Bang & Olufsen Case Study Analysis Business & Marketing Essay

Bang & Olufsen Case Study Analysis
Author’s Name
Institutional Affiliation
Table of Contents TOC \o "1-3" \h \z \u Answer 01 PAGEREF _Toc36345933 \h 5Strategic Problem of the Company PAGEREF _Toc36345934 \h 5Difficulty in Operating PAGEREF _Toc36345935 \h 5Need for Betterment PAGEREF _Toc36345936 \h 5Answer 02 PAGEREF _Toc36345937 \h 6Impact of Relevant Sectors from the General Environment on the Industry/Firm PAGEREF _Toc36345938 \h 6Changes in Distribution Strategy PAGEREF _Toc36345939 \h 6Technology Adoption PAGEREF _Toc36345940 \h 6Say ‘No’ to Customer Financing PAGEREF _Toc36345941 \h 7High Pricing PAGEREF _Toc36345942 \h 7Answer 03 PAGEREF _Toc36345943 \h 7Evaluation of the Industry PAGEREF _Toc36345944 \h 7Strategic Position of the Company PAGEREF _Toc36345945 \h 8Product Life Cycle PAGEREF _Toc36345946 \h 8Target Audience PAGEREF _Toc36345947 \h 8Answer 04 PAGEREF _Toc36345948 \h 8Performance of the Firm PAGEREF _Toc36345949 \h 9Preference to Outside Designers PAGEREF _Toc36345950 \h 9No Restrictions PAGEREF _Toc36345951 \h 9Feedback from Experts PAGEREF _Toc36345952 \h 10Answer 05 PAGEREF _Toc36345953 \h 10Core Competencies of B&O PAGEREF _Toc36345954 \h 10Best Quality & Design PAGEREF _Toc36345955 \h 10Innovative Ideas PAGEREF _Toc36345956 \h 10Answer 06 PAGEREF _Toc36345957 \h 11Strategy of the Firm PAGEREF _Toc36345958 \h 11Corporate Strategy PAGEREF _Toc36345959 \h 11Answer 07 PAGEREF _Toc36345960 \h 12Strategic Alternatives for the Company PAGEREF _Toc36345961 \h 12Functioning with Partners PAGEREF _Toc36345962 \h 12Pros PAGEREF _Toc36345963 \h 121.Advanced Technology PAGEREF _Toc36345964 \h 122.Saves Time PAGEREF _Toc36345965 \h 123.New Products PAGEREF _Toc36345966 \h 124.Financial Support PAGEREF _Toc36345967 \h 12Cons PAGEREF _Toc36345968 \h 121.Difference of Opinions PAGEREF _Toc36345969 \h 122.Dissatisfaction PAGEREF _Toc36345970 \h 133.Less Authority PAGEREF _Toc36345971 \h 13Use of Digital Technology PAGEREF _Toc36345972 \h 13Pros PAGEREF _Toc36345973 \h 131.Effective Communication PAGEREF _Toc36345974 \h 132.Demonstration PAGEREF _Toc36345975 \h 133.Generating Extra Profit PAGEREF _Toc36345976 \h 134.Targeting More People PAGEREF _Toc36345977 \h 13Cons PAGEREF _Toc36345978 \h 141.Use Infrequently PAGEREF _Toc36345979 \h 142.Time Consuming PAGEREF _Toc36345980 \h 14Answer 08 PAGEREF _Toc36345981 \h 14Recommendations PAGEREF _Toc36345982 \h 14References PAGEREF _Toc36345983 \h 16
Bang & Olufsen Case Study Analysis
Answer 01
Strategic Problem of the Company
Difficulty in Operating
Bang and Olufsen founded the companyin 1925. They tried to make great radios and then started to sell it initially to their friends. As they were doing well, so they somehow managed to get the startup investment after which they decided to shift into an industrial unit in Struer. Struer is situated in rural Jutland where local people do not readily accept a new comer’s entry. Even after spending 30 years in that place, people would still regard you as an outsider (Austin & Beyersdorfer, 2007). So, in short, no matter how much time you have spent in that place, if you came from a different place then you are considered as an outsider for them.
