Bang & Olufsen A/S Company Announcement Bang & Olufsen rolls out
2008-10-21 07:01:51.450 GMT

   Bang & Olufsen A/S Company Announcement Bang & Olufsen rolls out overall
                                strategy plan

 The management of Bang & Olufsen is rolling out an overall strategy plan for
 the Group's future development and operations.

 The aim of the strategy plan is to make sure that Bang & Olufsen:

 1. Focuses on product development in order for Bang & Olufsen to concentrate
 on fewer product categories, i.e. primarily audio and video products.

 2. Builds one common digital technology platform as the future technological
 foundation for the Group's products across its product portfolio.

 3. Ensures more effective support for, and development of, Bang & Olufsen's
 dealer network by creating one general global sales organisation.

 4. Increases the number of shops in growth markets.

 5. Adjusts costs by DKK 160 million to achieve short-term profitability.

 6. Appoints a new management team for the Group.


 1. Focus on product development: Bang & Olufsen will focus on the development
 of audio and video products as well as sound systems for cars. These areas have
 traditionally driven the Group's activities and have been its most important
 turnover generator as well as contributing to the creation of the unique Bang &
 Olufsen brand across the world.

 Bang & Olufsen, therefore, will no longer develop products within categories
 such as mobile telephony, mp3 players and stand-alone systems like DVD2 and
 HDR2. The Group will also cease its involvement with new co-branded products.
 Existing products will, of course, continue to be fully supported.

 Instead, focus will be on reinforcing the Group's unique brand through the
 creation of innovative high quality audio and video products as well as sound
 systems for the automotive industry. The forthcoming digital audio product,
 scheduled for launch in November, is an excellent example of one such
 innovative product.

 With the BeoLiving concept, Bang & Olufsen offers an unrivalled concept in
 terms of total solutions for sound and picture and other technical
 installations in the home. The Group intends to develop and refine this concept
 even further into real Home Integration. This will allow users, through their
 Bang & Olufsen remote control, to control everything from sound and picture to
 curtains and air-conditioning etc, an area that is showing considerable growth
 around the world. As a natural progression, Bang & Olufsen also intends to
 focus more on solutions and products adapted to individual customers'
 requirements.

 The management will also maintain the successful development of exclusive sound
 systems for cars. Sales of these systems are seeing a highly positive
 development and have reached a stage where management regards the segment as
 part of the Group's core business.

 2. Build a common, digital technology platform: Through more efficient
 utilisation of existing technologies and the targetted development of one
 general, future digital technology platform, Bang & Olufsen will not only
 achieve faster, but also more efficient product development. In the course of
 two to three years, this new digital technology platform will lay the
 foundation for all newly developed Bang & Olufsen products. Until then, the
 consolidation of the current technology platforms will ensure faster and more
 efficient development of high quality products from 2009.

 3. One general global sales organisation: Bang & Olufsen will continue to
 expand its current shop concept. With immediate effect, the management will
 initiate a process aimed at creating a more efficient global sales
 organisation. Until now, the Group's seven regional sales organisations
 worldwide have operated as independent units with their own back office and
 service functions. To ensure a consistent approach and respect for the whole,
 the management is centralising global responsibilities and, as a result,
 implementing a range of efficiency measures.

 The strategy plan comprises two further main components:

 • The management intends to direct greater focus on the dealerships so that
 dealers with the strongest growth potential will take centre stage. Other
 dealers will also be given renewed attention when resources are available.
 There will also be focus on establishing a uniform sales system with clear
 guidelines, action plans and follow-up tools.

 • The management intends to upgrade, and, more importantly, professionalise,
 the sales system. These measures will include a further development of the
 present sales staff into an international sales team of dynamic retail
 consultants with expertise within sales promotion, based on experiences with
 the best sales promoting initiatives within the global organisation. The
 ambition is for all Bang & Olufsen shops around the world to offer their
 customers a memorable experience of sound, picture, quality, professionalism
 and service-mindedness.

