The success of Lego is more about satisfying customers' own creativity, which includes the whole psychological development process from willingness to contact to self-expression.
The complete route is: fun-effect-stimulation-creation-achievement.
Lego has completed the whole psychological development process of satisfying customers through the following innovations:
1, through the analysis of scientific research personnel, understand the children's gameplay and understand the real preferences of consumers.
2. Do more localized design for customers in different regions.
3. It not only adds "fun" elements to toys, but also increases the difficulty and challenge of games, aiming to make some children stand out in intelligence and practical ability.
4. Change the marketing mode, shape the educational image, and make toys more educational than toys.
5. Pay more attention to the "small data" in the real environment, and make an intuitive observation of small samples through careful observation of "people-oriented", visiting real customers.
6. Design smaller Lego bricks to let children master the power of independent combination.
Lego not only experienced the whole life cycle (investigation period-formation period-maturity period-decline period), but also entered a new customer value life cycle in 2004, thus forming a "value chain".
Inspection period: Lego was born
Since the establishment of 1932, Lego mainly produces wooden toys. By 1947, it became the first toy manufacturer in Denmark with plastic injection molding machine. 1949, the first Lego plastic building block came out, and two years later, the plastic building block with hole-column connection principle was put on the market. After 10 years of repeated research and development and trial and error, Lego bricks with modern embryonic form were patented in Copenhagen on 1958.
The comprehensive experience pleasure brought by Lego plastic building blocks and the splicing stability brought by special materials and structures make Lego different from other toy manufacturers. The breakthrough of technology has given Lego unlimited imagination.
Formation period: create the whole game system.
1958, Ole died and his son gottfried succeeded him. He established six product principles of Lego: 1, which limits size but not imagination; 2. Make it affordable for consumers; 3. Simple and durable, rich in variety; 4, suitable for men, women and children; 5, the classic in toys, no need to update; 6. Smooth distribution channels.
1960, Lego cleaned up most of the wooden building blocks, and new building blocks began to sell well, so Lego began to use plastic building blocks as its core products. This change is very important, and concentration is an important factor in the development of an enterprise. In order to determine the core products, Lego has made innovations in a limited scope and successively launched Lego kits. In addition, in 1978, Lego released a mini doll with movable limbs and hands, which is the company's second important design after building blocks.
Lego's greatest achievement in the later period was the development from producing a single Lego toy to creating a whole set of game systems. They think that an interrelated toy comprehensive system should be developed, so that a system can form repeated sales. With this concept, Lego has made all the building blocks compatible, and all the innovations are based on Lego, which also laid the embryonic form of Lego today.
Maturity: the high-speed development period of Lego
1979, gottfried's son Kyle (KjeldKirk? Kristiansen) was appointed president of Lego at the age of 365,438+0. Young and low-key, Kyle built an effective management system around the Lego game system, which made Lego experience a rapid growth period of 15 years.
During this period, Lego's business ideas mainly focused on product management and channel expansion. Lego divides the product line into three parts: Debao is responsible for producing large building blocks for children; Lego building blocks are responsible for making the basic patchwork set that constitutes the core content of Lego system; The third part is responsible for the production of other Lego assembling materials, such as Scala, a series of assembling jewelry production lines for girls.
During this period, the focus of Lego's product management began to focus on suits, and a series of still influential core suits were constantly updated, including Lego town system, castle series and space system, among which Lego mini-characters also played a very important role, which opened up a world for Lego. Due to the appearance of characters and themes, Lego successfully linked stories with role-playing to create an immersive splicing experience. When Lego sales peaked in the 1990s!
Decline: the decline of the empire of excessive innovation
The rapid globalization of the company has not brought enough innovation. In addition, the development of science and technology began to completely change the nature of games, and video recorders, game consoles, cable TV and computers began to flood into children's lives. Because of the lack of substantive innovation, Lego has become a slow-paced company. Imagine a huge organization that is losing its vitality and competitive environment.
1993, in order to maintain business growth, Lego implemented a radical development strategy. 1994- 1998, the number of new toys produced by Lego tripled, and an average of five new product themes were launched every year. Most fatally, most of the new themes are not well integrated with Lego's existing product line. Innovation is out of control, causing the company to get into trouble.
Rebirth-Since 2004, Lego's nirvana has been reborn!
Lego has entered a new customer life cycle.
So what caused Lego's huge economic losses in 2003, what new strategies did he formulate to reverse its predicament, and what issues should be considered in different stages of innovation?
It took 46 years for Lego to be founded from 1932 to 1978, and its annual sales were very stable, amounting to about1800,000 US dollars. In the next 10 years, the sales of Lego products soared like a rocket. 1988, its sales volume is five times that of 1978. In the 1990s, its sales also reached its peak.
But at the same time, the rapid globalization of the company has not brought enough innovation. In addition, the development of science and technology began to completely change the nature of games, and video recorders, game consoles, cable TV and computers began to flood into children's lives. Because of the lack of substantive innovation, Lego has become a slow-paced company. Imagine a huge organization that is losing its vitality and competitive environment.
