Being a Product Manager in a pharmaceutical company I realize the significance of a powerful brand. A powerful brand is an image, an idea and a concept that lies in the mind of the consumer. And most importantly it creates a relationship with the consumer. This exactly is what Lego has done with its target market. It has created the perception of being a trustworthy toy brand for the parents who want to give their children safe toys to play with. But like every other brand, Lego has been facing a few ups and downs which can only be understood by an in-depth strategic and situational analysis.
Lego may have established a strong brand image with time due to the quality products it has produced. But I believe that by solely relying on the product itself and not changing the dynamics as per the changing customer needs has led to decreased profitability of Lego. Being a Product Manager I think in order to Lego to regain its momentum its important that Lego repositions itself. In the pharmaceutical industry, innovative medicines come up each day. We as Product Managers have to work hard to maintain the market share of the existing brands and also to give the new brands a substantial market share. The existing brands reach out to customers not only because of the established brand equity but also because we reposition our brand as per the consumer needs making it more adaptable to the consumer.
Lego hence should overcome this weakness. It should reposition itself by realizing that consumer patterns have changed. And Lego has to become more innovative in its product line in order to be sustainable. This innovation will serve the purpose of being an ideal opportunity for Lego. Lego should incorporate new technology and should go ahead with tie-ins with popular children characters. For instance, Lego had tied up with Harry Potter and Star Wars in past. (Doole Lowe, 2008) The product lines then manufactured had increased the sales dramatically. But Lego didnt utilize this opportunity well. Legos weakness lied in the fact that it thought of a short-term success in business. Lego has to bring in some innovation. But it has to do so by developing a vision and a long term strategic plan first. As only long term planning can help Lego rebuild itself. As then it will not fall for any small term success which brings a seasonal boost to its toy business. Lego should become vigilant in scanning the environment and should be more proactive in understanding what children and their parents look for in a toy.
Lego should play with another strength of its as an opportunity. Lego should use its strength of increased operational excellence as the means of giving products of superior quality to the customers. The perception of a better quality at a sustainable price is likely going to help in achieving the trust of the customer. And such trust leads to the development of even stronger brand equity. And this perception should be developed consistently keeping the long term vision in mind. As from my own experience I believe that consistency, single-mindedness and persistence in pursuing a strategy are very important for a brands success.
Besides this a major threat to Legos sustainability is that the competitor brands Coko, Tyco and Megablocks are more focused on developing the products which are likely to thrive in the technical visual environment. They are focusing more on presenting toys that are primarily visual concepts. The competitors are taking away Legos target market of young boys by luring them into computer games and away from the experience of building models with Lego bricks. This lack of innovation by Lego is a weakness for it as well. However, Lego still can use this as an opportunity. It should neutralize this effect by changing the way it currently markets its product line. (Proctor 2000) .It should continue to make bricks and toys of traditional fashion but should sell them in a more innovative fashion against its competitors.
But Lego cannot alone survive with its traditional product line. It has to realize that the threat of innovation has made it necessary that Lego also brings in some element of innovation into its business. Legos target market needs a new and interesting product line which also serves the purpose of learning something new for its consumer. This is something what Lego has tried before in LEGO Digital Designer (LDD). There children were still making models but not with physical bricks instead with virtual bricks. Children could make their own 3-D models in the virtual world on their computers. Now this opportunity if further developed can help Lego regain its lost brand equity. Because here, Lego is not losing its core brand value of building models i.e. learning comes along with playing. However, it gives the consumer a completely new experience about the brand but in a positive manner. (Heding, Knudtzen Bjerre 2009)
And another weakness which is could have been a bigger threat to Lego was shifting away from its core brand essence. Lego had made an attempt by extending its brand into clothing and accessories range for children. This didnt involve any playing and learning experience for the children hence it diluted Legos brand equity. Lego must make it clear in its strategic plan that by diversifying within the same category i.e. launching a virtual building game for children it can succeed. But by diversifying into a new category it is risking its sustainability for the long run.
