LEGO ends its relationship with Shell

The name 'LEGO' is an abbreviation of the two Danish words "leg godt", meaning "play well". It’s their name and it’s their ideal.

The LEGO Group was founded in 1932 by Ole Kirk Kristiansen. The company has passed from father to son and is now owned by Kjeld Kirk Kristiansen, a grandchild of the founder.

Nowadays, the LEGO Group continues its growth and presents strong annual results. “In 2014, we increased our sales by 15 percent. I am proud that we delivered high quality creative play experiences to millions of children all over the world. This resulted in a highly satisfactory result for us, and it remains our aspiration to be the best at what we do,” declared Jørgen Vig Knudstorp, President and CEO of the LEGO Group.

Indeed, the results of the Danish company are great. Their revenue growth excluding foreign exchange impacts was 15% year over year on a local currency basis, also their revenue increased by 13% in DKK to DKK 28.6 billion against DKK 25.3 billion the year before. The year's operating profit increased to DKK 9.7billion against DKK 8.3 billion in 2013 – an increase of 16%. There was zero product recalls this year, for the 5th year and the number of their employees only keeps increasing every year. 

LEGO has been the victim of many controversies for the past years. For example, there was the one of Zbigniew Libera's project consisted of fake Lego packaging detailing an Auschwitz-style death camp. Some Holocaust activists saw the work as trivializing the experiences of survivors, while others disagreed. The Jewish Museum in New York City displayed the sets for several months in 2002 as part of an exhibit on Nazi imagery in modern art. There was also the “Friends” set controversy. In fact, when Lego Friends was launched, it was met with protests from some consumer groups saying the toys were reinforcing gender stereotypes. The line includes a set for girls with mini-figures in pink, purple and green settings, a dream house, a splash pool and a beauty shop. In the US, the SPARK movement against the sexualization of girls and young women organized a petition with more than 50,000 signatures calling on Lego to change its marketing strategy.

There was also the story of the petition against the collaboration between LEGO and Shell made by Greenpeace. They realized a short movie, using LEGOs, and showing the scenes being drowned in a flood of petrol.

Green Peace’s campaign, in the end, resulted to what everyone wanted. After more than 50 years of partnership, the multinational ended its relations with the oil giant. 

“Kids have a very honest and pronounced view on things such as the Earth and -animals. I wondered why Lego with such a strong brand and such dominance would get into bed with Shell,” he said. “Greenpeace have done an outstanding job, to apply the pressure. This is a wake-up call to oil and gas and other energy companies that need to recognize they cannot lobby the [younger] generation that is going to inherit the Earth. Their spin machines need to wake up to that.”

The world is flat - Book review

In The World is Flat: A Brief History of the Twenty-first Century, Friedman discusses how technology has made the world more competitive and explains what is needed to compete in this new “flat” world. He describes how manufacturing companies have moved plant locations overseas to take advantage of cheaper raw materials and labor in an effort to make their products more cost competitive. This outsourcing has turned to service industries as well. Friedman cites examples where United States tax returns are now being processed in India, and even McDonald’s drive-thru orders might be processed by a call center hundreds of miles away.

Friedman talks about 10 forces that flattened the world and what this flat world means for America, developing countries, and world geopolitics.

For example, he talks about the Internet and how it has increased the ability for small companies and foreign businesses to compete with larger U.S. based businesses. Netscape developed an Internet browser that could work on several different types of computers; therefore, the ability to share information quickly and easily was greatly increased. With this example, we can really see how flattened the world is. The Internet is now available almost everywhere in the world and it is not about to stop, on the contrary, it is the one thing that all countries have in common and it helps bring them all together. Indeed, it is now possible thanks to the internet to interact with people from the other side of the world or to do business with them.

Another example of those forces is the Supply-Chaining – partnering with other businesses to receive items when needed. Friedman provides an example of how Wal-Mart automatically orders stock replenishments once an item is sold. This free flow of information from one company to another automatically gives firms the ability to react quickly.

Critical view:

Towards the end of the book, Freidman touches lightly on an interesting topic that can pay huge dividends for everyone —the craving people have for positive feedback. This concept is not new; however, innovative businesses are now including feedback ratings as an integral part of their business model. Friedman recounts a story in which Arthur Levitt, former chairman of the Securities and Exchange Commission, called Meg Whitman, CFO of eBay, to tell her that he had just earned his yellow star for 10 positive feedback ratings. Every time a transaction is completed on eBay, both the buyer and seller can rate each other’s performance, and the number of positive feedback ratings from other users determines the color of the star displayed by the user name. Levitt is a collector of depression-era glass and has bought and sold it on eBay.

A part of the book that could be improved is when the author went on a diatribe against the American government’s environmental policy. The need to highlight risks to our environment is great, and the author does an admirable job of highlighting potential risks in an organized manner; however, the author crosses the line and gets into a brief spat of name calling. The effect of these acerbic remarks lessens the impact of an otherwise well thought out and logical argument.

One item to consider while reading this book is “how would my firm respond to increased competition?” Tax returns are already outsourced to India, and I am aware of financial planning firms that are outsourcing different parts of generating a financial plan to other companies. Would your firm benefit from outsourcing, and what tasks would make sense to outsource?

An implication Friedman makes that is relevant for financial planners is the concept of staying anchored, specialized, and flexible to survive increased competition. Anchoring means staying in close contact or proximity to your clients. Anchoring highlights the importance of face to face meetings, even if it involves a significant investment of time and travel. Many firms are already doing a good job of this; however, one may want to ask what makes my firm different from the competition? What specialized services or knowledge do I offer my clients that they cannot obtain from another firm? By thoughtfully answering these questions, one’s business can improve its ability to remain competitive.

Friedman reminds the reader that everyone wants and needs a sense of validation and positive feedback. Validation and positive feedback are essential for any business, especially financial planning firms. Not only are employees looking for these rewards, but clients are as well. Clients want to be sure they are doing the right things, and they need positive feedback and assurance in making decisions.

Opinion:

Although the book is lengthy, a full 600 pages, it is well worth the time invested to read it. There are very few books that can change the perspective of the world in which one lives.

The World is Flat did just that for me. The book opened my eyes to startling statistics and the economic realities that we face today. Friedman pulls all his research and experience together in a coherent, entertaining, and easy to read format that captures the reader’s imagination and attention.

The European Union sets out a plan to solve Energy problems

The European Union sets out a plan to solve Energy problems

As energy is the top priority of governments, the European Commission has today set out its strategy to achieve a resilient Energy Union with a forward-looking climate change policy in the UE. 

The Energy Union consists in four main points : 

- A solidarity clause, that would prevent from energy supply disruption and mean more transparency about the outside EU supplies, 

- Energy flows, for more freedom in energy consumption and the independance of regulators, 

- To put the energy efficiency first, so that it can compete on equal terms with generation capacity, 

- Last but not least, transition to alow-carbon society that is built to last. 

Nowadays, the EU is the biggest energy importer in the world, importing 53% of its energy and therefore depending, sometimes completely, on the rest of the world. 

Jean-Claude Juncker, Commission President, explained that the prices should be more affordable and competitive. He added : "This is about Europe acting together for the long term", therefore pointing out the necesity of being united in order to succeed, "I want the energy that underpins our economy to be resilient, reliable, secure and growingly renewable and sustainable". 

The Union Energy project is a very ambitious one especially since it concerns 28 countries and will help all these countries to be less dependent on others, as Maros Sefcovic, Vice-President responsible for the Energy Union, explained.