* s 81%) Mon 22 Apr 5.41 PM ), Layout References Mailings Review View I u .abe X2 X2 | A' 'A. ]::="; s.-- . Spacing Heading 1 Heading Te Style 1. Lego Since 1932 the Christiansen family has owned and managed Lego, the toy brick maker from Denmark. The toy brick was twice voted "Toy of the 20th Century". Lego's success has been based on providing a quality product and a strong recognizable global brand. Consistent company objectives have not included maximizing profit. Due to these factors, Lego has built up considerable goodwill and other intangible assets such as brand loyalty Lego's financial results from 2004 were a shock to their stakeholders. A move into diversified markets such as clothing, theme parks and watches had resulted in significant losses. A number of rumours began to circulate that Mattel, an American toy manufacturer, would try to take over the struggling European company. However, by 2009, the company had achieved large profits. Financial information for Lego (all figures in USS millions 2009 2004 Net profit/loss before interest and tax 332 380 2010 1513 Sales esperson, Charlotte Simonsen, admitted that the company had made some mistakes by moving into diversified markets. She also highlighted other changes in the external environment suggesting that consumer tastes are moving towards computer games. Using technology, Lego has now created a 3D web site where customers can design their own toys and then order the bricks to build it. A computer-generated Lego film could also be released in 2012 with social trends English (US) Heading 1 Heading 2 Lego spokesperson, Charlotte Simonsen, admitted that the company had made some mistakes by moving into diversified markets. She also highlighted other changes in the external environment with social trends suggesting that consumer tastes are moving towards computer games. Using technology, Lego has now created a 3D web site where customers can design their own toys and then order the bricks to build it. A computer-generated Lego film could also be released in 2012. Charlotte also believes that Lego's successful return to achieving large profits was due to the economic (recession) of 2008-9. She argues that "during diffeult economic times, parents return to economic times, parents return to trusted global brands for durable quality and familiar toys for their children". [Source: adapted from The New Zealand Herald, 9 August 2009] Define the term profit and take over. (a) (i) Briefly explain two benefits of brand loyalty to Lego (i) Calculate the net profit margin for Lego for 2004 and 2009. (b) Analyse two possible reasons why Mattel would have tried to takeover Lego. (c) (d) Given the changes in the external environment, discuss whether Lego has changed its objectives towards achieving larger profits. k English (US)