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  • 01-28-2012 9:05 AM In reply to

    Re: Bang and Olufsen Outsourced

    beocool:

    bayerische:

    Moxxey,

    That is probably true but the mainstream high-end or hifi community still sees B&O as a lovely "looking" box without any innards to speak of...

     

    I've felt like Don Quiote on many occations on the local HiFi forum in Finland. 

     

    My cousin is has been in the HiFi industry (Importer) for close to 20 years. Amoung others he's the official importer of ELAC, Dynaudio, Moon Audio, Aurender, Silent Wire, etc... According to him the BL5's are the best speakers he have ever heard! 

    The only ones "on par" are the Dynaudio Consequence ultimate edition, costing about 3 times that of Beolab 5. Not to mention the amps, dacs and CD/media players and wires...

    The setup I heard them in this last autumn was about 100K euro worth. And I admit it was on par with the BL5's! Big Smile

    Try and get a "Hifist" to believe this is, impossible. 

    I actually met your cousin, although only briefly... And I can confirm what he said about the Beolab 5's. Smile

    I have to say that reviews that I have read of the BL5,and BL9,in both Hi-Fi magazines,and on websites,have been ecstatic.

    I think that B & O has been very remiss in bringing these speakers to the hi-fi public's attention.

    In all the years of my attending Hi-Fi Shows both in the UK,and overseas,I don't recall B & O once being in attendance.

    Additionally,they do not appear to have supported their high end speakers with similarly high end ancilliaries,such as a Preamp,or CD Player.

    My hi-fi system is from a small swiss manufacturer Ensemble Audio www.ensembleaudio.com

    If they can make a complete system,then why not B & O-assuming they are serious about high end audio.

  • 01-28-2012 9:08 AM In reply to

    Re: Bang and Olufsen Outsourced

    I may get shot here, but it wasnt Margret Thatchers fault that the mines closed and the fact we haven't any uk owned vehicle manufacturers left anymore. It was down to the fact that these people were on very good money £30k for a miner (I think) in the late seventies early eighties and they still wanted more!  They even made it so that they included time to get to the coal face, in the working shift and also the fact that they didnt want to graft for the money.  They also thought nothing of sabotaging machinary so they had to down tools on the shift!

    This isnt everyone that worked in mining, I know there were people that did want to graft and earn an honest living.

    For some reason in the UK we have a class system in place, where there is a feeling of resentment almost a poison that flows through people!  Where if you work hard and get somewhere in life people hate you for it, I work with younger people and the atitude most of them have is one of unwillingness to work hard, if they keep saying they cant do it someone will come along and do it for them!

     

    So it became to expensive to dig coal out of british mines, sad really that its cheaper to import coal from somewhere else seeing as we have it in the ground here!!

    The ironic thing was that after the miners striking, they returned to work for less than they were offered originally!!

    Thatcher wasn't going to let them nearly cripple the country again, so I suppose took great pleasure in closing down our mining industry!

     

    The story is very similar for our car manufacturers! 

  • 01-28-2012 9:31 AM In reply to

    Re: Bang and Olufsen Outsourced

    Nickyg63:

    I may get shot here, but it wasnt Margret Thatchers fault that the mines closed and the fact we haven't any uk owned vehicle manufacturers left anymore. It was down to the fact that these people were on very good money £30k for a miner (I think) in the late seventies early eighties and they still wanted more!  They even made it so that they included time to get to the coal face, in the working shift and also the fact that they didnt want to graft for the money.  They also thought nothing of sabotaging machinary so they had to down tools on the shift!

    This isnt everyone that worked in mining, I know there were people that did want to graft and earn an honest living.

    For some reason in the UK we have a class system in place, where there is a feeling of resentment almost a poison that flows through people!  Where if you work hard and get somewhere in life people hate you for it, I work with younger people and the atitude most of them have is one of unwillingness to work hard, if they keep saying they cant do it someone will come along and do it for them!

     

    So it became to expensive to dig coal out of british mines, sad really that its cheaper to import coal from somewhere else seeing as we have it in the ground here!!

    The ironic thing was that after the miners striking, they returned to work for less than they were offered originally!!

    Thatcher wasn't going to let them nearly cripple the country again, so I suppose took great pleasure in closing down our mining industry!

