Wednesday, April 25, 2007

Back to basics, back to profits

In trying to expand Legos beyond itself, the company allowed their focus on the actual toy to drift. This created problems, as people like Legos for what they are - a toy with which to play and create. In 2005, Lego shifted its focus back to basics, selling the theme parks and lessening expansion efforts in order to focus on creating toys. This apparently proved a great move for Lego, as sales are now soaring. Lego controls 60% of the $600 million U.S. construction toy market, astounding numbers when you note that it was failing less than five years ago. Plus, the iconic toy is better than ever, as the company has been bringing back old favorites and inventing new lines. They have also addressed the challenge of kids growing out of toys at younger ages by adding an interactive feature. For many of the new lines, after the actual product has been constructed, kids can then play with them in other ways, such as with moveable race cars and electric powered rides. While this allows for the video game child to be entertained, it still features Legos in their ultimate form: colorful blocks for building. And those blocks are building Lego right back into the place it wants to be -- profitable.
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