Business and Brand Strategy
Lego’s overarching business strategy is to establish and expand its brand globally to promote learning through play. The company’s strategic statement is as follows: “at the LEGO Group, we have a singular vision – to be a global force for learning through play” (The LEGO Group, 2021, p. 6). In other words, Lego operates and competes primarily in the toy business, but it became exceedingly successful to the point that it slowly expanded its industries of interest, which now include animated movies as well. For example, Lego Movie is an American franchise that bases its characters, world setting, and many other elements on the company’s brand (Knight, 2021). However, the main competitiveness of the company still comes from its Lego toys, which are designed to engage children in the learning process by promoting creativity with the building.
The key brand strategy of Lego is to make the toys as recognizable as possible. Lego toys are unique and distinct from other alternatives due to their unique shape, form, and design. No other toy resembles the products created by Lego. Relative to its peer organizations, the company positions itself on the basis of its benefit for children’s development as well as differentiation since no other toy offers the brand experience provided by Lego (CMG, 2022). When a child enters a toy store, he or she is likely to be aware of Lego’s brand by naming the company’s toys as ‘Lego.’ No other company has this level of branding, where even children call and use the company to describe a particular toy.
CSR/CSV Strategy
The overarching philosophy or approach of Lego to social responsibility is to earn the highest level of trust and demonstrate responsible action. The articulated brand purpose is called Lego’s Planet Promise: “to play our part in building a sustainable future and make a positive impact on society and the planet” (The LEGO Group, 2022, p. 6). The company aligned its priorities with two United Nations Sustainable Development Goals (SDGs) (The LEGO Group, 2022). These are Quality Education (#4) and Responsible Consumption and Production (#12).
It is important to note that Lego’s products are mainly made from plastic, and thus, there is an additional level of expectation for the company in regard to sustainability and environmental contribution. There is a specific framework the company has employed, which is Children, Environment, and People, and each of them has a set of distinct commitments (The LEGO Group, 2022). Lego’s approach to social responsibility fully aligns with its business because it seeks to help the development of children through play, and thus, it needs to engage in sustainable action and a responsible economy. Lego’s products are wasteful, and the company has a strong geographic footprint, but it is compensating by striving toward a circular economy.
Areas of Focus/Cause Selection
The sustainability strategy and its issue selection are well-aligned with the company’s business because it seeks to promote the learning of children through play. Therefore, its first priority is children as well, and Lego deploys Play programs, Play training, and Build & Talk activity packs designed to improve learning and ensure children’s safety (The LEGO Group, 2022). When it comes to selecting partners, Lego has been highly strategic about it because two key partners are United Nations and UNICEF. In the case of the former, Lego works with the UN to accomplish the two selected sustainability goals. For the latter, Lego “Introduced the D&I Playbook in collaboration with our long-standing partner UNICEF to inform our communication and product development” (The LEGO Group, 2022, p. 6). In short, Lego’s partnerships showcase a company ‘playing it safe’ because it cannot get more reliable than collaborating with global organizations, such as the UN and UNICEF. Thus, there are no major concerns about Lego’s current strategy, but it could also cooperate with non-profits specifically focused on plastic pollution, such as The Ocean Cleanup or Plastic Pollution Coalition, to communicate its awareness, recognition, and desire to fight against the problem.
Tactics and Implementation
The key tactics employed by Lego to bring its strategies to life include consumer engagement, cause marketing, and product replacement, which are mainly done through investments. The first and major piece of the Planet Promise framework is Children, and Lego actively works with its target market by implementing Play programs, Play training, Build & Talk activity packs, and D&I Playbook (The LEGO Group, 2022). All of these efforts and endeavors are designed to enable access to education, enhance children’s development, and assist the Lego Foundation.
For two sections of the sustainability framework, Environment and Children, the underlying tactic is cause marketing because the company collaborates with UNICEF and the UN. A similar strategy is used for the People section, such as cooperation with suppliers, and the company engages its employees, but the category is not as significant and of a priority as the other two (The LEGO Group, 2022). When it comes to Environment, product replacement efforts can be observed, which include developing recyclable prototypes, donating toys to the LEGO Replay program, and paper-based bags (The LEGO Group, 2022). Lego has been trying to replace its plastic toys with more sustainable materials, but no successful achievement can be attributed to it because plastic remains more profitable.
Results and Impact
Lego’s overall approach is successful at ensuring that its efforts are authentic and sincere, but it is not as effective because the company is a massive plastic producer. No critique can be aimed at what the company does to help humans, such as children, parents, employees, and suppliers. In addition, Lego derives most of its energy from sustainable sources. However, the company failed to tackle its biggest sustainability problem, which is plastic waste and pollution. No amount of donations and energy sustainability projects can remove the core issue at hand. Lego toys are made from acrylonitrile butadiene styrene or ABS, which is highly durable, and it means that Lego products will take approximately 1300 years to fully degrade (Hayhurst, 2020). Therefore, the Lego toy’s quality comes at the cost of even worse sustainability than a regular plastic product, and the impact on the planet is immense. The company cannot produce its toys from other materials because it directly affects its profits and product quality.
Recommendations
From the marketing perspective, Lego was successful at securing trust and respect on a global scale. It helps by investing in children and parents, engaging employees, and encouraging its suppliers to go green. The strategic partnerships are safe and strong because these are the world organizations, such as UNICEF and UN. However, the core sustainability problem remains unaddressed despite efforts in the form of prototypes, donations, and low levels of product replacement with paper-based toys. The first recommendation for Lego is to reduce its investments in employee programs, supplier engagement, and toy donations. The second recommendation is to allocate the majority of investments to the research and development of ABS substitutes. The third recommendation is to explore the market’s response to more environmentally–friendly Lego toys. Instead of using cause marketing for energy, the company should release products made from wood or other sustainable materials. For example, for wood toys, Lego could accompany it with strong and powerful cause marketing as well as tree planting efforts to mitigate deforestation.
References
CMG. (2022). 6 brand positioning examples for your company. Web.
Hayhurst, C. (2020). Lego bricks in the ocean could take 1,300 years to degrade.Independent. Web.
Knight, R. (2021). All four LEGO movies, ranked, including Lego Batman.Cinema Blend. Web.
The LEGO Group. (2021). Annual report 2021 [PDF document]. Web.