     

    The story is very similar for our car manufacturers! 

    Well done that man, that is exactly what happened. The unions priced their members out of the market!

    However, I believe that we should avoid involving politics in our discussions on this forum. There are other places on the internet for that.

    Regards Graham

  • 01-28-2012 10:20 AM In reply to

    • KMA
    • Top 500 Contributor
    • Joined on 08-13-2007
    • Posts 101
    • Silver Member

    Re: Bang and Olufsen Outsourced

    Dkatz:

    KMA – You are sending a link to Apple propaganda on their website. Of course they are going to say they have the best standards, etc... That link was probably put up after all the scandal a year or so ago! It's to cover their asses...

    Dkatz, can you point me to reliable sources (articles, studies) that are not junk-press (such as Daily Mail arguably is) or propaganda to some other end as opposed to Apple's statements? I bet a publicly traded company would not publish facts (to a global audience) if they cannot back up them with actions, and if there's no truth to them. Are you claiming Apple is lying? Accidents of various types happen in just about every production enviroment regardless of where in the world a factory or plant is, and not everyone is happy with their work, no matter where or what the work is. When tragedies happen -- and given enough time they will happen everywhere -- isn't the correct action to investigate and take appropriate measure to prevent them from happening again for the same reasons?

    As for Beosound 8 and Beolit 12, when B&O specify the standards, components and materials, and have good QC, what difference does it make whose hands produce the products and in which part of the world? By "what difference" I refer to the quality of Beosound 8 and Beolit 12 made in China vs. if they were made Struer. How much higher quality Beosound 8s and Beolit 12s people in Struer could produce, and how? And more to the point, how would we notice the difference, apart from the "Made in China" / "Made in Denmark" label on the product, if the standards, materials and components were the same?

    Just wondering.

    KMA

    Current setup: BeoVision 10-46 (grey speaker cover, AR, motorized stand) with Apple TV 2 (FireCore), Sony BDP-S780, Mac Mini, BeoLab 11 (silver), Beo5, BeoSound 8 (red speaker covers). Accessories: A8 Earphones, wine bottle coasters.


    B&O product history, in chronological order since 1990, after the onset of the treaded BeoVirus (I tend to upgrade/change my setup "infrequently"): BeoSystem 2500 (with blue speaker covers), BeoLink 5000, BeoSystem 7000 (complete; silver/black), BeoLink 7000, RedLine 60.2, BeoVox Penta, BeoVision MX4000 (black, motorized floor stand), BeoCord VX5000 (black), BeoSystem 4500 (complete), BeoCenter 9500, BeoLab 8000, BeoLab 6000, BeoVision Avant (original, 28" AR, VHS, green), BeoCenter 2300, BeoVision 3-32 (grey speaker frame, AR, motorised cabinet), DVD1 (grey), BeoCord V8000 (grey), Beo4, BeoSound Ouverture (w/ floor cabinet stand), BeoVision Avant RF (grey, 32", AR, VHS), BeoSound 9000, BeoCenter AV5 (blue), BeoVision 1 (yellow, motorized floor stand), Beo1, BeoSound Century (yellow), BeoCenter 1 (blue, AR, motorized floor stand), BeoSound 1 (silver, floor stand), BeoVision Avant RF DVD (grey, 32", AR), BeoVision 7-32 MkI (AR, motorized floor stand), BeoLab 3 (black), BeoSound 2, BeoVision 10-40 (grey speaker cover, AR, motorized stand).

  • 01-28-2012 11:16 AM In reply to

    • Chris
    • Top 200 Contributor
      Male
    • Joined on 03-19-2010
    • Corbridge, UK
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    Re: Bang and Olufsen Outsourced

    Well said joeyboygolf. If an industry isn't paying its way, and is sucking the country down what you want is a leader MAN enough to make hard decisions and see them through.

    My home town of Swindon, and it had its famous railway works shut by Labour in 76, making half the town unemployed. Within 10 years it was the fastest growing town in western europe, primarily fed by manufacturing stuff people actually want to buy. Mining is a crap job, and Im personally glad they have shut down. My opinion is based upon the stories I heard from ex miners when i worked in Wales.

    The current CEO of B&O will be facing equally hard decisions about people's careers etc, especially hard when you consider the B&O employees are hardly a bunch of work shy militants.

