Bang & Olufsen

Bang & Olufsen How the tiny family- take ined fellowship Bang and Olufsen survives and prospers in spite of either the multi-nationals house do. Consumer electronics is dominated by multi-nationals who believe branch and acquisitions are the keys to survival in this price-point conscious industry. So how come in a remote country town in the north double-u of Denmark, an organisation with a mere 3000 employees is prospering and charging premium prices? B&0 is still in the hands of the families who started it back in 1925.Young beam Bang and Svend Olufsen were both keen experimenters from boyhood with electricity and their first radios were built in the attic of the Olufsen house. Right from the start the alliance followed a philosophy of innovation. The company has always striven to decorate nobleer standards of performance than its competitors and, as a afterwardmath rear itself moving inevitably towards the upper-end of the market. Along the way styling became an import ant factor of the B&O philosophy. A number of their products are in the immutable design collection of the Museum of Modern Art in New York.The company uses freelance designers who are answerable to the product strategy de helpingment who are responsible for marketing planning and the technical feasibility of ideas. It took more than style, however, to knuckle under Bang & Olufsen its rum positioning in the market positioning. A long sequence ago it was realised that the key to survival lay in go products which were non only different but had qualities which could not be arrange elsewhere. Back in 1938 they produced a radio with a preset program function for 16 stations. In 1943 a B&O gramophone had an option for rogramming a 3 minute pause between tracks time to allow you to bow to your new dancing partner The first B&O TV receiver appeared in 1952. In 1951 they produced the worlds first stereoscopic picture cartridge. They invented the HX professional recording dodgin g which increases the headroom available for recording high frequency signals on all tape types. This system is now found in most good quality tape decks. In 1982 they introduced the Beolink system which gives round the house sound and round the house remote-control. For all their sensitive size Bang and Olufsen produce practically everything themselves. They even ake much of their own production equipment. Such are their capabilities that they supply injection moulding equipment to early(a) manufacturers and have developed such diverse products as an insulin pen and credit units for sound switching exchanges. Their entry into the telephone receiver blood grew give away of a contract to develop a new standard telephone for Danish Telecom. Since then they have sold over 200, 000 units of their elegant and characteristic handsets. The company regularly gets suggestions for new product categories. These are handleed but unless there is scope for a distinctively B&0 concept, it willing not proceed.Car audio is an example. Because the car stereo has to run short into a set size hole in a console, there is little or no scope to produce a distinctively different product that would fit into the B family of products. Today, B operate in more than 20 countries around the world. Their biggest single export market in terms of unite TV, video and high fidelity sound system sales is the United Kingdom. As mentioned earlier, this equipment does not fit into an living selling or price-point structure and would face an uphill peel in the bazaar atmosphere of the typical electrical retailer.This led to the ratiocination to carry forbidden the entire marketing, distribution, and selling (retailing) operations in- house. The calm and bosomy atmosphere of a Bang and Olufsen showroom is highly conducive to the appreciation not only of the performance of the product but the elegant styling too. The recording leaves no place for opposition or competitors for, as B&0 will gladly severalise you, there arent any. At the same time, higgle over such mundane matters as discounts seems very much out of place in such surroundings. Its a far clapperclaw from the rest of the industry where the sales staff can usually tell you very little but the price.The showroom decor is simple and piano to highlight the discreet styling of the equipment. The staff are very much part of this presentation. Fast talking and pressure to buy have no place here. When plurality are spending the kind of money a B&O system costs (the 1owest priced sound system is listed at $8,000 and you can go over $30,000 with the greatest of ease) they want time to relax and consider their choice very carefully indeed. The staff are there as consultants and advisors. In fact, of course they are very effective sales people who really know their products and ow to present them. There are several sise B&O showroom in Australia, all in study capital cities. Sales of audio and video produ cts run 50/50 and in both categories the best sellers are the top models in the range. So who buys this expensive equipment? It is probably easier to say who does not. The true hi-fi lover who loves electronics and midget dials & buttons tends to treat B&O with the same disdain that a sports-car buff has for an automatic Mercedes family car. Your typical B&O owner is more fire in music and entertainment than electronics. While he r she appreciates the unique styling, sheer quality and performance of the equipment, it is the ability to deliver at the notion of a button or even a glass eggshell which probably counts for more. B&0 have recognised that the hi-fi industry has made its products so complex and intimidating to the average person that he only become frustrated and conf utilise by all the contrary advice he receives. Visiting the hi-fi specialist can be an faze experience which ends up giving the prospective buyer an inferiority complex. B&0s approach is to put all t he complexity to one side. Technology is used to simplify. So, lthough B equipment has possibly the most sophisticated control systems of anyone in the industry, it is, paradoxically, probably the simplest of all to operate. Once you have a B unit in your home you become a prospect for upgrades and extensions. B were the first to shoot round-the-house sound and later video which can be controlled from anywhere in the house. Called the Beolink, it first came out in l982 and it is only 10 years later that any other such systems are beginning to appear. Any B model can be extended to give quality hi-fi or video to any room in the house. It is not B po1icy to bring out new models each year.Rather they introduce them to take on market requirements and then upgrade them when and as required. Very often existing equipment can be brought up to the latest specifications. It is also policy that all parts are fully available for 8 years after a model goes out of production. B still regularl y gets calls to returns equipment over 20 years old. All parts are airfreighted from Denmark. B are too small to develop original products like the CD or even the VCR. Their role is to take such products and enhance them, demonstrate them easier to use, and package them very uniquely and attractively.A considerable proportion of B systems are sold with an older model taken as a trade-in. The quality of the products is such that they have a ready second-hand market and owner loyalty is the highest in the industry. An organisation pf just 3000 people in a very high cost country taking on the open up giants of the electronics world sounds like an extreme case of wishful thinking. Band and Olufsen will tell that they think differently. They do. And it works. Do you know of any other business which has no direct competitors? Q Identify, Understand Analyse competition and suggest get hold of competitive positioning strategies.