One brick at a time, the Lego story

My six-year-old son, Ollie, and I have just returned home from Sydney’s Lego Brick Show this afternoon. This is our third year in a row, and every show gets bigger and better. Everything, indeed, is awesome.

iPads and iPhones and all their games certainly do command a lot attention from my son (and daughter). Ollie could watch Minecraft tutorial videos all day if we allowed him to on the YouTube channel on AppleTV. “Dad! I need inspiration for what to build on Minecraft and how (when you eventually buy me an Xbox) to use the ‘mods’”. You what son? Kick a football!

However, the one saving grace has been our introduction of Lego to Ollie. We started a little young perhaps, nearly three, but his love for the plastic has brought out his love for symmetry, building and creation and in particular his interest in, you guessed it, Star Wars.

The history of Lego is a great story to tell, in particular, the last decade of the company. The word ‘Lego’ stems from the Danish phrase ‘leg godt’, which means ‘play well’, and play well do millions and millions of kids (and adults). In 2004, Lego posted a loss of US$260m, the company was described as being almost bankrupt. Soon afterwards the founder’s grandson Kjeld Kirk Kristiansen resigned as CEO and appointed ex-McKinsey & Co. Jørgen Vig Knudstorp as the first non-family CEO. This is a famous and noted turning point.

Knudstorp set off on a plan to stabilise, restructure and grow the iconic business once more. He sold off the majority share of Legoland to a seasoned theme-park operator, took back the control of Lego factories that had been outsourced and, most importantly, sorted out the product lines. Ill-advised products and sub-brands were discontinued and the focus shifted to Lego’s key brands, such as City, Technic, Creator and the more basic sets (like Duplo).

Another crucial, and eventual long term success story, was the introduction Lego products featuring licensed characters, such as Star Wars, Harry Potter, Lord of Rings, Marvel etc. See below graphic, the numbers do the talking.

This all has worked well, very well, and Lego has again become a multibillion-dollar business, and now the biggest toy company in the world. It is no surprise that this year Lego has overtaken Ferrari to become the world’s most powerful brand. Without doubt, it has a universal appeal that few brands have managed to capture.

Lego’s mission is to “Inspire and Develop the Builders of Tomorrow”. I think this will continue to sustain Lego’s popularity in the face of new generations, like my kids, who have been brought up on iPads and the internet.

Thanks for reading

Kai

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