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LEGO, the renowned Danish toy company, was established in 1932. Over nearly 90 years, its iconic bricks became synonymous with the toy industry's success. However, in the early 2000s, LEGO faced a severe financial crisis, flirting with bankruptcy and endangering its brand. This crisis resulted from diversification into unsuccessful ventures, competition from electronic toys, and significant manufacturing inefficiencies. Simply stated … along the way … they lost their way.
Sometimes you have to get lostso you can find a better way.
Amid the challenges, LEGO's revenues plummeted, reporting a staggering net loss of around $277 million USD in 2004. LEGO's comeback story is a testament to a return to the company's core values. They got back to doing what they do best. LEGO decided to refocus on its core business—building blocks. The company …
Reduced costs
Simplified its product line
Created innovative product designs
Eliminated manufacturing inefficiencies
Established an effective marketing strategy
Developed creative partnerships with “popular” brands
LEGO's shift back to its roots (what it does best) proved to be a turning point. By the mid-2000s, the company had successfully recovered, and its iconic building sets regained popularity and they became one of the world's leading toy manufacturers once again.
The LEGO story demonstrates how a company can overcome setbacks by returning to its foundational strengths and refocusing on their core products. For 2022, LEGO generated a total of $9.48 billion in revenue and an annual net profit of $2.01 billion.
The LEGO story imparts a valuable lesson: businesses can overcome setbacks by returning to their foundational strengths. Now, two crucial questions emerge for reflection:
What is it you do best?Where do you make your most profit?
If you plan on being successful and staying successful, then focus on what you do best. Don’t let competition push you away from what you do best. Focusing on what you do best allows you to leverage your strengths and core competencies, enabling you to excel in areas where you have a competitive advantage.
Concentrating on your strengths helps optimize resources, directing time, energy, and investments toward activities that align with your expertise and yield the best results.
By honing in on what you do best,you can build a distinct identity or brand.Specializing on your strengthscan set you apart in any market.