LEGO  is a Danish company that is known for producing, marketing, and distributing toys. Its most popular brand of toys is the Lego brand, which is identified for its wide distribution and revenue success.

1. Why did LEGO face bankruptcy in the early 2000s? In your reasoning, focus on external and internal factors.

2. In terms of revenue growth, LEGO experienced a competitive advantage over Hasbro and Mattel since 2007 because it grew so much faster. What explains LEGO's competitive advantage?

3. What is LEGO's core competency? Explain.

4. Apply the core competency market matrix to show how LEGO leveraged its core competency in new and existing markets under Jorgen Ving Knudstorp, who was appointed CEO in late 2004.

5. What must LEGO do to maintain its competitive advantage in the future? One way to address this question is to think about diversification, both in products and geography. Another avenue is partnerships such as strategic alliances or even acquisitions. What lessons from LEGO's past should guide its future diversification?