After careful analysis of the alternatives and an in-depth look at the company in general we recommend that the LEGO Company should deviate from the construction toy market and begin producing fashion toys.
The children's toy market has changed and as a result the marketing strategies previously employed by LEGO have led to a decrease in market share and consumer sales.
First, we analyzed the threat of substitutes in the industry. A substitute is classified as any product that grabs and holds the child's attention. The overall threat of substitutes in the industry is considered to be high, as a result of the many varying products that children have to choose from in today's growing toy market.
The threat of initial entry into the toy industry is high, because any entrepreneur can produce a trendy product classified in the toy market. These entrants rarely sustain product sales and, over time, lose out to the larger companies who have customer loyalty, brand equity, and financial resources. This idea is further explained in the analysis of rivalry in the industry.
Rivalry is classified as the ability of a company to p