Lord Business

Monday, April 21st, 2014

Lord Business — or his not-so-evil twin, Jørgen Vig Knudstorp — took charge of Lego in 2004 and nearly quadrupled revenue in the last 10 years:

Mr. Knudstorp, a former consultant at McKinsey & Co., turned around the 82-year-old toy manufacturer by focusing on its core business. He sold off the Legoland theme parks and reduced the catalog of Lego bricks available to the company’s designers. Licensing the Lego name—as the company did for Warner Bros., which made “The Lego Movie” — accounts for about 1% of revenue.

The strategy paid off. In 2012, Lego passed Hasbro Inc. to become the world’s second-largest toy maker behind Mattel Inc.

Growth has slowed down though, so Lego is looking to new markets:

There’s almost a perfect relation between disposable income in the household and the household’s consumption of Lego. The more affluent [the parents], the more creativity and play is valued, and the more likely the consumer is to buy Lego. In Beijing [and] Shanghai today, you find consumers who are more adamant Lego consumers than their counterparts in Munich and New York.

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