Company Analysis.
Through the use of the SWOT analysis we have determined that the following factors directly influence the profitability and stability of LEGO as a company. These factors internal strengths and weaknesses as well as, external opportunities and threats of the company. Strengths of LEGO include: brand equity, a restructured management, the symbiotic relationship of the LEGO products and their extensive research and development process. .
Due to the long-standing history of LEGO in the construction toy industry their brand continues to attract customers and influence purchasing power based on LEGO's dedication to quality. Also in a French opinion poll that focused on assessing major brands of the 20th century, LEGO was awarded "Brand of the Century"" in 1996. The poll requested that French households judge the brands based on reputation, quality, innovation and confidence. .
Another milestone of LEGO was the introduction of Compass Management, which has created a more cohesive environment in that all departments are able to trust in the abilities of their employees to make decisions without having to confer with top management. This system has unified and optimized the efficiency of all departments. Not only is it a goal of LEGO to ensure that all departments connect consistently with each other, but also that products from past, present and future collectively combine to form play sets. This symbiotic relationship of blocks enables children to combine sets and use their imagination freely to create new arrangements. Another strength of LEGO is the extensive research and development process which included spending a considerable amount of time on field study, determining consumer trends, as well as, enforcing a set of ten guidelines by which every product is measured.
Even though LEGO has many strengths, it is not without its faults. Some of LEGO's weaknesses include: the shrinking lifecycle of its products, lack of product differentiation, and the low pay of employees.