1C Evaluation of key competitors
Competitors Analysis
This competitive analysis considers organisations in the analog, digital, and educational toys and games industries. Lego competes in all of these industries.
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Insights are used to reveal white space in which Lego should build its new digital initiative.
Finding the white space
We used the Digital Mastery framework to analyze Lego's competitors (Tekic & Koroteev, 2019).
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Click each logo to see a company overview.
Within the Digital Mastery Matrix, Lego is ahead of Mattel, Hasbro, and Spin Masters in its mastery of technology, due to their new adjacent innovations that combine digital and physical components as found in our Performance Assessment. Lego is not directly competing with the high tech competitors, Ninento and Banco Namco, because Lego’s customer demographic is younger (Smith, 2021; Snoad, 2011).
There is open opportunity for Lego to become business-model led, while still capturing value from the analog block as there is a whitespace for personalization, customer engagement, and data analytics. Lego will not compete directly with competitors if they focus on these areas, because no big competitor is a leader in these areas. Banco Namco and Nintendo have more experience in pure digital games, Mattel and Hasbro have more intellectual property and content, and Kiwico is too small to be a threat (Growjo).
Financial Performance
Lego’s strong financial performance indicates that Lego has a sustainable competitive advantage in the industry. In 2020, Lego’s total revenue, revenue growth, gross margin, EBITDA margin, NI margin, and return on capital percent was significantly higher than its largest competitors, except Nintendo (S&P Capital IQ, 2022).
References
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Growjo, Kiwico revenue, competitors and alternatives. KiwiCo: Revenue, Competitors, Alternatives. Available at: https://growjo.com/company/KiwiCo [Accessed March 5, 2022].
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Lego, 2018. Legal for kids. The Lego Group. Available at: https://www.lego.com/en-gb/kids/legal/privacy-policy [Accessed March 5, 2022].
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Mattel, Annual Report 2020. Available at: https://investors.mattel.com/static-files/0411d949-17af-4960-aefe-181088ec192a [Accessed March 5, 2022].
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Nintendo Co., Ltd., Annual Report 2020. Available at: https://www.nintendo.co.jp/ir/pdf/2020/annual2003e.pdf [Accessed March 5, 2022].
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Smith, C., 2021. How Nintendo Switch targets an older audience. GameGrin. Available at: https://www.gamegrin.com/articles/how-nintendo-switch-targets-an-older-audience/ [Accessed March 5, 2022].
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Snoad, L., 2011. Q&A: Lego. Marketing Week. Available at: https://www.marketingweek.com/qa-lego/ [Accessed March 5, 2022].
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Stem, Steam & Science Kits for Kids. KiwiCo. Available at: https://www.kiwico.com/ [Accessed March 5, 2022].
Tekic, Z. and Koroteev, D. (2019) “From disruptively digital to proudly analog: A holistic typology of Digital Transformation Strategies,” Business Horizons, 62(6), pp. 683–693. doi: 10.1016/j.bushor.2019.07.002.
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The Lego Group, Annual Report 2020. Available at: https://www.lego.com/cdn/cs/aboutus/assets/bltdee53df07dda2287/Annual_Report_2020_ENG.pdf [Accessed March 5, 2022].