What's the Secret to Lego's Success?

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July 16 (Bloomberg) -- Wharton Professor David Robertson discusses Lego's comeback with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Why did you write this book?

What was going on?

I study innovation management, how to allow companies to become more consistently innovative.

It was going to be illustrated by a case study from a different company.

And i saw a company that was so sophisticated with the way they managed innovation that i could say everything i wanted to say.

I could use a different toy for each chapter.

Based in denmark and family alone, it may all the pieces.

But in the world changed, this thing called the internet.

There is a bad time in 1999 where they began to wonder if it was over.

They began to innovate and from 1999 to 2002, they tried everything they could think of.

Innovation kind of went too far.

It almost put them out of business.

They were this close to going bankrupt.

An individual strategy?

It was a number of things.

There were so busy thinking outside the box, it almost put them out of business.

Inside the box, there was a lot of money there.

They went to the traditional police stations and fire trucks and began to make a lot of money.

You were challenged to come in and create a great play experience.

Your challenged to come and create a great police station and fire truck and not to use any peace that you want, but a reduced pallet where they can reduce lots of different toy sets.

Comment on the topic of the online franchise and how the challenge is to turn something that is the physical to something that is digital.

I can only say that the franchise obviously has gained a lot from going into the gaming world as well.

A look at the lego star wars games and other franchises that you see on different platforms and different franchises.

I think the star wars franchise itself is over 30 million copies.

That has definitely helped build of the franchise bigger than it used to be when it was only the physical bricks.

The idea of turning a toy from something that is physical and tangible to our brand and expanding on line.

The intellectual property behind it, they have an interesting dilemma going on line.

They had no guns or tanks, and nothing that shoots or kills, anything of that nature.

A lot of games on-line are things of that nature to have had to create a different creative experience that allows you to have a story at the back story and a sense of intellectual property.

They have been able to find their footing on that increasingly.

They have to remain in back, and going back to what they know, the properties that they know, that is a strong place to go.

But they did lose their footing for quite awhile.

How much success can be tied to new markets?

Some, but i think the same toys are doing so well in the traditional markets, -- what about the customers?

Age groups, parents, so on.

It is more of a boy toy, although the lego stuff like the pearly pink and purple bricks have sold twice what they expected.

They also have movies.

This is interesting because they were convinced it was going to replace the brick.

They found that increased the demand for the plastic brick.

When people saw the games, when they wanted the physical toll is more, not less.

There was no destruction going on at all.

Was there an internal confrontation to change the manufacturing sites?

There was a big controversy over that because when they suffer the financial crisis in or close to bankruptcy, they outsourced production and moved out of denmark to the czech republic.

They had to bring that back in house and are still making bricks, but also making them in the czech republic and mexico and other places.

This text has been automatically generated. It may not be 100% accurate.


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