3D printing as a disruptive technology for LEGO, team 3
As recent examples have proven, success for companies is only temporary, thus, pro actively detecting the signs of the times and reacting accordingly is of utmost importance for a company survival. In light of increased IT pervasiveness, our paper analysed current business model and supporting IS strategy, recognized potentially emerging 3D technology, evaluated its impact and developed an action plan and a set of recommendations for the LEGO Group.
The analysis of LEGO’s current strategy revealed several things: 1) Market competition in LEGO’s prime market is fierce, due to its maturity stage. 2) Within LEGO’s prime market, LEGO’s core customer segments are shrinking 3) LEGO’s value proposition is under attack from competitors, as the interlocking brick patent, which is the essence of LEGO’s value proposition, has expired. 4) LEGO’s current strategy is still betting on offline retail channels, despite the growth in e-commerce. 5) LEGO has already invested heavily into their back end software to support their business processes and hence only small efficiency gains are expected through additional IT investments in this area. 6) LEGO has already experience with customer co-creation through its LEGO Idea platform. 7) Emerging trends such as hyper differentiation, resonance marketing as well as making use of the long tail have only been rudimentary tested by LEGO through their LEGO Idea platform. 8) Toy industry is a newly vulnerable market, and that new entrants, which have been enabled through 3D printing will potentially become the biggest threat for LEGO. Despite changes in the market, LEGO still has enough time to pro-actively react, especially since mainstream 3D printing is still 5 to 10 years away from now. Our recommendations were as follows:
LEGO should approach key companies in the domain of consumer-oriented 3D printers to evaluate their offerings. As the quality of individual printers cannot be verified, quality can be ensured by standardizing the plastic-based input. Licensing of one model in the initial stages will decrease the risks associated with implementation and allow LEGO to evaluate the economic feasibility of the 3D printing concept. This would also facilitate testing and general quality control due to the strict control of production vehicle.
As consumer-oriented 3D printing will take at least a decade to reach adoption rates, it is important that initially printers are available in the general area. Finding such printers would require an Internet-enabled search platform. Creating a new platform would be too costly, and hence partnership with an existing 3D search platform, such as 3dhubs.com, and the creation of a LEGO branded section would be more suitable.
The current LEGO Ideas platform serves as a crowd-sourced ideation platform for LEGO fans to submit designs. As this serves as the primary ‘design’ portal, an extension of this platform would be appropriate for the needs of this project.By implementing the 3D printing concept on a small scale LEGO will be able to evaluate the feasibility of 3D printing for its products and its potential as a disruptor.