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Case Study

Lego still on top

How has the simple Lego set, a toy conceived back in 1947 long before the advent of television and technology, managed to remain popular and relevant? Denry Machin investigates

Lego

The numbers are staggering: produced at a rate of 19 billion a year, there are over 440 billion Lego bricks in circulation — 62 for every person on Earth. They are sold in over 130 countries at a rate of seven sets per second. Through little plastic bricks, Lego has built a big business.

Despite a global decline in toy sales, and faced with a market dominated by games consoles and Transformer-style action toys, sales of Lego grew 18.7% in 2008. This was supported by income from Lego-related merchandise and licensing deals, which meant the Lego Group secured pre-tax profits of £212 million. Back in 2004 however, the company faced heavy losses and a possible sale to the US toy giant Mattel. In just under 4 years, a shrewd strategy has turned things around. Why does such a simple toy remain so successful?

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Tesco and emerging markets

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