 4. More shops in growth markets: The management intends to open more B1-shops
 in world markets with the strongest economic growth. Over the next two years,
 the aim is to more than double the number of B1 shops in key growth markets
 e.g. Russia and China. Other growth markets will also be subject to an
 aggressive growth policy.

 5. Cost adjustments: Bang & Olufsen is implementing a DKK 160 million cost
 reduction programme for the current financial year compared to the activities
 envisaged at the beginning of the year. The purpose is to adjust the cost level
 to the Group's new and lower turnover level of recent months. Bang & Olufsen,
 however, will remain a dynamic organisation and the Group will maintain its
 high activity levels for product development despite the adjustments.

 As part of the cost reductions, the Group has, as of today, abolished in the
 region of 300 jobs. As a result, 165 employees have been made redundant while
 the remaining positions will remain unfilled etc.

 Other elements in the savings plan include reductions in the purchase of
 external services.

 6. New management team: To secure the successful implementation of the new
 strategy plan, the Board of Directors and the Group's CEO have appointed a new
 management team which, together with the CEO, will assume responsibility for
 transforming the plan into action, rapidly, efficiently and accurately.

 Bang & Olufsen's Management Board will consist solely of President & CEO Karl
 Kristian Hvidt Nielsen who took up his position on August 1 this year.

 The management layer below the Management Board will comprise:

 • Senior Vice President, Finance & Accounting, Randi Toftlund,
 • Senior Vice President, Operations, John Bennett-Therkildsen and
 • Senior Vice President, Sales, Michael Aagaard Andersen.

 The Management team will be also be supplemented by a further two positions:
 • A high-capacity individual with expertise in international brand marketing and
 • A highly-qualified expert who can meet the challenge of taking overall charge
 of Bang & Olufsen's product development.

 Based on his qualifications and experience, President and CEO Karl Kristian
 Hvidt Nielsen will personally head up - and ensure the ongoing progress of -
 product development until the right person has been appointed.

 Seen in isolation, the strategy plan does not change Bang & Olufsen's
 expectations for the current financial year. Traditionally, the Group's
 turnover for November and December is substantially above average. This,
 combined with the recent turbulence in financial markets has increased
 uncertainties. As a result, the Group will not give an estimate for the full
 2008/09 financial year until the publication of the interim report for the half
 year on January 15, 2009.


 Karl Kristian Hvidt Nielsen
 President/CEO

 Later today, Tuesday, Bang & Olufsen will present, and comment on, the
 implemented strategy plan at a meeting for analysts and the media. The
 presentation will be in English.
 The meeting will take place at 14:00 in Bang & Olufsen's Nortern European sales
 headquarters at  Kalvebod Brygge 43, 3, DK-1560 København V.

 For any further information, please contact:
 Karl Kristian Hvidt Nielsen, President/CEO, at +45 9684 5004


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  -0- Oct/21/2008 07:01 GMT

So no more Serene, Serenata, HDR2, DVD2, BeoSound 2 etc. - I think this makes sense.

I wounder if they will cease production, or just no develop any new products in that category?

Although it is very sad* for the staff that was made redundant today, it all seems to make sense for the company.

I know some of us love their B&O MP3 player and mobile phones, but today the competition is immense and offer products that even compete with B&O in term of design and usability, while being more affordable.

If the new platform includes a built in Hard Drive (like Loewe) then it makes sense to remove the HDR2. I'd still like to be able to have a standalone  B&O DVD/BluRay player for B&O TV that do not have a built in player. Even if, like the DVD1, it is Kikinoko in a nice aluminium box. As long as the right software and is nicely controlled with AVL** through scart.

p.

* It must be very tough, losing your job in "B&O village" Struer, it is not like when you lose your job in London. You'd have to move miles away before you can find a similar job. And with that many people doing it at the same time, you imaging the way the property prices will go.