Thus, its important for one to realize that playing on your strengths is very important. But equally important is to turn any weaknesses into opportunities and not into threats. Lego must pursue innovation but keeping its core essence in mind. Similarly, if I ever face any such challenge in my work then Ill remember that keeping the core brand essence alive is essential. But with changing market dynamics, any threats and opportunities for the business must be spotted and should be turned into a sustainable strength.
Lego may have established a strong brand image with time due to the quality products it has produced. But I believe that by solely relying on the product itself and not changing the dynamics as per the changing customer needs has led to decreased profitability of Lego. Being a Product Manager I think in order to Lego to regain its momentum its important that Lego repositions itself. In the pharmaceutical industry, innovative medicines come up each day. We as Product Managers have to work hard to maintain the market share of the existing brands and also to give the new brands a substantial market share. The existing brands reach out to customers not only because of the established brand equity but also because we reposition our brand as per the consumer needs making it more adaptable to the consumer.
Lego hence should overcome this weakness. It should reposition itself by realizing that consumer patterns have changed. And Lego has to become more innovative in its product line in order to be sustainable. This innovation will serve the purpose of being an ideal opportunity for Lego. Lego should incorporate new technology and should go ahead with tie-ins with popular children characters. For instance, Lego had tied up with Harry Potter and Star Wars in past. (Doole Lowe, 2008) The product lines then manufactured had increased the sales dramatically. But Lego didnt utilize this opportunity well. Legos weakness lied in the fact that it thought of a short-term success in business. Lego has to bring in some innovation. But it has to do so by developing a vision and a long term strategic plan first. As only long term planning can help Lego rebuild itself. As then it will not fall for any small term success which brings a seasonal boost to its toy business. Lego should become vigilant in scanning the environment and should be more proactive in understanding what children and their parents look for in a toy.
Lego should play with another strength of its as an opportunity. Lego should use its strength of increased operational excellence as the means of giving products of superior quality to the customers. The perception of a better quality at a sustainable price is likely going to help in achieving the trust of the customer. And such trust leads to the development of even stronger brand equity. And this perception should be developed consistently keeping the long term vision in mind. As from my own experience I believe that consistency, single-mindedness and persistence in pursuing a strategy are very important for a brands success.
Besides this a major threat to Legos sustainability is that the competitor brands Coko, Tyco and Megablocks are more focused on developing the products which are likely to thrive in the technical visual environment. They are focusing more on presenting toys that are primarily visual concepts. The competitors are taking away Legos target market of young boys by luring them into computer games and away from the experience of building models with Lego bricks. This lack of innovation by Lego is a weakness for it as well. However, Lego still can use this as an opportunity. It should neutralize this effect by changing the way it currently markets its product line. (Proctor 2000) .It should continue to make bricks and toys of traditional fashion but should sell them in a more innovative fashion against its competitors.
But Lego cannot alone survive with its traditional product line. It has to realize that the threat of innovation has made it necessary that Lego also brings in some element of innovation into its business. Legos target market needs a new and interesting product line which also serves the purpose of learning something new for its consumer. This is something what Lego has tried before in LEGO Digital Designer (LDD). There children were still making models but not with physical bricks instead with virtual bricks. Children could make their own 3-D models in the virtual world on their computers. Now this opportunity if further developed can help Lego regain its lost brand equity. Because here, Lego is not losing its core brand value of building models i.e. learning comes along with playing. However, it gives the consumer a completely new experience about the brand but in a positive manner. (Heding, Knudtzen Bjerre 2009)
And another weakness which is could have been a bigger threat to Lego was shifting away from its core brand essence. Lego had made an attempt by extending its brand into clothing and accessories range for children. This didnt involve any playing and learning experience for the children hence it diluted Legos brand equity. Lego must make it clear in its strategic plan that by diversifying within the same category i.e. launching a virtual building game for children it can succeed. But by diversifying into a new category it is risking its sustainability for the long run.
Thus, its important for one to realize that playing on your strengths is very important. But equally important is to turn any weaknesses into opportunities and not into threats. Lego must pursue innovation but keeping its core essence in mind. Similarly, if I ever face any such challenge in my work then Ill remember that keeping the core brand essence alive is essential. But with changing market dynamics, any threats and opportunities for the business must be spotted and should be turned into a sustainable strength.
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