Intro to Business Lesson 4.3.2

Lesson 4.3.2- Pivoting

Intro to Business
Unit 4: Business Success
Topic 3: Scaling a Business

Vocabulary:

Pivoting-changing directions or goals

Open Ended

What does it mean to pivot?

Making a Change

Pivoting- changing directions or goals

Reasons for Pivoting a Business:
1. The current business idea is no longer working or making money.
2. A brand new business idea takes over what they planned to do altogether
3. The operations for their current business are too expensive, or resources are running out
4. The customers are considered a small part of the business, so they change to focus on that only.

Starbucks did not start off as a popular coffee shop on every corner. They started by selling espresso machines and coffee beans for people to brew at home.

Starbucks

YouTube started of as a dating site. The idea was for people to record little videos talking about themselves in order to find love. The idea was never a success, and the owner realized that the posting of silly videos was much more successful.

YouTube

​Instead of starting with video games, Nintendo's earliest business ideas included: playing cards, instant rice, a hotel, and a taxi company.

Nintendo

​Real-World Pivoting Examples

Lego's Pivot

Lego was in desperate need of a pivot in the 2000s. The toy company was losing a lot of money and was in danger of closing altogether.

Jorgen Vig Knudstorp spent the beginning of his time as Lego’s new CEO cutting back on the corporate office, researching, and listening to what customers wanted from Lego. He used that data to help change the direction of the company and steer it back to success.

As you watch, think about what strategies Lego used to correct its mistakes.

https://ccalms.blob.core.windows.net/production/153824/8e30da9d-687d-455a-841b-764f5c1b2a31-20230209132434413-Inside_the_Storm_-_Lego_(3_4)_(SD_Small_-_WEB_MBL_(H264_900)).mp4

Multiple Choice

Which statement best describes how Jorgen Vig Knudstorp pivoted the Lego business in the 2000s?

• He decided to change the blocks from small to all large sizes for younger kids only.

• He cut down the number of different blocks they manufacture to simplify operations.

• He decided to move the entire company to another cheaper country

In the end, Jorgen Vig Knudstorp decided to pivot the business away from expanding to more and more specialized and new brick pieces and instead cut back on a lot of the manufacturing.

The 14,000 specialized pieces were expensive to make and required more operations to create them all.

Scaling back the types of bricks also required Lego sets and designs to go back to a simpler build and the nostalgic feel fans of Lego have always loved.

Multiple Choice

Which reason led Lego to pivot its business in the 2000s?

• The business idea was no longer working or making money.

• The operations of the business were too expensive, or resources were running out

• The brand new business idea took over what they planned to do altogether.

Multiple Choice

What is a key problem businesses face when they start to manufacture too many different products or too many versions of a product?

• It becomes more expensive to manufacture so many different choices.

• People tend to not like having choices in products.

• The factory workers do not like to do so many different tasks.

What's Next?

​Next Class: Friday, 4/24/26

Lesson 4.4.1: Growing as a Business

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