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Bang & Olufsen

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Robert Carr

on 20 March 2014

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Transcript of Bang & Olufsen

Bang & Olufsen
The competitive structure of B & O’s markets

Power of Suppliers:
Good relationships with a network of suppliers.
Abundance of technology suppliers
Platform products, reducing the need for exclusive supplies.

Power of Buyers:
Reduced product life cycle.
Consumer demand expectations
Competitors pursuing differentiation strategy.
The competitive structure of B & O’s markets
Competitive Rivalry:
Speed=Unsustained competitive rivalry
Asian competitors - HD flat screen TV's
Competitors goods a fraction of the price of B&O
B&O, loss of competitive advantage
The competitive structure of B & O’s markets
Threat of Substitutes:
Changing consumer preferences
Competitors providing a multi-function products e.g Samsung

Threat of New Entrants:
Financial barriers
Large number of actors, mostly based in low cost Asian countries
Established competitors such as Sony, Samsung, etc.

Analyzing B&O’s & competitor strategies using a SWOT analysis.
Analyse the generic strategy of B & O and that of its competitors.
Sustaining the magic
Background Information
Founded in 1925 in Struer, Denmark
Initially a Radio manufacturer
Opened their first dedicated stores in the early 1990's
Voted number 4 in the Top 20 Cool Brands 2008
Began restructuring in 2008
Abandoned MP3 and mobile technology
300 staff laid off
Increased focus on Audio & Visual products
Bang & Olufsen:
Focused Differentiation

Cost Leadership

Bang & Olufsen: Competitors:
-Brand Value -Cost Leadership
-Quality & Design -Low cost Asian countries

Bang & Olufsen: Competitors:
-Not Price Competitive -Develop own technology
-Focused on new markets

Analyzing B&O’s & competitor strategies using a SWOT analysis.
Bang & Olufsen: Competitors:
-Increased Focus on Design -M&A

Bang & Olufsen: Competitors:
-Economic Conditions -Rising labour costs
-Outdated Products
B&O's capabilities and key success factors in the markets in which they compete. How sustainable are B&O’s competitive advantages?
Core Competencies of B&O;

1. Quality 2. Design 3. Brand Value

Key Capabilities of B&O;
- Improved efficiency and enhanced product development (Quality)
- Innovation embraced, new technologies sought (Quality/Design)

- Unlimited constraints leading to high levels of innovation (Design)
- Combined insourced specialised technology with own technology (Design)
- Simplified production, single platforms (Design)

- In-house manufacturing, proprietary knowledge kept internal (Brand Value)
- Industry expertise with access to new technologies (Brand Value)

How might B&O use collaboration strategies to improve its competitive position?
External designers.

Technological partnerships

Manufacturing partnerships

Selectively licensed technologies sold to companies in other industries (Lamborghini)
How might B&O use collaboration strategies to improve its competitive position?
1. Seek further partnerships with emerging technology specialists to enable greater differentiation.

2. As design is a significant USP they should look to collaborate further with new product designers.

3. Continue to sell their selectively licensed technology to other companies in different industries. Revenue could filter into the company in this alternative way.
Is B&O well placed to deal with the likely changes in the market?
Pest Analysis
Decreased strategic partners
Fewer barriers to trade

Economic Crisis
Loss of 20% turnover
Pole Position
Cost Structure
Market Conditions
Customer Attitudes
Status Symbols
Technological Excellence
Fewer Product Categories
Single Tech Platform
Standardised Platform
Strategic Partners
Have B&O sustained the magic?
Achieved key strategic partners in China
Launched B&O PLAY
Automotive industry (€15 million in revenue)
Closed 125 stores & economic uncertainty in Europe
'Loss of momentum'
'Negative short term effects'
Pole Position deemed a success
New 5 year plan ‘Leaner, Faster, Stronger’
Full transcript