    A Beovision 10-40 in black and red fret on order, Beo4, Beo6, many A8's, a pair of white and yellow Form 2's, Beocom 4, 28 inch Avant RF DVD, Apple TV and a wife that loves this stuff as much as i do! 

  • 01-28-2012 11:27 AM In reply to

    • moxxey
    • Top 25 Contributor
    • Joined on 04-14-2007
    • South West, UK
    • Posts 2,360
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    KMA:

    By "what difference" I refer to the quality of Beosound 8 and Beolit 12 made in China vs. if they were made Struer. How much higher quality Beosound 8s and Beolit 12s people in Struer could produce, and how? And more to the point, how would we notice the difference, apart from the "Made in China" / "Made in Denmark" label on the product

    I hope this doesn't come across as too nationalistic, but I bet 90% of American's don't even understand what "Made in Denmark" means. By understand, I mean, they wouldn't be able to point out the country on a map, know very little about the Danes design quality and so on. That's not necessarily being rude to American's, I only mention it as Dkatz is American, and I bet most British <25-year-olds would struggle to pinpoint Denmark on a map either. With this in mind, it wouldn't make the slightest bit of difference if Struer outsourced to Brazil, made it in Denmark or China. As these consumers wouldn't make their purchasing decision based on this.

    Most consumers just do not care. They only care about what makes them look good (particularly to their mates). If they can buy a brand at a discounted price, they will. That's their priority. Made in China/Made in Denmark will make very little difference to Beosound 8 sales. I was in my local dealer the other day and a 60-year-old couple were getting a demo of the BS8. They were quite impressed. They didn't turn it around to see where it was made, they didn't ask and they probably wouldn't even notice.

    Dkatz beef is China and the way he believes they treat their residents. Strangely though, I find Chinese to be some of the happiest people we've done business with. When they are here in the UK on business, whilst they have a lot of mutual respect for our history, they are glad to get back to their country, are proud of their nation, prepared to work hard to better their nation and only have positive things to say.

    It is ironic to be having this discussion when the same Chinese residents are buying Rolls Royce cars, our brands, have become Mulberry's number one customer....yet Dkatz is so angry/worried/annoyed about the Chinese. Which part of their lifestyle is affecting you?

    I would even go as far as saying it's more of a pleasure - as a Brit - to do business with a Chinese company than American. With respect, American's look down at business in this country, in our experience, making it hard to secure a business deal. The only way we ever secure deals in America is where the person doing business has studied or lived in Europe, widening their horizons. True American's care only about America. Whereas the Chinese are particularly keen to do business over here, despite the size of their nation.

    Just an opinion - I can see the replies now - but working in tech publishing, we do a lot of international licencing and syndication deals, and it's very difficult doing any deals in America. We have a number of key magazine brands, you'll see all over the world (including China), but not in America!

  • 01-28-2012 1:12 PM In reply to

    Re: Bang and Olufsen Outsourced

    Dkatz, I can agree about your laptop. I have just came back from Berlin, Germany and was surprised about their demand for quality. Almost every car was German. They really don't stand for poor quality, and as you say Fujitsu Siemens are produced there, Nokia of Finland, Loewe and Technisat of Germany. I doubt very much if their own products were being produced with low standards. I don't expect how you can get a quality product out of China when the order of the day is make them cheap and make them quick

  • 01-28-2012 1:21 PM In reply to

    Re: Bang and Olufsen Outsourced

    Fujitsu-Siemens used to be about as bad as computers got... 

    Nokia is garbage. All models. Best models are made in Finland though.

     

     

    -Andreas

     

    BLab5, BLab5000, BLab8000, BV10, BS9000, BS3, Beo5, Beo4, BLink1000, BLink5000, BLink7000, A2, A8, Form2

     

     

     

  • 01-28-2012 3:26 PM In reply to

    • Dkatz
    • Not Ranked
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    • Joined on 10-25-2007
    • San Francisco, CA, USA
    • Posts 70
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    Puncher – Perhaps in your case this item was $20 but my point is that it doesn't cost B&O that much more to produce an iPod dock in China than it does many other manufacturers that charge ¼ of as much so B&O are actually making more of a profit per item than them based on their name and prestige that people buy for although build quality and sound quality is only marginally better.

