Lego Group

—Jason

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One of the most popular toys in world today are Lego building blocks.  These seemingly indestructible pieces of plastic have captured the imagination of generations of both children and adults because they offer people the opportunity to create almost anything their minds come up with.  Lego sets are such a large part of the world that they can be found in almost any store, including specifically LEGO Stores.  Thousands of tons of plastic blocks are produced annually by LEGO Group in factories spread across the planet.

The creation of the company can be traced back to Denmark in the 1930s.  Ole Kirk Christiansen formed the LEGO Group from his woodworking shop in Billund, Denmark in 1934. Prior to this, he had focused on furniture, but a series of financial crises, fires, and a World War, transformed what had been a combination furniture/toy company to focus exclusively on the realm of toy manufacturing.  This began ten years earlier, when a fire broke out at the original workshop and destroyed the Christiansen’s workshop.  Having a new facility available, he expanded his business to include not only the manufacture of furniture, but also home construction, and a small production of wooden toys.

The financial crash caused by the Great Depression seriously impacted not only the United States, but the rest of the world’s economy.  Christiansen found the demand for home and furniture manufacturing dropped precipitously.  To boost sales and maintain the business, he began to shift the company towards the construction of miniaturized versions of furniture, vehicles, and buildings.  During 1934, Christiansen held a contest among his employees to come up with a new name for the transforming company.  He was drawn to the name Lego, which had two slightly different meanings depending on which language on used: roughly translated in Latin it meant “I read, I collect, I compose” or could be associated with the two Danish words, leg godt meaning “play well.”

Two factors limited the immediate appeal of new toys: the materials used were like already existing products and disorder caused by World War II.  The first of the new LEGO Group toys were constructed from either wood or metal.  Since these were traditional mediums for toys, Christiansen’s products did not make an immediate impact on the market.  Lego was also limited by the outbreak of World War II and subsequent occupation of Denmark by Germany from 1940-1945.  The end of World War II opened the market back up to the production of civilian items in a world that had been ravaged by years of warfare.  

Ole Christiansen was able to make the LEGO Group into a successful family-owned business in the Postwar world.  The availability of plastics in toy manufacturing allowed for quick manufacturing of products and the company slowly adopted the new material.  Kiddicraft, a toy company operating out of Great Britain, had previously developed and patented modular plastic building blocks called “Kiddicraft Self-Locking Building Blocks.”.  Christiansen managed to get some samples of the Kiddicraft blocks and felt this would be an excellent form to imitate for his own Lego Block.  In 1947, LEGO Group purchased its first plastic injection mold machine allowing them to now produce plastic blocks in addition to the wooden ones already being made.  Ole ensured that his 1953 patented Lego Murstein, or Lego Block, had been changed enough from the Kiddicraft design to avoid lawsuits.

Also, during 1953, Godtfred Christiansen, Ole’s oldest son, graduated from business school and became the junior managing director of the company.  Godtfred was faced with the dilemma of how to get the plastic Legos selling as well as the older wooden or metal building block toys.  He came up with the marketing idea to create an entire “toy line” of supporting products.  Each of the Lego sets could be interchanged all of the other existing products in the line.  Children would ask their parents to continuously keep purchasing new sets in order to build large collections.

Ole Christiansen died in 1958, leaving Godtfred and his brothers as the owners of the LEGO Group.  A redesign of the blocks was launched which gave them more flexibility and versatility when building larger and more complex sets.  Another fire destroyed the LEGO Group warehouse and Godtfred decided to switch materials exclusively to plastic.  A larger factory was built in Denmark to house even more plastic injection molds.  

They also decided that sale of Legos should be expanded into North America in 1961.  Something that potentially limited this new market was the lack of any factories to produce Legos in the United States or Canada.  Godtfred reached an agreement with the Samsonite Company to manufacture his plastic blocks until LEGO Group reached a point of opening their own plants.  Sales quickly soared in North America and LEGO Group felt confident that their product was now a success.

During the 1970s and 1980s, further expansion of the physical company and toy line laid the foundation for LEGO Group to become one of the most profitable privately owned companies in the world.  Kjeld Christiansen, Godtfred’s son, joined the managerial staff and pushed for the creation of a Lego line targeted for girls.  He also oversaw the establishment of Lego new manufacturing plants throughout Europe and North America.  Kjeld was also instrumental in the creation of the “Expert Builder Series,” later renamed the “Technical Series,” of Lego sets, which attracted more sales.  

By the 1990s, the LEGO Group underwent a transformation: many of the original designers had retired and a new culture developed.  LEGO Group reported its first major loss of revenue in 1998.  The gap in experience between the original designers and the discontinuation of some Lego sets led to a slump in sales.  While it was no longer necessary to create entirely “in-house sets,” officially licensed intellectual properties were produced to supplement existing Lego sets.  Arrangements were made to produce characters, animals, vehicles, and buildings from franchises like Star Wars, Marvel Studios, Harry Potter, Friends, and Jurassic Park flooded toy stores around the world.  

By the 2000s, LEGO Group had quickly rebounded from its temporary sales slump and resume its dominance.  Lego competitions were sponsored by the company in partnership with middle and high schools across the United States and this helped rekindle people’s love for these little plastic blocks.  Robotics, computer programming, engineering, and other scientific endeavors were combined to help spark innovation and imagination in millions of students.  Adding to the popularity of Legos were two feature length movies, many made-for-tv films and shows, and numerous video games which proved you didn’t need to have physical plastic blocks to build to your heart’s content.