An outsourcing journey the end cdt malcom brown cdt xander bo kim cdt paul song lego group. Outsourcing includes both foreign and domestic contracting, and sometimes includes offshoring or relocating a business function to another country. Solution outsourcing in business, outsourcing is the contracting out of a business process to a thirdparty. An outsourcing journey found in the cases section of your digital book. Compared with the highest revenue in 1999, the revenue in 2014 decreased by 35. Multinational corporation founded in 1932 in jutland, denmark 7000 employees worldwide by 2009, 5th largest manufacturer of toys by sales volume products sold in more than countries products. The lego group is engaged in the development of childrens crealvity through playing and learning. This outsourcing relationship between lego and flextronics is of special interest to us because evidently something went wrong so that lego backsourced the. The lego group, is a toy manufacturer based in denmark and is perhaps best know for the lego brick, which has been voted the toy of the century on several occasions. Lego groups outsourcing contract with flextronics was a leap of faith that perhaps a highly organized contract manufacturer could help sort.
The company has passed from father to son and is now owned by kjeld kirk kristiansen, a grandchild of the founder. Assistant professor, strategic management and globalization. The case study will describe legos internal and external challenges through. For almost 70 years, lego experienced steady growth. In recent years, and an adventurous journey from 2004 to 2009 he taught the fifthlargest toy maker in the world the company lego group the importance of managing global supply chain efficiently. In order to survive the largest internal financial crisis in its roughly 70 years of existence, the management had, among many initiatives, decided to. Both the class discussion and article refer to how important it is for the psychologist who leads the group to be adequately trained and to be able to interact well with the group and ensure that everyone feels part of the group and understands how the group came to be. Lego group s outsourcing contract with flextronics was a leap of faith that perhaps a highly organized contract manufacturer could help sort out the supply chain issues that plagued the company. Lego is a danish phrase that means play well lego, n. Lego is one of the major players in its industry as it is the worlds largest manufacturer of toys in terms of sales.
The lego group was founded in 1932 by ole kirk kristiansen. What did the lego group learn about outsourcing from the. An outsourcing journey introduction ole kirk christiansen founded the lego group in 1932. Warehousing strategy at volkswagen group canada inc. The environment is highly competitive and recently was largely affected by the financial crises. Closely adhere to the attached case study analysis template. Lego bricks are core products preschool creative building play themes. Conduct a swot analysis on the case study companys internal and external challenges. In 2005, the lego group began outsourcing the manufacture of its simpler products to a hungarian facility belonging to flextronics, a singaporebased electronics manufacturer. In exhibit a, i used the porters five forces model to help identify and label the threats, demands. The authors do not intend to illustrate either effective or ineffective handling of a managerial. Jointly we have now come to the conclusion that it is more optimal for the lego group to manage the global manufacturing set up ourselves.
The last years rather adventurous journey from 2004 to 2009 had taught the fifthlargest toymaker in the world the lego group the importance of managing the global supply chain effectively. The crisis prior to finalizing a strategic recommendation for knudstorp and the lego group, i needed to gain perspective on the industry and internal factors that have historically interfered with legos business model, and thus lead them to the point of bankruptcy. How the lego group built itself back together again. You must be logged in to view this material casecent. Closely adhere to the case study analysis template by clicking on the hyperlink. The most drastic change made by lego group to turn around the business was outsourcing to flextronics, a leading multinational electronics manufacturing services provider. An outsourcing journey case solution, the latest travel adventures years 20042009 had taught the fifth largest toy manufacturer in the world lego group. The outsourcing process can be defined as the process of establishing and managing a contractual relationship with an external supplier for the provision of capacity that has previously been provided inhouse.
An outsourcing journey case study solution, in recent years, and an adventurous journey from 2004 to 2009 he taught the fifthlargest toy maker in the world the company lego group. Legos outsourcing journey strategic decision making. Over the past few years weve been chronicling a very expensive journey by danish toymaker lego. Since 1958, legos core and original product, composed of bricks with interlocking tubes. In the beginning lego group made wooden toys and later 1946 changed their production to plastic interlinking building bricks after purchasing their first plastic moulding machine. Therefore, over the next lectures, we will investigate the process of strategic decision making, and explore how this matter formed for performance. Environmental education resources to commemorate earth days 50th anniversary. In 1958 the brick in its present form was launched. An outsourcing journey find, read and cite all the research you need on researchgate. The name lego came from the abbreviation of two danish words which are leg godt, which means play well.
