Question 2: Please read the following case study about LEGO, a top global toy company, and answer ALL of the questions that come after (20 marks). LEGO LEGO was founded in 1932 carpenter's small workshop in Denmark. In the course of the next 85 years, LEGO became a multi-billion-dollar company. Voted by the International Toy Council as the Toy of the Century" twice, Lego is a giant in the toy sector, currently selling its creative and inventive products in 130+ countries. The company has 570 branded stores worldwide, which they own and control completely. Still, opening additional stores in new countries is expected to help LEGO reach new customers, both children and adults. LEGO sells a high percentage of their toys online via their e-commerce Website and is also considering investing in futuristic virtual reality online games that are expected to offer customers high interaction and immersion. One of the criticisms that LEGO has faced is the high price of their toys, which means they are not affordable to all families. This could result on customers choosing cheaper alternatives and other substitutes such as Kre-O and Sluban toys. Indeed, LEGO has many competitors that sell much cheaper toys that those sold by LEGO. Another possible reason for customers leaving the company is that LEGO's toys are mostly targeted toward little boys and don't widely address the interests of little girls when designing their block kits. 1. Based on information highlighted in this case, (a) conduct a SWOT analysis of the LEGO company, (b) finding at least 2 points for each of the SWOT categories (4 marks). S w T 2. The case discusses several external environmental factors related to LEGO. (a) List 4 of them, (b) giving examples from the case for each and (c) highlighting if they are specific or general environmental factors (8 marks) (b) Example (c) General or Specific (a) Environnemental Factor 3. (a) Which way of going global (pictured) applies to LEGO? (b) Define it and (c) discuss one advantage and one disadvantage of it (4 marks) Minimal Global Investment Significant Global Investment Global Sourcing Exporting and Importing Licensing Franchising Strategic Alliance Joint Venture Foreign Subsidiary Definition Way of going global Advantage Disadvantage (a) From your understanding of the 5 forces of competition, (a) do you think the threat of substitute products is high or low? (b) Explain your answer, and (c) do you think bargaining power of LEGO buyers is high or low? (d) Explain your answer (4 marks). Competition Forces High or low? Justification Threat of substitutes Power of buyer