** DVD2 was a different story: A B&O recorder needs 2 way AVL. DVD2 was 1 way AVL, hence its failure

  

 

wtlc2zpx:

Although it is very sad* for the staff that was made redundant today

I guess the people who lost their jobs were in the areas where B&O have decided not to continue development. Mind you, losing or not filling 300 positions from their HQ workforce is a fairly high number. I'm assuming these aren't external developers or people working in the stores, as they aren't directly employed by B&O.

Personally, id love to see a beocentre 2 with built in, updated via net, Blueray player :)

sounds good definitely a step or two in the right direction

timhanna:

Personally, id love to see a beocentre 2 with built in, updated via net, Blueray player :)

I Agree!

wtlc2zpx:

timhanna:

Personally, id love to see a beocentre 2 with built in, updated via net, Blueray player :)

I Agree!

Fingers crossed I guess :)

thank g-d for that

bno going back to what they do best

making the ultimate a/v gear for 'the rest of us'

leave the mobiles and toys to the big players - puhleeze 

Back to basics it is.. now lets put the rubbish behind us and look forward to what they can come up with.

mobeyone:

Back to basics it is.. now lets put the rubbish behind us and look forward to what they can come up with.

I'm disappointed to read that they're planning to advertise for the "Head of Product Development" job - I thought it would just be a case of me saying yes to the invite when it came

timhanna:

Personally, id love to see a beocentre 2 with built in, updated via net, Blueray player :)

Absolutely Tim. I've been saying the same thing for ages! Instead of looking at new objects, simply take what they've done well (like the Beocenter 2), update with Blu-ray, HDMI and perhaps some kind of ability to link to the B&O wireless network, Airport Express and other devices. Gives us options, at least.

I'm actually quite amazed that the Beocenter 2 hasn't changed much in the last five years. It's one of those products that drives people to realise why it's worth paying the extra for quality, until you realise that the technology is the same as a £20 DVD player you can buy from Aldi. 

Instead, we have a near £3000 SCART based basic DVD player. Sure, I'm sure the picture connected to the new BV7-32 or BV8-32 will be fine, but it's hardly technology pushing the bounderies.

What's wrong with Scart? It can carry RGB signals which are as good as SD gets. B&O have good reasons for not moving into the Blu-Ray market yet. I personally have found all Blu-Ray players to be very clunky.

Fortunately B&O comes back to what they do the best : Audio and Video business segments.

Getting ride of the MP3 players, mobile phones and stand-alone players shows it wasn't worth to invest in those projects. Knowing the fact that the competition offers similar product in design and onboard technology... at a better price (ie. Apple, Loewe, etc.).

I hope B&O will follow this path and bring us more pleasure with its products.

Guy

 

Alex:

What's wrong with Scart? It can carry RGB signals which are as good as SD gets. B&O have good reasons for not moving into the Blu-Ray market yet. I personally have found all Blu-Ray players to be very clunky.

Alex, when you pay £2800 out of your hard-earned cash (I won't say 'kids inheritance' - think Dragons Den) and you have to 'make do' with scart, then fine, you're welcome to your purchase.

However, it's the principle more than anything else. I want a HDMI-based updated BC2, whether I need the technology or not. Partly as I might need it in the future and paying near £3K for 2003 technology doesn't make me feel entirely comfortable.

A BluRay device would only make sense with a HDMI connection of course.

Scart might still be there for unencrypted (recordable) SD, and AVL and multi room distribution.

moxxey:

Alex:

What's wrong with Scart? It can carry RGB signals which are as good as SD gets. B&O have good reasons for not moving into the Blu-Ray market yet. I personally have found all Blu-Ray players to be very clunky.

Alex, when you pay £2800 out of your hard-earned cash (I won't say 'kids inheritance' - think Dragons Den) and you have to 'make do' with scart, then fine, you're welcome to your purchase.