     

    Look at my previous post about iPhone and how economists have calculated that it would only cost $65 more per iPhone to build them in America! It's a $400 phone for the top end model so their profit would still be extremely high, especially with the amount the are selling. With mass production, when you are selling that many units, it's possible to make billions of profit for the company.

     

    Look at Braun's OralB electric toothbrushes, even the cheaper models are made in Germany. The top end ones cost less than the Philips SonicCare which are made in China and they still manage to make a really good profit off of them.

     

    Again my point is that B&O's only way was not to outsource and release inferior goods for the masses and ripping people off by making thousands of percents in profit. I think their audio equipment that's made in Europe that costs thousands is cheap in comparison to the BS8 and Beolit12 that cost less than 1000 because even at those prices they are not worth it. If it costs B&O say $20-50 to produce a BS8 or Beolit12 and they sell it for $800 that is a HUGE profit margin and unjustified. Of course it will make them money, way more than they need (but I guess not more than the CEO, boardmembers and shareholders need ;-). This is why I feel ripped off! If they are making a high quality hand assembled, struer built unit for $10,000 built by people who get good wages with a much lower profit margin percentage wise per unit, then I feel like I'm getting a much much better deal out of it!

     

    Moxxey and Folkdeejay – I might have exaggerated by saying a couple of hundred years but being a constitutional monarchy that is democratic through having a prime minister along with a parliament and having labour unions since the 19th century is progress compared to most other countries. There are many instances of worker uprising in that era, and the fact that this is not even happening in China today is quite depressing and shows how the government controls everything and everyone in the country. It is a much more authoritarian rule, perhaps more like Britain in the middle ages. The fact that people worked for measly wages during Dickensian times is due to poverty, but there was also a rising middle class during this time. In China and many developing countries the separation between rich and poor today is perhaps similar or worse in many ways to that time. They hardly have a middle class. To top it off, Britain in the 19th century invented so many things in use today. It was one of the greatest places of invention during the industrial revolution. China's industrial revolution however is a copycat one filled with people filling orders for western (or Japanese) designed and engineered products.

     

    On another note both my grandfather and uncle were engineers in the Soviet Union working in factories that dealt with manufacturing equipment for oil and gas extraction in Baku. My mother was in HR at the biggest (and I think only at the time) air conditioning factory in the USSR. She did a lot of auditing. This was in the 1960s-1980s and my whole family got decent living wages and so did the rest of the factory. The working conditions were not as appalling as those in China, in fact they are horrified when they see pictures of factories in China in comparison. Yes they look a lot cleaner, tidier, perhaps more health and safety in China but they also work a lot more like slaves with the hours they work and the miniscule pay they get. The labour unions were strong in the Soviet Union, everything was very bureaucratic. The managers of the factory only got marginally better wages than my mom or other workers and they lived a better life than the average employees only thanks to favouritism, connections and certain bribes (wine, cash, etc...). This was however, audited by my mother who reported such violations and got these kind of people in trouble. They tried to bribe her to keep her mouth shut as well but she did not take this money, I guess you could call it internal affairs within the company/factory. My point is that in China the factory owners today live better than the Soviet president did (I know as I met many of their children studying with me in London), these are the people who buy the Rolls Royce's you guys talk about, and the factory workers live much worse than most people in the USSR (not counting people in the Gulag's who probably lived in similar conditions). Do you really want to support such a system? Because I don't and I won't invest my money into it!

     

    TerryM – Excellent point! This is another great strategy that B&O should have used. Their higher end products are better than they ever were both SQ and design wise. If they had marketed themselves better as a high end audio manufacturer, brought out high end ancillaries and went to trade shows, etc.. perhaps they wouldn't be in the pickle they are. Instead they marketed themselves as a luxury brand based on designing cool looking things for your house and now cheap little things for your iPod...