Lego outsourcing journey enterprise resource planning. How could the company use this knowledge constructively in the future. The lego group and flextronics have worked together for almost three years, but during the past year it has become increasingly obvious to the two parties that it would be. An outsourcing journey phd fellow marcus moller larsen, professor torben pedersen and assistant professor dmitrij slepniov wrote this case solely to provide material for class discussion. An outsourcing journey case study analysis, subjects covered global business management controls outsourcing strategy supply chain management by marcus moller larsen, torben pedersen, dmitrij slepnio. The company was established in the year 1932 at billund, denmark by ole kirk christiansen lego, n. Sorry, we are unable to provide the full text but you may find it at the following locations. In 2004 the lego group would have to take radical new steps to tackle its most serious. The lego group, famously ran into financial difficulties at the beginning of this century and much of this could be attributed to organisational inefficiencies larsen et al.
Building the first family business constitution in china. An outsourcing journey case solution, the company, after facing crisis, changed the ceo of the company in the year 2004. Outsourcing to external producers can and did increase production process complexity with no prior largescale outsourcing experience, decision to embark on such an extensive project wasnt practical more research needed to ensure both firms operation models could properly align to accomplish goals lego should have expected large. Lego group leg godt play well lego is a line of construclon toys manufactured by the lego group, a privately held company based in billund, denmark. Achintya arun avishek manish pankaj prashant slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Lego group an outsourcing journey case analysis free essays. In order to survive the largest internal financial crisis in its roughly 70 years of existence, the management had, among many initiatives, decided to offshore and outsource a major chunk of its. Please utilize this template format for this assignment. What were legos main expectations and learning from the relationship with flextronics. Link to article what did the lego group learn about outsourcing from the flextronics collaboration. In this assignment the lego group are examined by using a pestel analysis turner, s. Clearly, lego lost a lot of money on the allegedly failed outsourcing journey and would presumably have been much better off on their own. An outsourcing journey prepare a case study analysis of case 12.
Management 192 downloads 4 pages 945 words add in library click this icon and make it bookmark in your library to refer it later. An outsourcing journey case study solution, lego group. Lego had several expectations when they contracted with flextronics. Ole kirk kristiansen, master carpenter and joiner, establishes his business in the village of billund, denmark. Page 7 the lego case from john ashcroft and company, experience worth sharing. Lego group was founded in 1932 by ole kirk kritiansen in billund, denmark. N2 the last years rather adventurous journey from 2004 to 2009 had taught the fifthlargest toymaker in the world the lego group the importance of managing the global supply chain effectively. That year the company also expanded its operations in kladno. Olga grishko, willie macatee, fallon murphy lego company overview. From early 1990s to 2004, the lego group, a long successful toymaker with a worldrenowned brand, fell into the edge of bankruptcy. According to the lego groups chief marketing officer, returning back to the core and back to. An outsourcing journey excel file, subjects covered global business management controls outsourcing strategy supply chain management by marcus moller larsen, torben pedersen, dmitrij slepnio. An outsourcing journey case solution, the lego group the importance of managing the global supply chain effectively the last few years rather adventurous journey from 2004 to. Arriving at this point, however, was difficult in two ways.
Decision tree lego group outsourcing not outsourcing main parts not the main parts flextronics other company considering the sudden change of its sourcing strategy that posed legos management with more problems than solulons, the queslon of legos main expectalons and learnings from the relalonship with flextronics arises. An outsourcing journey case study solution, analysis the company, in the year 2004, faced financial crises and decided to outsource most of its products manufacturing to the company flextronics. Shift to offshore outsourcing problem of bottle necks large stocks of many different components need for an urgent transformation in all major. Remote work advice from the largest allremote company.
The one with flextronics an american company providing electronic manufacturing services. Building a global marketing and communication company in china. The goal of outsourcing was for lego to be able to reduce costs and at the same time learn from flextronics expertise in reducing complexity and improving. The lego groups top management consists of an executive leadership team made up of 10 members and a board of directors. In this project we will analyse one specific outsourcing agreement that lego made.
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