LEGO's Great Business Model Turnaround Story

Lego, the colorful bricks were invented in 1949 and had created infinite possibilities of imaginary worlds for generations of kids and LEGO grew over decades. However, it nearly faced bankruptcy 11 years ago in 2004. What they did to overcome this was to re-engineer
back their operations by improving their Business Model (Canvas). The video below shows how Lego did their turnaround of their business model.

Lego had focused on 2 main areas which are their operations and also customers.

1. Operations Focus

• LEGO first streamlined its operations and decreased the complexity of its manufacturing processes. In particular, they reduced the number of different LEGO bricks by eliminating those that were difficult and costly to source. LEGO focused on a standard design of their bricks, which made their operations more nimble and allowed them to react quickly to market trends.
• LEGO also decided to get rid of  LEGO branded products that were tangential to their business and weren’t profitable. 

2. Customer Focus

• Lego adapted their kits to the dreams and desires of kids in the 21st century  (example, LEGO Mindstorms include smart bricks with both software and hardware to build customized robots).
• LEGO expanded to new markets by designing sets for undeserved segments (example, LEGO friends targeting girls) and expanding to emerging countries where their growth was soaring.

Source : Lego Turnaround Story

Click on the link to watch animated Lego Story on how it started -> Lego 80th Birthday.