up an empire.\u201d New Media Age. 29 April, 2004.\u00a0 Accessed via ProQuest at http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/abicomplete\/docview\/225140680\/abstract\/204948B098764946PQ\/9?accountid=11311<\/a>, 13 November 2016.<\/li>\n
  2. Davis, Scott. \u201cHow LEGO\u00a0Built up from Innovation Rubble.\u201d 24 September, 2013. http:\/\/www.forbes.com\/sites\/scottdavis\/2013\/09\/24\/how-lego-built-up-from-innovation-rubble\/#19a8602c9dcc<\/a>, Accessed 13 November, 2016.<\/li>\n
  3. Trangbaek, Roar Rude. \u201cWe Lost the Focus on the Bricks.\u201d http:\/\/www.internationaltradenews.com\/interviews\/we_lost_the_focus_on_the_bricks\/<\/a>. Accessed 13 November, 2016.<\/li>\n
  4. \u201cLEGO Group Unveils First Fully Integrated Digital-to-Physical Gaming Experience.\u201d PR Newswire. 29 September, 2011. Accessed via ProQuest at http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/abicomplete\/docview\/896569043\/9AD53CF2F066470EPQ\/28?accountid=11311<\/a>.<\/li>\n
  5. Milne, Richard. \u201cLEGO Builds New Dimension with Digital Vision.\u201d Financial Times. 28 September 2015.\u00a0 Accessed via ProQuest at http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/abicomplete\/docview\/1727763678\/204948B098764946PQ\/12?accountid=11311<\/a>.<\/li>\n
  6. Amsinck, Herrik et al. \u201cBuilding the Foundations and Enterprise Capabilities for Digital Leadership: The LEGO\u00a0Experience.\u201d 21 August, 2015. http:\/\/dinst.dk\/UserFiles\/Artikler\/LEGO_SIM_Digital_Leadership_Paper_-_SIM_WIN.pdf<\/a>, Accessed 13 November 2016.<\/li>\n
  7. Ibid.<\/li>\n
  8. For an overview of the company\u2019s growth over the past 12 years, see: Ringen, Jonathan. \u201cHow LEGO\u00a0Became the Apple of Toys.\u201d 1 August, 2015. https:\/\/www.fastcompany.com\/3040223\/when-it-clicks-it-clicks<\/a>, Accessed 13 November 2015.<\/li>\n
  9. LEGO\u00a0has made some progress in this area with \u201cLego Fusion.\u201d See also: http:\/\/www.theverge.com\/2014\/6\/19\/5821476\/augmented-reality-lego-fusion-hands-on<\/a><\/li>\n
  10. See: https:\/\/ideas.lego.com\/<\/a><\/li>\n<\/ol>\n

    Image References:<\/p>\n

      \n
    1. https:\/\/www.lego.com\/en-us\/aboutus\/news-room\/2015\/february\/lego-group-2014-annual-results, Accessed 16 November, 2016.<\/li>\n
    2. https:\/\/www.lego.com\/en-us\/dimensions\/how-to-play, Accessed 16 November, 2016.<\/li>\n
    3. https:\/\/ideas.lego.com\/, Accessed 16 November, 2016.<\/li>\n<\/ol>\n

      Additional Sources Consulted:<\/p>\n

        \n
      1. \u201cThe LEGO Group History.\u201d https:\/\/www.lego.com\/en-us\/aboutus\/lego-group\/the_lego_history\/2000<\/a>, Accessed 13 November 2016.<\/li>\n
      2. \u201cWorld Economic Forum White Paper, Digital Transformation of Industries.\u201d Digital Enterprise<\/em>. January 2016. http:\/\/reports.weforum.org\/digital-transformation-of-industries\/wp-content\/blogs.dir\/94\/mp\/files\/pages\/files\/digital-enterprise-narrative-final-january-2016.pdf<\/a>, Accessed 13 November 2016.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

        How the Danish toymaker is keeping pace in an era of digital transformation.<\/p>\n","protected":false},"author":2275,"featured_media":14885,"comment_status":"open","ping_status":"closed","template":"","categories":[1636,690,38],"class_list":["post-14884","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-construction-materials","category-consumer-products","category-toys"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nLEGO in a Digital World - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"LEGO in a Digital World - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"How the Danish toymaker is keeping pace in an era of digital transformation.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"545\" \/>\n\t<meta property=\"og:image:height\" content=\"333\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/\",\"name\":\"LEGO in a Digital World - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png\",\"datePublished\":\"2016-11-16T18:15:54+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2016\\\/11\\\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png\",\"width\":545,\"height\":333},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/lego-in-a-digital-world\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"LEGO in a Digital World\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\",\"name\":\"Technology and Operations Management\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"LEGO in a Digital World - Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/","og_locale":"en_US","og_type":"article","og_title":"LEGO in a Digital World - Technology and Operations Management","og_description":"How the Danish toymaker is keeping pace in an era of digital transformation.","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/","og_site_name":"Technology and Operations Management","og_image":[{"width":545,"height":333,"url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png","type":"image\/png"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/","name":"LEGO in a Digital World - Technology and Operations Management","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/#primaryimage"},"thumbnailUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png","datePublished":"2016-11-16T18:15:54+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/#primaryimage","url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png","contentUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Screen-Shot-2016-11-16-at-12.51.55-PM-1.png","width":545,"height":333},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-in-a-digital-world\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-rctom\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/"},{"@type":"ListItem","position":3,"name":"LEGO in a Digital World"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website","url":"https:\/\/d3.harvard.edu\/platform-rctom\/","name":"Technology and Operations Management","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/14884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/users\/2275"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/comments?post=14884"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/14884\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media\/14885"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media?parent=14884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/categories?post=14884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}