LEGO has just announced that it is increasing the use of renewable plastic resin even though it means increased cost to the group (paying up to 60% more). With their surging profits, they are redeploying part of it to their sustainability commitment. This is seen as a strong signal to generate the right demand response among suppliers to increase the supply of greener raw materials. Not bad for a company one may have thought is from a bygone era and had a bankruptcy scare two decades ago. Now it bags the title of the world’s largest toymaker by sales & profitability.
Doing this may reduce LEGO’s overall profitability now but will set the right course for securing market share and accessing new growth. This is an example of the right strategic positioning as the move will improve brand perception and future-proofing their value chain.
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