     

    Nickyg63 – Good point but I think she would have closed them down anyways because they were not profitable enough. My point about Maggy was that it was her and Reagan with their neoliberalist ideals that liberalized trade, and paved the wave for British companies to outsource. This combined with China's own trade being liberalized in 1979 made it possible for companies to do what they wanted. They didn't have a responsibility to only manufacture in their own country and over the years more and more companies were outsourcing to make a higher profit. In many ways it was like “That companies making more profit than us because they are outsourcing, let's go that route too.” So companies followed each other like a herd until there was only a few cows left. Protectionism was nearly abolished (it only exists in the EU in a few key industries that are protected by the PDO (Protected Designation of Origin) such as in Buffalo Mozzarello from Campagne, or Champagne from Champagne, etc... but besides farming and a few other industries little is subsidized. Companies felt that if they wanted to stay competitive they needed to outsource as others were doing. This is the wrong mentality though to just follow the pack and manufacture for cheaper in order to stay afloat. Some companies such as Gensis for amps, Sunspel for base-layer clothing, etc... managed to survive and upmarket their goods. So today it's mostly only the higher end products usually that are made in the UK still as they can charge more thereby staying competitive.

     

    KMA – My point is that B&O does not own and operate the factory that they outsource to in China. Therefore they cannot dictate working conditions and the quality control will be lacking. This is exactly why nearly all professional grade products are manufactured in developed countries in the companies own factories that are operated by them with their own employees that they trained themselves, so they can have a higher level of quality control and therefore a higher quality of product. This is another reason that the BS8 and Beolit 12 are not up to par with other B&O products. One only has to look at them and feel them to see this when comparing it. I think B&O has lowered their own standards in order to “fill a gap” and “go with the flow of other companies.” As many have mentioned on here: if they didn't need the money so badly they wouldn't have done this, well doesn't that tell you something in itself? That this was B&Os last resort must tell you that they are reluctant about manufacturing there themselves, that they feel themselves that those products would be inferior to their standards. Why else would B&O manufacture their own metals and plastics and hand assemble glorious $10,000 speakers?

     

    Another point is that it's not about whose hands produce it. The BS8 and Beolit 12 are not hand assembled like their other Beosound products for one. They are extremely mass produced which goes against most of the other B&O products and this also contributes to the lower level of QC. They are not even made by B&O but simply made by another company that is not a high end audio manufacturer. When B&O produces their other products each product is tested with special equipment by one person in one room for example, this is not the case with mass production, especially of the sort in China.

     

    B&O might specify materials, components, etc... but it does not mean that they will be to the standard of the Struer/Czech produced ones. If everything was the same it would be less noticeable, yet if they were producing it in Struer or Czech they might have used different materials and components that they produced themselves in their own factory in Czech or Struer so I think it would have been different. Although my point is that the fact that they released such a lower end product and were OK with the quality shows that they really are in it simply for the profit.

     

    Bayerische – The Celsius H series such as the H240 I have or the newer ones are professional laptops. They have a 1920x1080 screen on a 15” laptop which is fairly uncommon, magnesium alloy cover, spillproof keyboard, shock sensors, fingerprint recognition, removable drives, etc... This was a laptop built for graphic designers, architects, etc... and it has been the most reliable and trustworthy computer I have ever owned. In fact I've had if for about five years now and it still works like new.

     

    In regards to Nokia – I have an E90 and love it. It is really outdated but I love the big keyboard and dual screens. Way better than anything I have seen and also made in Finland. I have dropped it about 1000 times and still works like new! Can't seem to find a decent replacement for this phone with this kind of build quality anywhere! Vertu and other such phones are out of my price range! ;-)

  • 01-28-2012 3:50 PM In reply to

    Re: Bang and Olufsen Outsourced

    symmes:

    I learned the best way to close a circular argument (from having teenagers past and present) is to find an example that shows the futility of continuing.  See if you can spot the irony here....Rolls Royce

     

    It was I that detailed what this article confirms in numerous lengthy posts much earlier on in this thread...

    Sales of Rolls-Royces and the like are skyrocketing in counries such China....the point is that if outsourcing was 'the way to go these days to survive' why dont R-R actually outsource to a Chinese company to build cars with 'R-R' badges substantially cheaper i.e. a lot more profitably for RR?

    Simple reason is the damage it would do to their brand image, loss of control over their extremely high quality standards, subsequent loss of exclusivity and confidence in their products....The new super wealthy clients RR are acquiring in the far east is precisely because of the exclusivity of RR as a hand built british super luxury brand who have not gone down the outsoucing route. This is exactly why the super rich of China want to buy a RR Phantom in the first place....exclusivity.

