The internationalization process of LEGO Group - a case study
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Date
2024-06-11
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Abstract
The aim of this thesis is to provide an insight into the internationalization process of the LEGO
Group, and the main focus is to analyze the LEGO Group's internationalization steps and process
with a known internationalization theory-model, namely the Uppsala model by J. Johanson
and J. Vahlne (1977), that originated in Sweden. This model focuses on the gradual increase
in involvement, and the gradual commitment to foreign markets, with a strong focus on current
experience and knowledge and the gain of new experience and knowledge with each step along
the process of internationalization. The available research done with this model suggest
that companies begin with low-risk, low-commitment modes of entry, for example exporting
through shipping/export agents, followed by higher-risk higher-commitment modes of entry,
such as own exporting companies, establishing sales subsidiaries, or wholly owned production
facilities abroad. Therefore, the underlying concept is that companies gradually move
into a market as they gain more knowledge and experience and reduce uncertainty in the new
market. Moreover, the Uppsala model deals with the preferences of firms to enter certain
markets that are close to their home country in terms of psychic distance, which could be
explained in degrees of differentiation in language, culture, political systems, and other factors
affecting communication, cooperation, understanding, and generally the sentiment in the new
market entered about the services/products offered and the companies themselves. The Uppsala
model is one of the most widely used and influential models of internationalization and is being
continuously updated by the authors. As mentioned before, the focus is
on the internationalization process of the LEGO Group analyzed by the Uppsala model. LEGO
is a Danish company with focus on plastic bricks - toy brick sets - that allow children and adults
to explore their creativity and imagination. Today, LEGO is known all around the world for their
iconic bricks and mini-figures, so we could say that their internationalization choices and decisions
led them to become a global leader in the toy industry. At the beginning of this research, it was
expected, based on the knowledge about LEGO, that LEGO Group's internationalization processes
were in line with the Uppsala Model theory, and this expectation was later challenged.
The research for this thesis was conducted mainly on the internet - through research papers,
theses, case studies, newspaper articles, and blogs. (Hult et al., 2020) (HKT Consultant, n.d.)
(Angola Transparency, n.d.
The aim of this thesis is to provide an insight into the internationalization process of the LEGO Group, and the main focus is to analyze the LEGO Group's internationalization steps and process with a known internationalization theory-model, namely the Uppsala model by J. Johanson and J. Vahlne (1977), that originated in Sweden. This model focuses on the gradual increase in involvement, and the gradual commitment to foreign markets, with a strong focus on current experience and knowledge and the gain of new experience and knowledge with each step along the process of internationalization. The available research done with this model suggest that companies begin with low-risk, low-commitment modes of entry, for example exporting through shipping/export agents, followed by higher-risk higher-commitment modes of entry, such as own exporting companies, establishing sales subsidiaries, or wholly owned production facilities abroad. Therefore, the underlying concept is that companies gradually move into a market as they gain more knowledge and experience and reduce uncertainty in the new market. Moreover, the Uppsala model deals with the preferences of firms to enter certain markets that are close to their home country in terms of psychic distance, which could be explained in degrees of differentiation in language, culture, political systems, and other factors affecting communication, cooperation, understanding, and generally the sentiment in the new market entered about the services/products offered and the companies themselves. The Uppsala model is one of the most widely used and influential models of internationalization and is being continuously updated by the authors. As mentioned before, the focus is on the internationalization process of the LEGO Group analyzed by the Uppsala model. LEGO is a Danish company with focus on plastic bricks - toy brick sets - that allow children and adults to explore their creativity and imagination. Today, LEGO is known all around the world for their iconic bricks and mini-figures, so we could say that their internationalization choices and decisions led them to become a global leader in the toy industry. At the beginning of this research, it was expected, based on the knowledge about LEGO, that LEGO Group's internationalization processes were in line with the Uppsala Model theory, and this expectation was later challenged. The research for this thesis was conducted mainly on the internet - through research papers, theses, case studies, newspaper articles, and blogs. (Hult et al., 2020) (HKT Consultant, n.d.) (Angola Transparency, n.d.
The aim of this thesis is to provide an insight into the internationalization process of the LEGO Group, and the main focus is to analyze the LEGO Group's internationalization steps and process with a known internationalization theory-model, namely the Uppsala model by J. Johanson and J. Vahlne (1977), that originated in Sweden. This model focuses on the gradual increase in involvement, and the gradual commitment to foreign markets, with a strong focus on current experience and knowledge and the gain of new experience and knowledge with each step along the process of internationalization. The available research done with this model suggest that companies begin with low-risk, low-commitment modes of entry, for example exporting through shipping/export agents, followed by higher-risk higher-commitment modes of entry, such as own exporting companies, establishing sales subsidiaries, or wholly owned production facilities abroad. Therefore, the underlying concept is that companies gradually move into a market as they gain more knowledge and experience and reduce uncertainty in the new market. Moreover, the Uppsala model deals with the preferences of firms to enter certain markets that are close to their home country in terms of psychic distance, which could be explained in degrees of differentiation in language, culture, political systems, and other factors affecting communication, cooperation, understanding, and generally the sentiment in the new market entered about the services/products offered and the companies themselves. The Uppsala model is one of the most widely used and influential models of internationalization and is being continuously updated by the authors. As mentioned before, the focus is on the internationalization process of the LEGO Group analyzed by the Uppsala model. LEGO is a Danish company with focus on plastic bricks - toy brick sets - that allow children and adults to explore their creativity and imagination. Today, LEGO is known all around the world for their iconic bricks and mini-figures, so we could say that their internationalization choices and decisions led them to become a global leader in the toy industry. At the beginning of this research, it was expected, based on the knowledge about LEGO, that LEGO Group's internationalization processes were in line with the Uppsala Model theory, and this expectation was later challenged. The research for this thesis was conducted mainly on the internet - through research papers, theses, case studies, newspaper articles, and blogs. (Hult et al., 2020) (HKT Consultant, n.d.) (Angola Transparency, n.d.
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internationalization, lego, lego group, uppsala, uppsala model, analysis, case study, international, management