PESTLE Analysis of Lego. The Lego Group is a toy-producing Danish company. Ole Kirk Christiansen established the company on 10 August 1932. The headquarters of the toy company is in Billund, Denmark.
Lego’s main products and services are as follows;
- Basic toy-construction theme
- Developing robotics
- Media products like software, music, videos, books, films
- Educational material for schools and kindergarten
- Lifestyle clothes
- Bed lenin
- Puzzles toy games
- Plastics brick toys
Key statistical facts and figures about Lego are as follows;
- The annual revenue of the toy company in 2022 was 8.7 billion Euros
- Out of which, the net profit of the company was 1.85 billion Euros
- Approximately 25000 employees are working for the company to manage its operations
Some of the top competitors of Lego are as follows;
- Bricklink Limited
- The Brothers Brick
- Bricks Fanatics
- Brick Owl
- Minifigs. me
- Wicked Bricks
- Mattel, Inc
- Bandai Namco
- Brinquedos Estrela
Today, we’ll discuss the PESTLE analysis of Lego. It is going to focus on the macropolitical, economic, social, technological, legal, and environmental factors impacting the toy company. Here’s Lego PESTLE analysis as follows;
Political Factors Impacting Lego
Some of the main political factors in the PESTLE analysis of Lego are as follows;
No Question Policy on Sale
Lego decided not to ask its customers for the large procurement in 2016, as long as they kept the company’s name out of their political campaign. It all started with the Chinese artist Ai WeiWei who has earned the reputation of criticizing the government regimes. However, he was publishing his artwork made out of Lego’s toy bricks in the Melbourne exhibition. The company didn’t allow him to publish his artwork in the exhibition and did not support him at all.
Controversy on IWD
American journalist Maia Weinstock received a lot of appreciation and admiration for successfully publishing his work back in 2015. Her work featured and paid tribute to all the women on the International Women’s Day. On the other hand, Lego didn’t publish her work based on the view that it would make the company take political sides and the company has nothing to do with politics. Many hailed the company’s decisions because admiring women’s accomplishments has nothing to do with politics.
Non-Political Beliefs & Values
Perhaps you must have got an idea about the company’s policy. Lego follows the simple policy of non-political involvement of any government or country, rather it focuses on toy manufacturing. However, the company promotes the artistic work of its customers on its online platform; people send votes for the artistic work. If a receives majority votes, then the company executes the idea into the reality of the toy.
Economical Factors Affecting Lego
Some of the main economic factors in the PESTLE analysis of Lego are as follows;
Lego’s toys have different prices in different countries based on the country’s currency exchange rate. For instance, the price of a Lego toy in Ecuador is 675 US dollars, which makes the company’s toys the world’s most expensive toy product. Besides the expensive products, Lego’s products have always attracted the attention of customers across the world. The total cost comprises of following elements;
- Total number of bricks
- Licensing cost
- Molding in the manufacturing of every piece
- Exchange rate
Growth & Productivity
Lego is one of the world’s largest toy manufacturing companies. The company has established a worldwide reputation for its creative and innovative toy products. That’s why the company’s annual revenue and profitability have been increasing exponentially for the past many years.
Social Factors Impacting Lego
Some of the main social factors in the Lego PESTLE analysis are as follows;
Lego’s brick toys have had a great impact on the creative artists in the entertainment industry. Many box office hit movies and characters were from Lego’s toy characters like Lego Batman. Along with movie characters, the company’s theme music has also earned a lot of views, and it took the company’s growth to the next level.
As a global toy manufacturing brand, Lego has had a great obligation to produce toys that are non-discriminatory to all races, genders, sexualities, and cultures worldwide. In order to deal with this issue, Lego’s creative team comprises all types of people from different backgrounds, ethnicities, and races. Well-diversified creative team of people helps the company to contribute significantly to its innovation.
In order to protect and safeguard the interests and rights of children, Lego has established a partnership with UNICEF. The objective of the company is to discourage children’s exploitation of cheap labor. Most importantly, the company is supporting the interests and rights of children by becoming a children-centered brand.
Technological Factors Affecting Lego
Some of the main technological factors in the Lego PESTLE analysis are as follows;
Creativity & Innovation
Many research studies have shown that the building blocks and bricks of Lego play a significant role in promoting innovation and creativity among young and growing kids. Along with the brick building, the company also offers other toys like coding options for robots and race engineering cars and vehicles. The toy brand is promoting a tech mindset among children.
Lego has established a digital media platform to connect with online users across the world. It has allowed the company to develop a strong community of Lego lovers. According to an estimate, the Lego Life application has got roundabout 10 million users and the company is operating its network in more than 80 countries across the world.
Lego is investing a significant amount of resources in the research and development of children’s toys and playing activities that impact their learning capabilities. R&D allows the company to gain a competitive edge by developing smart toys. For instance, the robotic kit of Lego for young kids aged up to 7 promotes engineering skills among children and makes them write codes.
Legal Factors Impacting Lego
Some of the main legal factors in the Lego PESTLE analysis are as follows;
The growth and popularity of Lego’s toys attract the attention of counterfeits and imitating companies. For example, the Zuru toy company introduced a toy action figure that is very similar to the character of Lego, and the brand filed a copyright infringement lawsuit against Zuro. However, Zuru’s lawyer said that their expressions are completely different, and Zuru’s action figure is not competitive with Lego’s. After months of legal battle, the judge ruled in favor of Zuru.
Environmental Factors Affecting Lego
Some of the main environmental factors in the Lego PESTLE analysis are as follows;
Partnership with WWF
Lego has recently partnered up with the worldwide fund (WWF) for Nature with the objective of the safety and protection of Mother Nature and the environment. The company has decreased waste and carbon emission rates by 10%, the company plans to achieve 100% sustainability by 2030.
Conclusion: Lego PESTLE Analysis
After an in-depth study of the PESTLE analysis of Lego; we have realized that Lego is the world’s leading toy manufacturing brand. If you are learning about the business of toy brand Lego, then you should keep in mind the abovementioned macro-environmental factors.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.