Lego And Its Unique History And Brand Concept - 5206 Words

â€Å"set amount of a good or service can be produced on a larger scale yet having less input costs† . This can be the case for Lego due to to its long term factory moulds, its specialisation in producing building brick and its unique history and brand concept. For a competitor to enter the market it would have a high Economies of Scale. To exemplify this if Lego wanted to produce x units it would cost $y. If a competitor wanted to produce the same amount of units (x) its cost would be $Ky with K being the constant. It would prove to be more costly for the competitor. Fig 1.5 In the diagram above (Fig1.5) it shows the average costs to the output of Lego and a new competitor. As have discussed above, for Lego to produce quantity x its costs will be Costs-Lego. However, for the incoming competitor to produce quantity x its cost will be significantly higher than Lego. Thus in the context of microeconomics, firms may not decided to compete with the current monopoly powerhouse due to the negativity in the cost benefit analysis of the higher starting costs. For a competitor to reach the current level of output of Lego: it would prove to be unbeneficial due to the long time it will take to reach Lego’s position, thus increasing costs whilst decreasing revenue. This is effective as there is little to no room for profit. Lego can subsequently price anywhere due to its flexibility in obtaining profit, moreover it can and does price above the cost of Lego bricks but below the price aShow MoreRelatedThe Lego Group : A Company1535 Words   |  7 PagesThe Leg o Group is a privately family-owned company based in Billund Denmark and was founded in 1932 by Ole Kirk Christiansen. Legos are plastic construction toys; the history spans nearly 100 years; manufacturing of these interlocking toy bricks began in 1949 with the creation of small wooden Lego bricks (developed into six pieces of 2 by 4 bricks that can be combined in 915,103,765 ways, creating systematic creativity) but has since then grown into an iconic brand with factories around the worldRead MoreDigital Technology : An Effective Platform For Creativity And Innovation1552 Words   |  7 Pagesfor corporations to embrace new engagement strategies in order to sell their product. A prime example of this is from The LEGO Group, who has strategically used digital technology to their advantage in order to boost their profitability. However, LEGO has expanded far beyond the urgency to sustain a business, and is now capitalising on the success of transmedia branding. LEGO shows that a com pany can be both creative and profitable. 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As discussed during our meeting, I have also made recommendations tailored specially to your business’s need. The report provides background to the company and industry as well. Benefit and features of the product lines are also briefly explained. TheRead MoreEssay on LOGO case study2462 Words   |  10 Pagesï » ¿Mgmt3347 individual case study TABLE OF CONTENTS Introduction The essay is a strategic analysis for LEGO Group. LEGO Group is a famous toy company in the world, which established in Denmark. LEGO Brand is not only the familiar logo, but also the expectation. LEGO acts as a guarantee of quality and originality. LEGO’s core values are imagination, creativity, fun, learning, caring and quality. The essay will show strategic analysis by identifying the industry, analyzing general