1993, in order to maintain business growth, Lego implemented a radical development strategy, so it frantically increased the number of products. From 1994 to 1998, the number of new toys produced by Lego has tripled, with an average of five new product themes launched every year. Including software (computer games and movie studios), daily necessities (Lego children's clothes), media (books, magazines, TV), girls' toys (Lego dolls) and so on. The introduction of the most expensive production line has led to a sharp increase in production costs, but the sales volume has only increased by 4% in four years. Imagine that the output has tripled and the sales volume has increased very little. The increase in costs will inevitably lead to a decline in profits, so Lego has suffered a loss for the first time in history.
The huge economic losses of Lego dating back to 2003 are obviously not the result of one day. The first stage is 1993 ~ 1998 stagnation period. The reason for accelerating the decline of Lego is the "Seven Laws of Innovation" implemented by Chief Operating Officer Bragman. Up to now, there is no doubt that the seven laws of innovation are called the most failed innovation at that time. We will elaborate and analyze them one by one:
1. Absorb innovative talents from different cultural backgrounds.
We recruited top talents from different countries and acquired Zhiwei Entertainment at the same time, but the purpose of attracting talents was to solve problems for enterprises. Lego failed to integrate the value of talents with the needs of enterprises.
2. sail to the blue ocean market.
In the late 1990s, Lego conceived a strategy to change from producing educational products to providing educational services. In three years, Lego has established 65,438+040 education centers in Korea. On the other hand, in terms of products, Lego entered the Hollywood movie market in the United States and made children's imaginary scenes into movies. In the current situation of Lego, there is no doubt that it is a bit eager for quick success and savage expansion.
3. Customer-centric.
In order to open up a bigger market, Lego turned its attention to children who don't like playing with building blocks. The designer launched a new toy series "Le Rubik's Cube", but ignored the basic principles of Lego games in order to cater to the market.
4. Implement destructive innovation.
The rapid development of technology finally set off an industrial revolution, and Lego also believes that it has the ability to subvert the traditional toy market. Subsequently, digital building blocks were developed, and the new products failed to find a suitable feedback mechanism, which laid an unknown hidden danger for the subsequent innovation achievements.
5. Cultivate open innovation.
In the mid-1990s, websites built by fans kept rising. More and more creative works of "building block masters" finally persuaded Lego to try "group wisdom". And let users personalize the design according to their own preferences and create their own suits. Group wisdom is a bit remarkable, but there are also hidden dangers related to intellectual property rights. At the same time, personalized customization is expensive and the conversion rate is extremely low.
6. Explore all-round innovation.
In terms of overall innovation, Lego launched a new product Galidor series, which was also extended to legoland theme parks and Lego brand stores. Heaven also suffered losses.
7. Create an innovative corporate culture.
In just a few years, Bragman and his team put innovation at the top of the management agenda, and established a cultural atmosphere of "innovation transcends everything" within the company. But the problem is the lack of correct direction and focus.
Summary: Although the situation may be optimistic at first, there is still the danger of failure in the long run. Individually, these seven innovation rules are effective for other companies, but together, they almost pushed Lego Group to the brink of bankruptcy. Lego's first attempt to act according to the seven laws of innovation ended in fiasco. Lego must re-examine its own problems and seek a more suitable way to break through.
So how to formulate a new strategy to reverse its predicament?
Enterprises still have to return to the essential needs and solve the core business growth problem. Lego needs to persist in creating a sustainable and extensible toy world. Make effective company strategy according to product sales, company profit and business growth. Experiment and diversification are good things, but behind this, a management system is needed to maintain its integrity.
1. Simplify business, enhance competitiveness and increase cash reserves.
The management team identified a series of "victories" in 2004. It is announced that Lego Group will "focus on retailer customers and reshape product competitiveness". This means that efforts should be made to improve retailers' profits and send enough suitable products to retailers at the right time, so as to increase product sales.
2. Focus on core products and core users.
Understand where Lego makes money, and then promote its most potential products. Abandoning the loss-making business, we began to discover the core products that Lego can really make money, focusing on the innovation that really generates profits.
3. Conceive the innovation matrix and invite fans to participate.
Free innovation is carried out within the framework of FMC. Designers can create more ideas while achieving standardization, thus creating more profitable toys. Hold a "building block feast", establish a "children's circle", communicate face to face with fans and listen to the most authentic voice.
4. Accept the high-risk challenge and renovate the classic series.
On the one hand, Lego is increasingly accepting some high-risk challenges. It refocused the concept lab on creating an unprecedented game experience, thus giving birth to a heavy product-Lego board game. On the other hand, Lego achieved double focus by renovating classic series such as Lego City and Lego Biochemical Warrior, and continued to occupy the top 10 of the company's best-selling suits.
5. Introduce novel concepts and carry out marginal innovation.
Engage in marginal innovation and introduce new concepts quickly, systematically and uniquely. Through innovation with Tucker, Lego continues to expand its architectural series and make simple abstract models of classic buildings.