LEGOgroup was founded with the mission to inspire young children toexplore, as well as challenge their creativity potential (LEGOGroup, 2002).Ole Kirk Christiansen, a Danish carpenter started the company tomanufacture wooden toys. With these simple ideas, the company growfrom a small company into a major multinational corporation. In 2009,the LEGO Group was ranked as the fifth largest toys manufacturer.
Regrettably,the company underwent a great loss in 2004 that almost left itbankrupt. Both the inventory and manufacturing cost were too high andyet difficult to manage (Oliver, Samakh, and Heckmann, 2007).Therefore, the company had to lay down strategies to overcome thesecrises. For instance, it shifted its US production capacity toMexico. The downfall of LEGO group offers a good lesson thatoutsourcing does not always serves as the best solution to reducecomplexity and cut cost. It can also complicate issues rather thansimplify them.
LEGOGroup. (2002). Lego Mindstorms.
Oliver,K., Samakh, E., & Heckmann, P. (2007, August 29). RebuildingLego, Brick by Brick. strategy+business.Retrieved October 21, 2014, fromhttp://www.strategy-business.com/article/07306?pg=all