A new book, Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry, has traced how Lego made its recovery from the brink of bankruptcy by returning to its roots. In this book, Wharton professor David Robertson revealed how the Danish toy maker made resurgence from near bankruptcy by returning to its niche.
LEGO was founded in 1932 by carpenter Ole Kirk Christiansen, and from 1978 to 1993 the business expanded at a rapid pace. However, throughout the 1990s and 2000s, LEGO experienced a massive decline. According to Robertson, the company innovated too much and lost control of its efforts at innovation.
LEGO started its turnaround efforts in the late 1990s. While its turnaround took sometime to achieve, the company finally succeeded when it realised that what it did best was to work within its original niche area of supplying traditional toys such as fire trucks, race cars, or police engines.
According to Robertson, the pieces that were used were also uniform pieces that could be mass produced and used for different LEGO sets. In the end, LEGO recovered because it learned to focus on doing what it does best well rather than innovate with new product lines.
Source:http://au.businessinsider.com/lego-maintains-innovation-and-success-2013-7
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