Lego Announces Growth in 2018 after 2017 Decline

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. reversal / rɪˈvɚsəl / (n) – the transformation of something into its opposite

    The company experienced a reversal in sales when it lost the money it made last year.

  2. streak / striːk / (n) – a period of time when something repeatedly experiences either only success or only failure

    The company experienced a three-year streak of losses before it finally filed for bankruptcy.

  3. recuperate / rɪˈkuːpəˌreɪt / (v) – to get back what was lost

    The company recuperated its losses through the success of its new product.

  4. further / ˈfɚðɚ / (v) – to make something bigger or more successful; to advance something

    The use of new strategies furthered the company’s growth.

  5. foothold / ˈfʊtˌhoʊld / (n) – a secure position somewhere that makes it easy to start or improve something

    ABC’s major store in Australia gave it a foothold there, making it easier for the company to expand in the country.


Read the text below.

Renowned toy company Lego returns to growth in 2018, a year after the company reported a drop in sales and revenue for the first time in 13 years.

After the slump in 2017, Lego Group’s global consumer sales grew by 3%, with majority of sales coming from the Asian market. Likewise, the company’s global revenue went up by 4% by the end of 2018; it reached 36.4 billion Danish kroner (around $5.5 billion).

Lego’s success in 2018 is a reversal of what happened the previous year. In 2017, Lego’s five-year streak of double-digit growth ended because of overproduction. This led to the company’s decision to restructure and lay off 1,400 Lego employees around the world.

The positive response to many of Lego’s new products also helped Lego recuperate its losses. The company made its greatest sales from sets based on popular movies, such as Harry Potter, Star Wars, Ninjago, and Jurassic World. The toy giant also profited from innovative products that combine traditional block-building and digital play. These include Lego’s augmented reality app called AR Playgrounds and the robotics set called Lego Boost.

In light of its 2018 success, the Lego Group announced plans to expand this year. The company aims to further its growth in its newer markets, such as the Middle East. Lego is also looking into entering India, which has been seeing a growing middle class population recently. Lego also has plans to continue expanding in territories where it already has a foothold, such as Australia and New Zealand.

The toy company says that it envisions a future with Lego stores all over the world.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• What are some possible challenges that the Lego Group could face when it expands to new markets (e.g. difference in taste, cultural differences)?
• How should the company prepare for these challenges? Discuss.

Discussion B

• If you owned a company that was experiencing some losses, what would you give up to recover successfully (e.g. employees, old products)? Discuss.
• How do you think very old companies manage to stay strong and relevant in the current market?