However, it's the principle more than anything else. I want a HDMI-based updated BC2, whether I need the technology or not. Partly as I might need it in the future and paying near £3K for 2003 technology doesn't make me feel entirely comfortable.

HDMI may in fact make the image quality worse when watching SD DVDs.

HDMI is for carrying HD signals, and this is what it does best. Scart/RGB is for carrying SD signals, and this is what it does best. The upscaling should be handled by the TV, and not by the DVD player (which is what would happen should the BC2 be 'upgraded' for HDMI).

Thanks for posting this nice, easy to follow statement.
My heart goes out to the 165 poor souls who lost their jobs today, in this economic climate, and with Christmas just around the corner.

Nice to see the severing of ties with Samsung, no more half cast Kikinoko/B&O products! It won't be long before BS2, Serene, Serenata and BS6 become collectable.

Andy T.

Alex:

What's wrong with Scart? It can carry RGB signals which are as good as SD gets. B&O have good reasons for not moving into the Blu-Ray market yet. I personally have found all Blu-Ray players to be very clunky.

Actually there is nothing wrong with scart.  whats wrong is the poor quality of the lcd panels- whats the point of HDMI with panel quality presently being used?

 

very sad about the job losses but as many things move to outsourcing- many more jobs to go I would think- and many more as dealers give up.

Whilst the future plans look' interesting' how can dealers survive now

Alex:

HDMI may in fact make the image quality worse when watching SD DVDs.

But it doesn't support DVD-Audio either?

355f:

Actually there is nothing wrong with scart.  whats wrong is the poor quality of the lcd panels- whats the point of HDMI with panel quality presently being used?

To be fair though, I'm not disappointed with my BV7-40 PQ and, the customer has to be disappointed, to reflect that comment, 355f. I doubt you'd see too many people on here who would be disappointed with their recent B&O LCD TV PQ.

moxxey:

355f:

Actually there is nothing wrong with scart.  whats wrong is the poor quality of the lcd panels- whats the point of HDMI with panel quality presently being used?

To be fair though, I'm not disappointed with my BV7-40 PQ and, the customer has to be disappointed, to reflect that comment, 355f. I doubt you'd see too many people on here who would be disappointed with their recent B&O LCD TV PQ.

 

I dont doubt at all that the many purchasers on here of the BV7 for example ( i was not mentioning that set as the worst offender but ok we include that to) are delighted with their BV7 and other LCD- its the customer that are not buying thats the problem for B&O now!

But outside the blinkered world that is B&O ( i think they are moving into the real world now!) the products in vision are an enourmous price for mediocre performance- one only has to look at some of the latest offerings- very technically advanced and a 9th of the price.

Ok we have the B&O style- the integration- the quality- at least on the outside but really it doesnt perform.

And I say this comparing my BV4 with a pioneer k500 I have side by side to it this evening.

The cost is £2550  compared to £11,700 for the BV4 and in video quality the BV4 is pants im afraid by comparison- at these prices would anyone pay 10K more for something thats inferior- whilst I agree with the 'new mission statement from B&O  and its future direction- the main reaosn for the downfall of the business is sky high pricing and greed by B&O- 6 times more than it should be- 'designer brand or not!

moxxey:

Alex:

HDMI may in fact make the image quality worse when watching SD DVDs.

But it doesn't support DVD-Audio either?

No that's handled by the digital coax or the DVD player's built in decoders (which can then be pushed down scart).

DVD-Audio is just a way of saying 24 bit 96 kHz audio stored on a disc.

355f:

I dont doubt at all that the many purchasers on here of the BV7 for example ( i was not mentioning that set as the worst offender but ok we include that to) are delighted with their BV7 and other LCD- its the customer that are not buying thats the problem for B&O now!

Correct, and I agree with that. Snag is, there's nothing we or I can do about that. I've given them my thoughts on 'loyalty' and their UK MD thinks it's a good idea - we'll see what happens.

Good news, apart from the job losses.