LEGO Case Study: Sustainability Challenges
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Questions and Answers

What is a primary internal benefit of having a strong purpose within an organization?

  • It eliminates competition in the market.
  • It attracts only high-profile clients.
  • It enhances customer loyalty and employee motivation. (correct)
  • It guarantees profitability regardless of market conditions.

    • Which component does NOT belong to the PESTEL analysis framework?

  • Political
  • Environmental
  • Operational (correct)
  • Social

    • In Porter’s Five Forces, what does 'Buyer Power' refer to?

  • The potential of suppliers to drive up prices.
  • The level of competition between existing firms.
  • The ability of customers to influence pricing and quality. (correct)
  • The threats posed by new entrants to the industry.

    • Which aspect of the VRIO framework indicates that resources should not be widely available?

    <p>Rare</p> Signup and view all the answers

    What strategic approach to international expansion offers the highest potential for risk and reward?

    <p>Direct Investment</p> Signup and view all the answers

    Which challenge related to international expansion involves adapting to local consumer preferences?

    <p>Cultural Barriers</p> Signup and view all the answers

    How does the concept of Imitable in the VRIO framework strengthen competitive advantage?

    <p>By making it impossible for others to replicate the value provided.</p> Signup and view all the answers

    In the context of competitive differentiation, what role does a defined purpose play?

    <p>It enhances market positioning against competitors.</p> Signup and view all the answers

    What is one of the key challenges LEGO faces in its sustainability initiatives?

    <p>Quantifying and communicating emission reductions</p> Signup and view all the answers

    Which of the following reflects LEGO's commitment to sustainability?

    <p>Investment of DKr3bn annually in sustainable practices</p> Signup and view all the answers

    What potential negative impact may arise from LEGO's focus on sustainability?

    <p>Financial strain due to high initiative costs</p> Signup and view all the answers

    What is a desired outcome of adopting a circular business model for LEGO?

    <p>Enhanced customer loyalty through reused products</p> Signup and view all the answers

    Which market risk must LEGO carefully manage?

    <p>Balancing environmental goals with cost-effectiveness</p> Signup and view all the answers

    What could help LEGO overcome challenges in finding sustainable materials?

    <p>Partnerships and broader industry collaboration</p> Signup and view all the answers

    What role does a motivating purpose play in an organization?

    <p>It fosters consistency in organizational efforts</p> Signup and view all the answers

    Which initiative reflects LEGO's innovative potential?

    <p>Exploration of new recycling programs like Replay</p> Signup and view all the answers

    Study Notes

    LEGO Case Study

    • LEGO faces a conflict between sustainability goals (replacing oil-based plastics) and profitability (manufacturing costs).
    • Transitioning to new materials disrupts existing operations and increases complexity.
    • Quantifying and communicating emission reductions to consumers is challenging.
    • Establishing a sustainable, circular business model for LEGO bricks presents logistical challenges.
    • LEGO remains committed to sustainability, with significant investments (DKr3bn annually).
    • While facing challenges, LEGO maintains market leadership and a strong reputation.
    • High costs of sustainability initiatives may affect profit margins.
    • LEGO demonstrates adaptability by exploring new recycling programs (like Replay).
    • LEGO aims for a 37% emissions reduction by 2032 via R&D.
    • Success in programs like Replay can shift LEGO's business model towards reused products and customer loyalty.
    • Balancing environmental goals with cost-effectiveness is crucial for LEGO.
    • Finding sustainable materials may require partnerships or wider industry collaboration.

    Importance of a Motivating Purpose

    • A clear purpose aligns organizational efforts, leading to consistent decision-making.
    • A strong purpose fosters stakeholder engagement: improving customer loyalty and employee motivation.
    • A defined purpose differentiates an organization from competitors.
    • A purpose provides a framework for long-term strategies.

    Analyzing the External Environment

    • PESTEL Analysis: Considers political, economic, social, technological, environmental, and legal factors.
    • Porter's Five Forces: Analyzes industry rivalry, supplier power, buyer power, threat of new entrants, and threat of substitutes.

    VRIO Framework and Competitive Advantage

    • VRIO assesses the value, rarity, imitability, and organizational aspects of resources and capabilities for sustainable competitive advantage.
    • Apple's brand equity and ecosystem are examples of VRIO elements.

    International Expansion

    • Strategic Approaches: Include exporting, franchising/licensing, joint ventures, and direct investment.
    • Challenges: Include cultural barriers, regulatory compliance, resource allocation, and competition from established local players.

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    Description

    This quiz explores LEGO's conflict between sustainability goals and profitability. It examines the challenges of transitioning to sustainable materials, quantifying emission reductions, and establishing a circular business model. Participants will gain insights into LEGO's commitments and strategies in facing these issues.

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