Reference no: EM133174735
Prior to beginning work on this discussion forum, read Chapter 13 of the course textbook and review the closing case in Chapter 13 Subsidiary Initiative at LEGO North America.
Peng, M. W. (2017). Global business (4th ed.). Retrieved from https://redshelf.com/
- Chapter 13: Strategizing, Structuring, and Learning Around the World
To remain competitive, a multinational steel company needs to reconfigure its operations to align with worldwide production. As a consultant on world steel production, provide a report that indicates appropriate personnel and resource allocation to each region of the world. As a part of your analysis, be sure to include your analysis for specific countries in which your client should maintain regional headquarters.In 1997, Peter Eio, head of LEGO North America, proposed to LEGO Group senior management at its headquarters in Denmark, the idea of licensing Star Wars characters for LEGO toys. This would enable LEGO to capitalize on the anticipated release of the new Star Wars trilogy starting with The Phantom Men-ace in 1999. From his North America headquarters in Enfield, Connecticut, Eio was convinced that the US toy market had become a license-driven market. Licensed toys such as Disney characters from Disney movies and Buzz Lightyear from Toy Story accounted for half of all toys sold in the United States. Despite its success, LEGO's go-it-alone culture had prevented it from leveraging any licensed products up to this point. Encouraged by Lucasfilm executives who were LEGO fans and who wanted to partner with LEGO, Eio thought he had proposed a winning product that would enable LEGO to get into the world of licensing. Unfortunately, LEGO senior executives' initial reac-tion, according to Eio himself, "was one of shock and horror. It wasn't the LEGO way." Specifically, LEGO executives felt LEGO did not need to license intellec-tual property from another player. Further, the specific characters centered on war and violence would vio-late one of LEGO founder Ole Kirk Christiansen's core values: never let war seem like child's play. According to critics, the very name, Star Wars, would violate the essence of the LEGO identity. Heated debate took place. One executive even claimed, "Over my dead body will LEGO ever introduce Star Wars."During the next round, Eio and his team surveyed parents in the United States to gauge their opinion on the marriage between LEGO and Star Wars. He also convinced his colleague in charge of Germany, which was LEGO's largest and by far its most conservative market, to conduct a similar survey. While US parents strongly supported the idea, German parents were also enthusiastic. Armed with such supportive consumer data, Eio pushed this subsidiary-driven initiative fur-ther and continued to meet resistance and push-back from senior executives at headquarters. Eventually, the founder's grandson and the president and CEO of LEGO Group at that time, Kjeld Kirk Kristiansen, who was a Star Wars fan himself, overruled his conserva-tive executives and gave the licensing deal his bless-ing. In 1999, LEGO Star Wars products were released on the wings of the blockbuster The Phantom Men-ace, becoming one of the most successful product launches not only for LEGO, but also for the global toy industry. In the end, more than one-sixth of LEGO Groups' earnings in the early 2000s came from the Star Wars line."
Bring the case current by reviewing LEGO further and describing additional alliances for LEGO, since the 1999 alliance with Lucas films.
- How can a firm like LEGO utilize knowledge sharing to promote additional alliance opportunities?
- What are the advantages and disadvantages of LEGO utilizing virtual teams for alliance negotiation, implementation, and follow-up performance?
- How can global alliances impact LEGO's social responsibility strategies?
- What impact does an "international culture mindset" have on an alliance's success?
- How can local culture impede alliance negotiations, and what strategies can LEGO employ to ensure success?
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