Citation
Brick by Brick: How LEGO Rewrote the Rules of Innovation
TL;DR
Lego losses reached $400M in 2004 with $800M debt
Definitive account of Lego's crisis (2003-2004) and regeneration under CEO Jørgen Vig Knudstorp. Documents the diversification failures (theme parks, clothing, software), return to core strategy, and execution of turnaround.
Provides detailed case study of successful regeneration through core focus: SKU reduction (13,000 to 6,000), divestiture of non-core businesses, workforce reduction, and subsequent growth to market leadership.
Key Findings from Robertson & Breen (2013)
- Lego losses reached $400M in 2004 with $800M debt
- Knudstorp's diagnosis: 'We tried to be everything. We're good at one thing: plastic bricks'
- Cut 54% of SKUs, 35% of workforce, sold theme parks
- Became world's largest toy company by 2014