LEGO: ahead of its customers since 1932
LEGO is an outstanding - one of a kind - example of a 85-years old company showing continuous growth since its establishment. No other family-owned company can boast of being future-oriented and predicting customer needs as this Dutch toy producer. What is more, besides setting trends, LEGO is also educating the future generation. One might rightly say, the company does a lot more than simply keeping children busy.
The story of LEGO is fascinating. It is one about 85 years of continuous product development and quick response to demand. Established in a small village in Denmark in 1932 by a local carpenter, Ole Kirk Kristiansen, LEGO was nothing like the play system we know it as today. The first LEGO construction toy was a wooden duck. “Only the best is good enough” - the motto of the company sat at the workshop's front door, greeting every customer who came in. Within next seven years, the small workshop grew up to ten employees. The momentum was temporarily broken due to a fire. However, production was resumed quickly and the company expanded to 40 employees by 1946. That is when Ole decided to bring a new life to his workshop.
investing 10% of the profit
With the 1946 revenue of DKK 450,000, Ole spent almost 10% of it purchasing a plastic injection-moulding machine for toy production. He knew that he had to keep up with the demand and increase production speed. Such a bold move gave birth to the LEGO Automatic Binding Brick as we know it today. In 1949, the company produced more than 200 different wooden and plastic toys. It took two years for plastic toys to account for half of the LEGO's output. That is why, after the second fire in the factory in 1960, Ole's son, Godtfred Kirk Christiansen, ended the wooden toy story of LEGO focusing only on plastic toys.
It was 1954 when the revolution in the industry took place. By that time, all toys were ready-to-use products for kids and demanded no creativity. While on a business trip, Godtfred Kirk met a trader who complained that the toys lacked idea and structure. This inspired Godtfred to innovate with new solutions, coming up with the LEGO system of play. The new product was launched to markets in less than a year. It was the first toy consisting of 25 sets and eight vehicles that children could use to build their own mini-towns. The games were sold in northern Europe, Germany, France, UK. To be ahead with design and product development, LEGO established an internal Futura department in 1959.
keeps on going
The second half of the 20th-century was outstanding for several reasons. To begin with, the opening of the airport in Billund triggered an excessive amount of clients to visit the LEGO site. The visitors' flow was so strong that Godtfred had to come up with a new way to display models. Instead of a boring showroom, in 1968, LEGO got a brand-new amusement park - Legoland. At the same time, LEGO widened its product line for pre-schoolers with its DUPLO series. Also, the product got engines working on the batteries that enabled children to build a close-to-real railway.
Godtfred Kirk Christiansen inherited passion and inspiration from his father for LEGO that kept the development going. In 1963, Godtfred outlined key characteristics for the product. LEGO products had to complement each other providing unlimited, healthy and long hours play for children of different age and gender. Also, the product was supposed to develop imagination and creativity while maintaining high-quality standards. Till today, these ten features are the base for the company where children are the primary focus.
Deepening company's influence, LEGO established the Educational Products Department in 1980 that created 22 educational boxes already in 1981. Altogether, 80's were important for international growth and change of the management into hands of Kjeld Kirk Kristiansen, the grandson of the LEGO's founder. In 1988, Kjeld introduced LEGO Group vision. The LEGO Group has been building up during next decades adding new product series and expanding globally. In 90s', the company launched worldwide events to support its products as well as a couple of TV shows. For instance, TV shows in Baltics were aired weekly. LEGO went digital in 1996 with www.lego.com.
In the following years, LEGO opened 700 square meters Imagination Centre in Florida and LEGO Mindstorms Learning Centre in Chicago. Moreover, the company's products started to use heroes from books and movies like Star Wars and Winnie the Pooh. In 2003, characters received racial variety with different skin colors, and hairstyles. Responding to new demand, LEGO offered its fans to create personalized models on their website and to buy elements required to build it. Starting from 2009, the company launched Board Games series and delivered first LEGO movie. Throughout the history, the company has not failed to innovate creating a whole new world for kids. Let's have a look what LEGO, which is always ahead of the customer, prepares for the future generation.
Applications of circular economy do not work ideally for LEGO, as it is one of those rare products that do not have an expiration date. "It is so rare that something you bought in 1958 can still be used with something you buy off the shelf today. Lots of other consumer products aren't compatible in that way," says Lego's senior director of environmental sustainability Tim Brook, "We have looked in detail at the circular economy and will continue to do so, but sometimes it feels like loops for loops' sake and in this instance, there may not be a loop." Therefore, the sustainability efforts are directed to the start-of-life of the product: eco-design.
LEGO's strategy clearly highlights the importance of positive environmental impact in its strategy. As plastic in far from being the most environmentally-friendly materials, management is determined to find more sustainable elements for the system. “This is a major step for the Lego Group on our way towards achieving our 2030 ambition on sustainable materials,” says current CEO Jørgen Vig Knudstorp. “We have already taken important steps to reduce our carbon footprint and leave a positive impact on the planet by reducing the packaging size, by introducing certified packaging and through our investment in an offshore wind farm. Now we are accelerating our focus on materials.” The investment of $1 billion in new LEGO Sustainable Materials Centre in Denmark is expected to deliver results by 2030.
With children's interest as their main focus, LEGO continues to produce innovative, high-tech constructs. LEGO Mindstorm is the series of LEGO robots that can be programmed for performing different tasks. It teaches children to build, program, and find creative ways to use the toy. After 15 years on the market, LEGO enhanced the robots by giving them personality. With such measures, the young generation will be acquainted and close with the potential of artificial intelligence and robots.
The technology becomes more and more accessible to children every day. Similarly, with the change of the lifestyle, young generation needs a new way of communication; online one. However, the Internet is far from being the safest place for children with its unlimited and often easy to access content. Thus LEGO took this challenge by creating the safe social network for kids - LEGO Life. LEGO Life is designed for children under 13 years old. It is Instagram-like LEGO-themed application where users can share their LEGO creations with each other and challenge their creativity.
The safety measures are one of the main concerns for parents. All users identities are created inside the platform, with avatar, nicknames and even comments, being LEGO-specific. This ensures that children are incognito and have the ability to concentrate on the content. All pictures are heavily moderated with a specific filter to guarantee only relevant and safe materials in the LEGO Life. Also, LEGO Boost users are able to share their instructions and codes. Securing the communication ethics, LEGO life has the possibility to communicate only with Emojis. To some extent, this boosts . LEGO team has done extensive research eliminating emojis that could be offensive. LEGO Life is already available in the US, UK, Canada, France, Germany, Denmark, Austria, and Switzerland. The future of communication can be predicted with this app.
The only way to lead the market is to focus on the consumers and to develop together with them. Children development and leisure time have always been a priority for LEGO. The company's management has always been flexible and ready to innovate and execute new products in the short time. Their success is definitely in the passion and determination to deliver the best solutions to the market. Up to now, LEGO focuses on children and provides them with exciting opportunities to prepare them for the future.