    ....isnt that pretty obvious? I've said all this pages and pages ago......Erm

    Michael

    BV5, BV Avant, MX4000, MX1500

    BS 7000, BS 5500

    Penta III, Penta II, BL 4000, RL 60.2,  RL 35, CX-100 Alu

    BL 7000, MCP6500, MCP5500,  BL 5000,  Beo4 (x2), BL 1000 (x2)

  • 01-28-2012 3:54 PM In reply to

    Re: Bang and Olufsen Outsourced

    folkdeejay:

    Dkatz:

    You have to remember Moxxey that the UK is a democratic country, has been for ages. The fact that the Union Workers can rise up at all is a statement that it is a free country. In China if workers did that they would get fired. If they complained about the government, etc... they would be put in Jail. Britain hasn't been like that for a couple hundred years now. Even in the 19th century Unions were formed and people were up in arms about many things as far back as then!

    You are joking ....Surprise

     

    Go and live in China for a while.....

    You'd soon change your mind about whether the UK is a democracy or not - irrespective of your political leanings.

     

    Michael

    BV5, BV Avant, MX4000, MX1500

    BS 7000, BS 5500

    Penta III, Penta II, BL 4000, RL 60.2,  RL 35, CX-100 Alu

    BL 7000, MCP6500, MCP5500,  BL 5000,  Beo4 (x2), BL 1000 (x2)

  • 01-28-2012 5:06 PM In reply to

    • symmes
    • Top 200 Contributor
    • Joined on 04-21-2007
    • Freedonia
    • Posts 290
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    @Bentleyman  That wouldn't be ironic, now would it.  Sorry to burst your bubble, but I don't go to BeoWorld for lengthy musings on social systems or global economics.  I am, and we all should be, very happy for the craftspeople of RR that VW and BMW chose to buy the parts of RR they wanted and kept it alive.  That way they were able to create the Chinese special edition for the titans who created the factories that.......   

  • 01-28-2012 5:29 PM In reply to

    Re: Bang and Olufsen Outsourced

    symmes:

    @Bentleyman  That wouldn't be ironic, now would it.  Sorry to burst your bubble, but I don't go to BeoWorld for lengthy musings on social systems or global economics.  I am, and we all should be, very happy for the craftspeople of RR that VW and BMW chose to buy the parts of RR they wanted and kept it alive.  That way they were able to create the Chinese special edition for the titans who created the factories that.......   

     

    Back on Page 1 or 2 of this thread I used the word ironic in the context that it was the 'newly' rich businessmen/factory owners in China and the Far East that are actually making up much of RR and Bentleys recent increase in sales.....that is the irony....we are now talking about the exact same point on page 12....

    I dont go to Beoworld for lengthy musings on social systems or global economics either.

    The fact that german owned companys bought RR and Bentley and kept them alive I am not disputing, nor have I commented on that fact.

    However, this thread is about outsourcing. Neither VW nor BMW have outsourced the production/manufacture of RR or Bentley. My point was.....imagine if they did.....What would that do to the image of their brands...? They are not outsourcing and yet their respective orderbooks are bulging and profits are soaring - i.e. they dont appear to need to outsource. 

    Some people in this thread are saying that outsourcing is the only way Bang & Olufsen can survive in todays global consumer marketplace. I am questioning this opinion (as are others) by citing examples (in this case RR/Bentley) of top-end companys who are not choosing to go down the outsourcing road.

    Dkatz has given other examples of small high end audio manufacturers who also have not chosen outsourcing - but yet they seem to be surviving ok/or doing well.

    My point is simple - is outsourcing the only way in which B&O can survive (as some here are saying). I have yet to hear an definitive explanation from anyone supporting this view, why it is that some companys (many, many have been detailed in this thread) do not seem to have to resort to outsourcing as a means of self survival.

    Can anyone actually give a definitive answer to this specific point? If yes, then I'd be happy to accept it. But as yet, no-one has.

    Michael

    BV5, BV Avant, MX4000, MX1500

    BS 7000, BS 5500

    Penta III, Penta II, BL 4000, RL 60.2,  RL 35, CX-100 Alu

    BL 7000, MCP6500, MCP5500,  BL 5000,  Beo4 (x2), BL 1000 (x2)

  • 01-29-2012 4:22 AM In reply to

    • moxxey
    • Top 25 Contributor
    • Joined on 04-14-2007
    • South West, UK
    • Posts 2,360
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    Bentleyman:

    My point is simple - is outsourcing the only way in which B&O can survive (as some here are saying). I have yet to hear an definitive explanation from anyone supporting this view, why it is that some companys (many, many have been detailed in this thread) do not seem to have to resort to outsourcing as a means of self survival.

