Unit 6 LEGO Group: An Outsourcing Journey Case Study Analysis Kaplan University



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Unit 6 LEGO Group: An Outsourcing Journey Case Study Analysis

Kaplan University

School of Business

MT460 Management Policy and Strategy

Author: <insert your name>

Professor: Dr. <professor’s name>

Date: <month> <date>, <year>

 

 

LEGO Group: An Outsourcing Journey Case Study Analysis

Company Name: LEGO Group.

Topic of the Week: Management policy and strategy.

Synopsis of the Situation

LEGO Group is a multinational toy manufacturer headquartered in Billund, Denmark. The company has established operations in other countries such as the United States, London, Shanghai, China, Singapore, and the United Kingdom. In 2004, LEGO Group experienced the worst financial crisis in its entire operational period. The crisis was largely due to reducing demand for its traditional LEGO Brick line of toys, which were its main products. Other factors contributing to the crisis include complexities in the company’s production process, inefficient supply chain, and the decision by the company to outsource a large part of its production to an outside company, known as Flextronics.

With the new outsourcing strategy, LEGO Group was unable to keep track of the new expanded production network. This created inefficiencies in the production network. The transfer of production knowledge between LEGO Group and Flextronics did not occur as scheduled, which resulted to production inefficiencies. For example, Flextronics employed a rigid production model in contrast to LEGO Group model that was flexible and hedged on the global demand and supply. The outsourcing strategy that LEGO opted for therefore proved ineffective in taking LEGO Group back to profitability……………………Buy whole paper here



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