LEGO, one of the largest toy makers from Denmark, managed to grow both its revenue
and profits during the COVID-19 pandemic, while other businesses struggled. One of the contributing reasons for this phenomenal financial performance was the strategic locations of its factories. That is, LEGO chose to locate its factories near its customers in order to respond quickly to customers’ changing demands and minimize supply chain disruptions. While other businesses may choose to build factories where production costs are the lowest, LEGO chose to facilitate its innovation process and to improve its resilience.
Currently, LEGO distributes products to over 140 countries, with factories in Denmark, the
Czech Republic, and Hungary serving Europe, Africa, and the Middle East; a factory in China serving Asia; and one in Mexico serving the Americas.
LEGO is building two more factories in the U.S. and Vietnam to meet growing demand
in North America and Asia.
After implementing this strategy for more than a decade, its production lead time—the total duration it takes to manufacture a product—has been reduced to only a few weeks. Amid global chaos, LEGO faced minimal supply chain disruptions during the COVID-19 pandemic, and its revenue and profits rose each year from 2019 to 2022, despite declines in many businesses.

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