Not every rebuild succeeds, but LEGO's did.
In 2003, the iconic Danish toymaker was losing $1 million daily. Sales had dropped 30% YOY. Debt had reached $800 million. The company that defined childhood for generations was months from bankruptcy.
By 2014, LEGO had overtaken Mattel to become the world's largest toy company by revenue. The turnaround didn't just save the business. It created a blueprint for how brands can refocus, rebuild, and scale.
LEGO is a clear example of what happens when companies strip complexity, return to core strengths, and build systems that support sustainable growth. That’s a critical lesson for B2B as B2C alike.
From its founding in 1932 until 1998, LEGO had never posted a loss. Then came the crisis.
Consultants rushed to LEGO's Danish headquarters with a diagnosis: The brick was obsolete. They pointed to Mattel's success with Fisher-Price, Barbie, Hot Wheels, and Matchbox. The message was clear. Diversify or die.
LEGO took their advice. It spent hundreds of millions to open theme parks. It built its own video games division from scratch, including the largest installation of Silicon Graphics supercomputers in northern Europe, despite having no experience in the field. Jewelry for girls. LEGO-branded clothing. The expansion continued.
Star Wars and Harry Potter sets sold well, but only when new movies were released. Otherwise, they sat on shelves. By 2003, sales had dropped 30% year-over-year. Debt reached $800 million. Operating margins collapsed. An internal report revealed the company hadn't added real value to its portfolio in a decade.
LEGO was producing more and innovating less.