1. Prepared by: Shakhzoda Khamidova Mostafa Soleimani Qussai Al - Shater

2. CONTENT Introduction Innovation of LEGO Group Strategy Risk Management
Step 1
Step 2
Step 3
Step 4
PAPA Model
Conclusion

3. INTRODUCTION
LEGO is a line of plastic construction toys that are manufactured by The Lego Group, a privately held company based in Billund, Denmark in 1932.
It is the third-largest toy manufacturer in the world in terms of sales.
The name of the company is an abbreviation of the two Danish words “leg godt” that mean “play well.”
There are 13,974 employees.

4. 33 branches in Germany
Japan
90 branches in USA
Russian Federation
China
South Africa
Korea
Taiwan

5. LEGO

6. The LEGO Group Strategy
The mission is:
“Inspire and develop the builders of tomorrow.”
Its vision is:
“Inventing the future of play.”

7. Growth strategy Based on a number of growth drivers.
One is to increase the market share in the United States.
It wants to increase market share in Eastern Europe.
It wants to invest in emerging markets.

8. Innovation strategy
LEGO Group focuses on creating innovative new products from concepts developed under the title “Obviously LEGO, never seen before.”
The latest example is LEGO Games System, which is family board games with a LEGO attitude of changeability.
The company intends to expand LEGO Education, its division that works with schools and kindergartens.

9. WHAT IS A RISK MANAGEMENT ?
It is the continuing process to identify, analyze, evaluate, and treat loss exposures and monitor risk control and financial resources to mitigate the adverse effects of loss.

10. LEGO Risk Management Step 1: Enterprise Risk Management Step 2:
Monte Carlo Simulations
Step 3:
Active Risk and Opportunity Planning (AROP)
Step 4:
Preparing for Uncertainty

11. Step 1: Enterprise Risk Management
Enterprise risk management is a comprehensive and integrated framework for managing credit risk, market risk economic, capital risk and etc.

12. The fields that LEGO Group is using from enterprise risk management are :
Strategic risk
Operational risk
Employee safety
Hazard risk
IT security risk
Financial risk
Legal risk

13. Step 2: Monte Carlo Simulations
The idea is to test the various outcome possibilities , well in real word only there is one of the outcome but in terms of risk assessment any of them can be outcome.

14. Step 2: (continuing) Fields that LEGO Group is using this model are :
BUDGET SIMULATION
CREDIT RISK
CONSOLIDATION OF RISK EXPOSURE
Risk appetite

15. Step 3: Active Risk and Opportunity Planning
Projects should defined minimum size or level of complexity its mandatory that the business case includes an explicit definition and method of handling both risks and opportunities.

16. Common language and reporting
Step 3: (continuing)
It differs from the former approach to project risk management in several areas:
Identification
Assessment
Handling
Re-assessment
Follow up
Reporting
Common language and reporting

17. Step 4: Preparing for Uncertainty: Defining and Testing Strategies
To get further ahead in the decision process, the LEGO Group has added a systematic approach to defining and testing strategies.
Four Strategic Scenarios: A group of insightful staff people (Hans and a few from the Consumer Insight function) defined a set of four strategic scenarios based on the well- documented megatrends defined by the World Economic.

18. The PAPA Model

19. Papa model
When looking at the scenarios, the LEGO Group uses, what it calls a Park, Adapt, Prepare, Act (PAPA) model.
Park: The slow things that have a low probability of happening, we park . We do not forget about them.
Adapt: The slow things that we know will happen or are highly likely to happen.

20. PAPA model (Continuing)
Prepare: The things that have a low probability of happening, but, if they do, they materialize fast.
Act : have the high probability and fast moving things that we need to act on now in order to make sure the strategy will be relevant.

21. Strategic Risk Management Return on Investment
The Strategic and Financial Management Process
The LEGO Development Process
The Customer Business Planning Process
The Sales & Operations Planning Process
The Performance Management Process

22. Conclusion
We want to emphasize that risk management is not about risk aversion.
If, or rather when, you want/need to take
bigger chances than your competitors—and get away
with it (succeed)—you need to be better prepared
Risk management should enable organizations to take
the risks necessary to grow and create value.

23. THANK YOU FOR YOUR ATTENTION