Need for Betterment
B&O products were considered something great due to its design reliability and because of this; consumers were ready to pay ample amount for their products. It was believed that due to B&O’s unique product designs, people used to watch its televisions for hours then they used to turn it on. But when they turned it on, the things got problematic for them as clients were unable to use it due to its sophisticated features. Then, the Apple iPod was launched in the market, which was highly praised by the designers, and therefore they felt a need for betterment in B&O’s products. They believed that they need to include better software as just focusing on product design would not help the company grow. Therefore, they visualized that in upcoming days they would expand themselves more into virtual space for manufacturing great design products with software’s that are distinguished from others. For this, the company needs to look for people who have in some way different skills and expertise than their traditional ones. So, Sorensen, who was working in the company for the past two years, was responsible for handling this issue. Therefore, he started testing by making the products through new ideas rather than the old traditional ideas. It was tough for the decision-makers to decide the right quantity of change needed at that particular time (Austin & Beyersdorfer, 2007). It was a crucial period for the company as one wrong move would create a significant impact on the reputation of the company. They need to bring some changes to their company to compete and sustain in the market.
Answer 02
Impact of Relevant Sectors from the General Environment on the Industry/Firm
Changes in Distribution Strategy
In the late 1960s, there was an immense competition from Asian producers which enforced Danish and European producers to shut their businesses. But at this time, B&O somehow managed to survive as they emphasize the high quality of the products. B&O was dedicated more towards providing best quality radios to people instead of making money through this business. The problems aroused when the distribution was more likely to exhibit truckloads of Japanese manufactured goods in place of B&O products. As the firm realized that the competition is getting tight and they are losing their position, so they, therefore, decided to change their distribution strategy. They chose not to put B&O products on shelves with several other products; instead, they would advertise their products through their retail channels. They would place skilled personnel’s who could guide customers related to the complicated aspects of the products (Austin & Beyersdorfer, 2007). This strategy worked for them as the overall revenue of the company got increased.
Technology Adoption
In 2001, B&O under Sorensen administration worked hard and tried to regenerate the method of its product development. They decided to adopt technology and entered in different sectors such as automobile, hotel industry, health technology business and mobile phone segment. It actually increased the profits for the company by 4 percent more than the preceding year.
Say ‘No’ to Customer Financing
The company provided investment for new franchises, but customer financing was not offered anywhere except in U.K. It was not provided because the leasing model shown by the company in an advertisement demonstrated as if people couldn’t afford B&O products, due to which they are being assisted in financing by the company. People misunderstood the ad after which B&O decided not to go for customer financing. Due to this reason, they did not offer it to their clients outside the U.K to avoid any misconceptions from the people (Austin & Beyersdorfer, 2007). Their motive was to work for the betterment of people because of which they tried to make things easier for customers instead of making it controversial.
High Pricing
The prices set by the company for their products were too high, and they were not affordable by most of the people. The company introduced products with small size and lower prices so that more people could have a trial on their products. But still, even the new rates were 5 to 10 times more costly as compared to other brand’s products (Austin & Beyersdorfer, 2007). So as a result, people who were more concerned about the quality of the product rather than its pricing bought the products of B&O.
Answer 03
Evaluation of the Industry
Strategic Position of the Company
The consumer electronics industry had better sales even in economic recession than any other sector because technology keeps on changing, and as technology change, people demand some new products. Due to technology advancement, new demand was created, which helped the businesses to keep on running even in downturns when usually other companies do suffer huge losses (Austin & Beyersdorfer, 2007). As people were more into buying the most recent gadgets, the company tried to make products according to consumer’s requirement.
Product Life Cycle
B&O produced home electronics and products of the luxury class. They featured standard products with extended product life cycles that turn down gradually than the industry standards. The company produces products that can last longer. Moreover, their products have a long-life cycle of around 15 to 20 years as compared to others which work for just 24 months. They even claimed that it is not easy to copy their products as they have unique material and techniques (Austin & Beyersdorfer, 2007). Moreover, it would get costly for others if they replicate their products.
Target Audience
The people...