LEGO - The Rise and Fall...And Rise Again

Summary

This video discusses the rise, fall, and resurgence of LEGO, one of the largest toy companies in the world. It highlights LEGO's early beginnings in Denmark, the development of their iconic brick system, and their global expansion. The video covers their financial struggles in the early 2000s, the steps they took to recover, and their renewed success, thanks in part to simplification of products and sales of Legoland. It also touches on recent challenges, including declining sales in 2017. The video concludes with a sponsored message about Empower, an app that helps users manage their finances.

Takeaways

• 🌐 Lego is one of the largest toy companies globally, ranked 91st on Forbes' list of the world's most valuable brands.
• 💰 Lego's sales reached 5.1 billion dollars, with a brand value of 7.8 billion dollars.
• 👶 The Lego brand is highly recognizable and appeals to a wide demographic, including children and adults.
• 🏭 Lego originated from a carpenter in Denmark making wooden toys, evolving into the plastic interlocking bricks we know today.
• 🔄 Lego's success is largely attributed to the quality and creativity of their product, which has remained their core focus.
• 📉 Around 15 years ago, Lego faced a significant downturn with severe debt and potential bankruptcy.
• 🚀 Lego's revival was sparked by simplifying their product line and refocusing on their core business of interlocking bricks.
• 🎢 The company's expansion into theme parks and other ventures initially contributed to their financial struggles.
• 📈 Post-restructuring, Lego's sales increased dramatically, making them a dominant force in the toy industry.
• 📊 A dip in sales and profits in 2017 was attributed to overexpansion and challenges in maintaining the momentum from successful movie tie-ins.
• 💡 Empower, the app featured in the video, offers financial tools to help users save, budget, and monitor their expenses.

Q & A

What is the significance of the name 'Lego'?

The name 'Lego' is derived from the Danish words 'leg' and 'godt', which mean 'play well'. Interestingly, 'Lego' coincidentally also means 'I assemble' in Latin, although this was not the initial inspiration for the name.

How does Lego rank among the world's most valuable brands?

According to Forbes, Lego is ranked as the 91st most valuable brand in the world, valued at 7.8 billion dollars.

What was Lego's annual sales figure in the provided script?

Lego's annual sales figure was mentioned as 5.1 billion dollars.

What was the main reason for Lego's near bankruptcy around 15 years ago?

Lego nearly went bankrupt due to terrible debt, an unsuccessful growth strategy, and a loss of market shares, which led to financial difficulties.

What was the original product that Lego's founder, Ole Kirk Christiansen, made?

Lego's founder initially made wooden toys, including a simple wooden duck, before the creation of the plastic interlocking bricks that define Lego today.

What significant change did Lego make to their product six years after the creation of their first plastic toy?

Six years after creating their first plastic toy, Lego introduced the 'Lego System in Play', which included street signs, cars, and other elements to create entire cities, significantly boosting sales.

How did Lego's strategy contribute to their financial decline?

Lego's financial decline was due to an unsuccessful growth strategy that involved producing a larger variety of Lego pieces, opening multiple Legoland theme parks, and diversifying into other businesses like computer games, which led to increased costs and lower profits.

What steps did Lego take to recover from their financial crisis?

To recover, Lego reduced the number of unique pieces they produced, simplified their sets, sold all four Legoland locations, and shut down their computer game business to refocus on their core product.

Why did Lego's sales drop in 2017?

Lego's sales dropped in 2017 due to a challenging year, which included excess inventory that needed to be sold at lower prices, and possibly due to a slowdown in sales after the high demand driven by the success of 'The Lego Movie' and 'Star Wars: The Force Awakens'.

What is the 'Empower' app mentioned in the script and how does it help users?

The 'Empower' app is a financial tool that helps users save and budget their money. It offers features like monthly spending reports, financial coaching, savings opportunities, and helps users improve credit scores by monitoring credit utilization and ensuring timely payments.

What was the impact of the Lego Movie and Star Wars: The Force Awakens on Lego's sales?

The release of 'The Lego Movie' and 'Star Wars: The Force Awakens' had a tremendous effect on Lego's sales, with a significant increase in 2015 compared to 2014, likely due to the popularity of the movies and Lego's involvement with the Star Wars franchise.