    Can anyone actually give a definitive answer to this specific point? If yes, then I'd be happy to accept it. But as yet, no-one has.

    It's not necessarily about surviving. I think that's too specific. For me, and this is something Tue mentioned last year, B&O need to expand their userbase, attract a younger generation of custom. They aren't coming in to the B&O stores, so they had to look at other ways of promoting their products. One of these efforts is to partner with Apple and to get in to the Apple stores.

    To do this, they need to be able to meet the demand (or, more realistically, have enough product to spread between all the B&O stores, Apple stores and other locations). My assumption is that the Danish factories didn't have the mass-manufacturing capability and the Czech factory has been tasked with producing middle-of-the-range products such as my BV10, BC6, spares and other products.

    Of course, the cost of mass-manufacturing in China also helps B&O's bottom line.

    My brother has this dilemma right now. He designs and manufactures "cool" felt laptop and other bags. He produces them in New Zealand and, as a result, his costs are high. So much so that he struggles to make a profit. But he can just about fulfil demand producing them locally. He wants to ramp up distribution and move in to selling in Europe (he currently sells through the APAC region, retail/online), but to do this, he needs to find a factory that can mass-manufacture his bags. The only factories that can do this are in China (so he says), after looking around. There aren't other choices locally. But he also needs a minimum run of 10,000 units, which is excessive. As a result though, he more than halves (!) his production costs.

    So, he has little choice. China it is. He doesn't want to, he wants them to be produced in NZ, but the cost of doing so and finding the production level to meet his demand, has left him with few options.

    But, the sad thing is, no-one will notice they are made in China. He's had some production examples and he says they are, in same ways, better produced than from NZ and much more consistent.

  • 01-29-2012 4:32 AM In reply to

    • moxxey
    • Top 25 Contributor
    • Joined on 04-14-2007
    • South West, UK
    • Posts 2,360
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    Dkatz:

    Again my point is that B&O's only way was not to outsource and release inferior goods for the masses and ripping people off by making thousands of percents in profit. I think their audio equipment that's made in Europe that costs thousands is cheap in comparison to the BS8 and Beolit12 that cost less than 1000 because even at those prices they are not worth it. If it costs B&O say $20-50 to produce a BS8 or Beolit12 and they sell it for $800 that is a HUGE profit margin and unjustified. Of course it will make them money, way more than they need (but I guess not more than the CEO, boardmembers and shareholders need ;-). This is why I feel ripped off!

    Firstly, I don't know how anyone can feel "ripped off" by buying a Beosound 8. They aren't that expensive (for B&O!) and it is a fantastic product. If you look at the Apple store - where you would expect B&O equipment to receive less than generous reviews - reviewers have given it a 5-star overall rating http://store.apple.com/us/product/H3631LL/A/bang-and-olufsen-beosound-8

    As I've said before, NO-ONE will notice it's made in China. Only a very small number of an*l die-hard B&O fans, on here. As I said yesterday, I saw a couple of traditional 60-year-old customers taking a good look at a BS8 in the store this week, it's not something they asked (where it was made), not something they really cared about and wouldn't affect their purchase.

    Dkatz, maybe you, and a handful of very knowledgeable B&O die-hards may be mentally (!) affected by the BS8 being moved to China but, sorry to say this, but I think B&O won't lose out by leaving some of these people behind. I'm positive that they can bring far more users on board, even if it means losing some of the die-hards who look in to every aspect of B&O production.

    And there's no way it's going to cost $20 to produce a BS8. You've just completely embarassed yourself there, despite your huge rants on this subject. The speaker components alone are worth a lot more than that.

    Quite frankly, I don't think B&O are going to lose a great deal if some of these users leave the brand. Sometimes you have to leave behind the traditionalists to open yourself up to a new, younger and more vibrant audience.

  • 01-29-2012 8:01 AM In reply to

    • Puncher
    • Top 10 Contributor
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    • Joined on 03-27-2007
    • Nr. Durham, NE England.
    • