Assumptions of
Lego 2001:
Playstation is taking it all
Instant traction, easy fun
Crisp, cool, wow
Boys want Evil
The brick is not the future
The Lego brand can stretch into almost anything
2
1
A €300.000 per day adventure
<economic profit/loss>
The early and happy days
Trouble in paradise
The ten-year desert walk
Running as if there was no
tomorrow
Into the deep – and up
again
Sustainable value creation
the transformation journey
1000
0
-1000
DKK millions
-2000
-3000
For 11 years LEGO
destroyed value for
DKK 2,2 million
every day
on average
-4000
-5000
-6000
Profit
Before Interest, After Tax
-7000
Economic Result
-8000
Cumulated Economic Result
-9000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Sept 7th 2006/ McKinsey Alumni Gathering
Page 3
Wrong path of Galidor from LEGO
New form language
Not recognized as LEGO
Kids had fun building
Link to unsuccessful TV show
Low sales performance
4
2
Music Builder from LEGO
New form language
New paradigm for music
Great consumer response on play value
Low recognition in purchase
Low sales performance
5
Story Builder from LEGO
New form language – not LEGO
New play dimensions
Great fun for children
Not understood in store
Low sales performance
6
3
MyBot from LEGO
New form language
New play patterns
Impossible to explain on box
Great play value in home
Low sales performance
7
The role of play
The setting of play
The content of play
8
4
9
Insights - the role of play
Kids play to:
Find boundaries
Learn hierarchy
Obtain mastery
Learn sociality
Build and show social capital
5
Mastery: Depth - challenge - status
(photo: Pascal, Germany)
Mastery:
Worn
the exact
right
places
Lego Customer
Intimacy/
For Lego
use only
Subtle codes for like-minded
Skills take time to obtain
11
12
6
Insights - the setting of play
The space for playing is small
Designed by mom
The Dad Factor
Loss of privacy
Restricted play
Lego Customer Intimacy/ For Lego use only
14
7
Decorated by mom:
Constant surveillance
Moms spending time at home
Even the kids’ rooms are decorated by mom
15
Privacy
Need for privacy:
George is building a explosive door that
parents can´t enter.
16
8
Restricted play:
Only one hour a day.
Lego Customer Intimacy/ For Lego use only
17
Insights - the content of play
Kids are digitally savvy
Most kids wants bigger challenges
Non-linearity in play
Risk & danger
9
QuickTime™ and a
MPEG-4 Video decompressor
are neede d to see this picture.
19
Impact assessment
Myth busting
Clear idea about play and the role of LEGO
Rightsizing of product portfolio
Change in high level corporate strategy (back to the brick)
Redesign of NPD activities
“The two main reasons for LEGO’s significant financial
recovery are the fact that we now have the right size and that
we now understand children's play and know how to reconnect
with kids”
CEO Jørgen Viig Knutstorp
20
10
Our innovation model
ADJUSTED
RECONFIGURED
REDEFINED
Rarely
the
market
LEGO
LEGO City
Mindstorms
SW has
reconfigured
redefined
beenreaches
continually
what
traditional
LEGO
adjusted
could
Playthemes
be
since
used
product,
early
for. 80’s
Process and business.
1982
2007
90 % of LEGO focus here
Lego Customer Intimacy/ For Lego use only
21
building our logic?
The corporate challenge
– which do we bet on, which will
be a billion?
Dilemma of core
business –
embracing the long
tail of business
opportunities
Lead users drive own
innovative ideas this in many
businesses – also LEGO
Entrepreneurs capture market in
early stage – start small
22
11
User involvement
User enterprise – LEGO supported
User-developed – User published
User-developed – LEGO published
Co-developed – LEGO published
LEGO developed – LEGO published
23
all things start small…
big
Lego Customer Intimacy/ For Lego use only
24
12
Starting point and vision
nbg vision: where we want to go!
We will establish a business infrastructure that will invite entrepreneurs
passionate about LEGO, to grow their business on our platforms
Through this, move LEGO from being a manufacturing only company,
towards a open networked cooperative organization that promotes the
purpose of LEGO throughout the world.
nbg mission: how we will get there!
We will establish a scalable and repeatable platform and methodology for
new business development, which will transform the culture for business
development delivering strong sustainable growth for the LEGO Group
through a broad portfolio of opportunities based on our core systems and
platforms.
25
Defend the core of LEGO
MARKET
User enterprise
26
13
LEGO Education - JV
e
ZOOMinternational
“motivating students around the world”
27
28
14
business model innovation
Zoom business:
•
•
•
•
•
•
•
Turnover in education reaches USD 20 mill. after 4 years.
4-6 times more profitable than traditional business model
City size project, 75.000
Pilot project in Argentina initiated fall 2007
Chile, Mexico and Colombia to follow 2008
Marcos has 4 other LEGO Education businesses developing in Brasil!!!
Brasil could become the educational innovation lab for LEGO
29
LEGO Architecture - partnership
e
“to celebrate the past, present and future of architecture
and
to inspire future architects together with architects from around the world”
30
15
LEGO Architecture - partnership
31
LEGO Architecture - partnership
architecture
collectables
educational
Published by:
professional
Brickstructures:
•
•
•
•
Test launch in Chicago of 1250 sets of Sears Tower and Hancock Centre November 2007
Talks with Frank lloyd Wright Foundation, SOM Chicago, Architect association of Chicago, Trump etc.
Potential very profitable and visible niche business
Test project for new business supply chain and Concept center
• Final branding will be LEGO if test is succesfull
32
16