кейси для індивідуальної роботи 2014 н.р. / LEGO GROUP IN TOYS AND GAMES

SCOPE OF THE REPORT

Scope

Toys and Games

US$153,792 million

Construction Toys

US$6,750 million

Disclaimer

Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors.

Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies‟ opinions, reader discretion is advised.

LEGO is the third largest toymaker in the world, behind Mattel and Hasbro. Building on innovation and old traditions in brick toys, LEGO was one of the most successful toy companies during 2010 and 2011, outperforming the sluggish toy market. The majority of company products remain in the construction toys category where its position is unmatched by any other toy company. However, LEGO has diversified its business model, launching LEGO Games, as well as releasing a number of video games.

LEGO is the third largest toymaker globally, with retail value sales of traditional toys valued at US$4.5 billion in 2011. Its main category presence is in construction toys, where LEGO holds the leading company share in the vast majority of countries.

Over 2008-2011, LEGO was one the most dynamic toy companies globally, increasing its global market share in each year. Its strong performance also meant that the construction category did very well over the same time period.

While the majority of LEGO products fall within construction toys, the company maintains a diverse product portfolio, with a mix of licensed and non-licensed properties, and different toys. LEGO continues to experiment with the brick toys concept, and launched Minifigures in 2010, positioned as impulse collectible toys, as well as Lego Games in 2009.

The product range is designed to appeal to all age groups. In the pre-school age range, LEGO is strong with LEGO Duplo, while the majority of its properties, including LEGO City and LEGO licensed products are aimed at 5-15 year-olds. LEGO Mindstorms, meanwhile is aimed at more mature demographic.

LEGO maintains a strong relationship with licence owners such as Disney and LucasArts, and uses many licences on its products.

STRATEGIC EVALUATION

Revenues double since 2007

LEGO registered record company revenues and profits in 2011, having outperformed the overall traditional toys and games market. Its revenues more than doubled between 2007 and 2011, and LEGO can arguably be viewed as the most successful toy company over the review period.

Its strong performance in the challenging economic environment since 2008 is particularly noteworthy, given the higher than average price tag of most LEGO toys. It suggests consumers value the play and educational value of toys, and have been ready to pay a premium for toys with perceived high play value, despite cutting other expenditures.

In 2011, growth in LEGO sales was driven by the launch of the new Ninjago line of construction toys, which was one of the most successful LEGO product launches.

While growth in Western Europe slowed in 2011, LEGO had a very strong year in North America, which was a major contributor to growth in 2011.

LEGO Net Sales vs Net Income 2007-2011

Note: Company total, msp prices

STRATEGIC EVALUATION

Developed markets register strong growth

As a company, LEGO remains firmly focused on the developed markets, in particular North American and Western Europe. Combined, the two regions accounted for 72% of LEGO sales in 2011. Western Europe was the largest market for LEGO, and the company had especially strong position in Germany, Scandinavia and the UK.

North America is LEGO‟s second largest regional market, and growth is North America was the major contributor to growth 2008-2011. LEGO sales have doubled in the US since 2008, as a result of opening more single branded stores and working closely with retailers and licensors in the region. If the trend continues, LEGO‟s North America sales are likely to catch up with Western Europe soon.

In the emerging markets, LEGO is particularly strong in Eastern Europe, where it was the leading toymaker in 2011, ahead of both Mattel and Hasbro. Asia Pacific is an opportunity area, since LEGO sales are still rather small in countries like China and India.

In 2011, LEGO was awarded the Guinness World Record for

“the world‟s largest tyre manufacturer per annum”, highlighting the size of LEGO‟s business. LEGO produces

318 million toy tyres a year, since nearly half of its toys include wheels.

LEGO % Value Sales by Geographic Region 2011

WEAKNESSES

High price tag

 The majority of LEGO products are priced in the mid-to-high range, making them less affordable in emerging economies. This has limited LEGO‟s growth prospects in countries such as India.

THREATS

Competition

 LEGO has managed to maintain dominance in construction category in most markets, but new entrants, such as

Hasbro‟s KRE-O range, and local companies may create price pressure in the future.

Single category focus

 While LEGO has successfully married its brick toys concept with other categories, such as games and puzzles or even video games, its main business remains deeply rooted in construction toys.

Age compression

 LEGO‟s main product range is in the age bracket most susceptible to age compression, in particular children playing more video games, which poses a long-term risk.

Strong brand image

 A study by Reputation Institute in 2011 revealed a positive consumer association with LEGO, by ranking the toymaker as the fifth most reputable company globally, next to the likes of Apple and Google. Consumers tend to associate LEGO with creativity and educational values, which helps to sustain an interest in the brand among parents, who play a large role in toy purchasing decisions. It also makes LEGO a valuable property from the licensing perspective.

Need to tap emerging markets

 LEGO has relied on the developed markets for toy spending in in the past, with strong results. The strategy has helped to maintain high profit margins even during an economic slowdown. However, the company could soon reach saturation point in these markets, and emerging markets like Brazil, and China could well become key for maintaining high growth in the long run. LEGO is already showing a good performance in Russia, but has a rather lower profile in Asia Pacific.

Licensed properties

 LEGO spends more on licence acquisition than Hasbro, its chief competitor, despite having considerably lower sales. The investment in new licences has reaped rewards in sustaining interest in the brick toys concept over time, even though it was originally invented decades ago. LEGO maintains close relationships with the main licensors, including Disney and LucasFilm, which gives it a competitive advantage over rivals such as Mega Brands.

Seeking new growth opportunities in toys

 In some ways, LEGO‟s iconic status as the building bricks company would make expansion into new categories an unnatural path. However, LEGO has been successful venturing into new categories while keeping the core toy concept the same. The success of LEGO Games indicates that building blocks type games can work. In 2012, LEGO announced its Friends range, primarily targeting girls.

2007

 A: LEGO registers 22% growth globally, defying the economic gravity and declining consumer sentiment. Thanks to LEGO, construction toys was one of the few growing categories in the year in the US and the UK, as well as a number of other developed economies.