The Strategist

Sorry, We Ran Out of... Lego?

10/22/2015 - 15:18

It looks like some children will not receive their Christmas and New Year’s gifts. Not because they didn’t behave themselves – just one of the largest toy manufacturers in the world, the Danish company Lego, admitted it cannot cope with the flow of orders coming before the winter holidays.

Benjamin Esham via flickr
Benjamin Esham via flickr
As a company spokesman told Reuters, Lego factories are operating at full capacity, but it is not enough: the company will not have time to meet the needs of all customers until the end of the year. The manufacturer is going to perform orders, placed for the moment; yet there is simply not enough capacity to fulfill these coming in on November - December. Now is unknown which country will left unprovided, it is only clear that we are talking about Europe. The company explained that neither the Lego itself, nor stores, selling its tinker toys, were not able to correctly predict demand.
The coming shortage of Lego is the cost of success. In the first six months of this year, sales of the Danish company rose 18% to $ 2.1 billion. This means that Lego has bypassed the toys market leaders  - Americans Mattel and Hasbro (the manufacturer of the game "Monopoly") - revenues of which amounted to $ 1.9 billion and $ 1.5 billion, respectively.

The Lego constructors kits are snapped up partly because of regular uploads of kits, linked to cinema novelties, on the market: there are Jurassic World, Elves, as well as the actual "Lego. Film". Action figures of the new episode of "Star Wars" are already sold in stores. In addition, not only children play Lego: according to Quartz, the Danish company has developed a methodology Lego Serious Play (LSP) for the business. Within the LSP, companies use tinker toys to improve creativity, communication skills and ability for strategic planning of their employees.

Lego have great ambitions: the company is expanding factories in Mexico, Hungary and Denmark, as well as building a factory in China, which will have to cover the demand in Asia. In total for 2014, according to Reuters, it invested more than 3 billion kronor ($ 456 million) in the production of. If you believe the estimates of the former employee of NASA and the creator of the comic book Randall Munroe, all of these plants are about to produce so many Lego men figurines that their number exceeds the population of the Earth. And until that happens, some parents have to come up with other Christmas gifts.