It’s story time kids….

There are these two big danish companies let’s call them Lego and B&O. They both started around the same time (1932 & 1925), found lots of love locally in their hometowns and in their country. But both quickly grew big, and their potential led them to try their luck internationally. Now even though this has all the makings of an H.C. Andersen fairytale, it isn’t. Well at least for one of the companies… we will tell you which one in a bit.

Lego and Bang & Olufsen may on the surface not look like two companies that have very much in common. One targets the youngest of young ones, and the other wants you to spend your hard earned money on their luxury items once you’ve made it, and retirement is becoming something that’s closer than ever before.

But in fact they’re not too far apart at all!

6 years ago Lego were looking down the barrel of a loaded gun:

“In 2003, the Lego Group faced a budget deficit of 1.4 billion DKK (220 million USD at then current exchange rates), causing president Poul Plougmann to be fired and Kjeld Kirk Kristiansen to take over. In the following year, almost one thousand employees were laid off, due to budget cuts.

However, in October, 2004, as the Lego Group faced an even larger deficit, and in 2005, the Lego Group reported a 2004 net loss of DKK 1,931 million on a total turnover, including Legoland amusement parks, of DKK 7,934 million.”

So even though Lego is a brand known all over the world, even toy manufacturers that push legal plastic “drugs” to the ever growing collage of kids, are having a very hard time.

So they restructured, and i’m sure that they hail firing thousands of people and so on, as the thing that turned it around for Lego. But here at BANDIT we always see things with our heads ever so slightly tilted to one side.

On one side we see is the vast amount of themes box sets, and ever growing leaps into video games.

Some of those moves are quick money, some are very smart business… But there is a thing that you may easily miss. Maybe because it’s not seen a huge business, more as branding. But a brand like Lego needs to keep branding itself, and it needs to do it very smartly.

The smart thing Lego did was to take these “fake” products serious….

“In the past, Jorgen Vig Knudstorp, Lego’s chief executive, says, “we considered the adult fans like vintage cars, a bit bizarre.” But he called on another longtime Lego executive, Tormod Askildsen, to work with adult fans. Now Mr. Askildsen journeys to Lego conventions organized by adult enthusiasts, while working with 44 Lego “ambassadors” from 27 countries, seeking advice about new toys and heading off public anger when older lines, like Lego’s 9-volt train sets, are phased out.”

That spawned a collaboration with Digital Blue and led to, amongst others, these two products.

You may wonder why this is such an important move by Lego. Allow me to reintroduce B&O to this little fairytale’ish story.

Bang & Olufsen are more or less in the same financial situation right now, that Lego were in before they woke up. They make an world renowned product, but with todays financial climate it’s even more expensive than it used to be. Combine that, with the fact that the quality hasn’t really been up to par either. Their segment has more luxury options than ever before.

Which leaves B&O where…? Well certainly out of touch with reality, and also almost stupidly resistant towards any kind of change.

And if they think this is going to change anything long term, then they’re sadly mistaken…

Sure the Beovision 10 will probably hit home with their corest of core audiences, but what about the people that will someday become their core audience? Why not make as much money of them as possible?? Starting right now….

And this is where Lego and B&O become one! Or could, if B&O would just get of their high horse.

Lego have succeeded in talking to the 15-35 year old demographics by being able to attach themselves to a Lego trend wave that started about 3 years ago. People building their own toys out of Lego. People that played with Lego with kids, and still feel passionately about the product. So much that they make gadgets and even art out of it.

But it’s also a movement that Lego had nothing to do with at first. They were just smart enough to tap into it. Not because these people buy tons of Lego, but by staying on their good side Lego creates the opportunity of staying high on their list whenever they get kids themselves, or buy presents to others.

The people i’m talking about, is the same people that spend fortunes on sneakers, laptops, phones, clothes and so on just to stay ahead of the game.. They are the first movers!

B&O have had several opportunities to jump onto that same wagon.

Had they paid attention to the massive love they get from guys like Kanye West (here, here, here and here) then their world could have been a lot different right now.

Maybe they would then have been bold enough to rethink their strategy and see the smart thing in having an few entry level products, for the many up and coming first movers, that are yet to be able to pay full price for their products.

Instead these people now have other products in their homes. Products that create an emotional link with them, and influences them when they some day have the opportunity to buy B&O….

Who knows what they will pick then?!?!?!!

BANDIT