2. Was it a good idea to launch LEGO Friends? Why/why not? LEGO (www.lego.com) is now the second largest toymaker globally after Mattel, with total revenues in 2017 of DKK 35.0 billion (€4.7 billion) and DKK 7.8 billion

(€1.1 Billion) in net profit. Its main category presence is in construction toys, where LEGO holds the leading company share in the vast majority of countries.

While the majority of LEGO products fall within the construction toy category, the company maintains a diverse product portfolio, with a mix of licensed and non-licensed properties, and different toys. LEGO continues to experiment with the brick toys concept, The product range is designed to appeal to all age groups. LEGO maintains a strong relationship with licence owners such as Disney and LucasArts, and uses many licences on its products.

In general the majority of toy production is outsourced to China. However, LEGO has retained a large part of production capabilities in-house rather than outsourcing to the Far East, focusing on product quality and innovation rather than price. This strategy has paid off, with customers proving that they are willing to pay a price premium as long as the product quality is perceived as high.

Many traditional toy makers are having a tough time as competition intensifies from digital games. Aging populations in Europe present another big challenge, shrinking the market for toys. But Lego, owned by Denmark’s richest family, is expected continued sales growth in the coming years.

Demand for its Lego City and Lego Star Wars product lines continues.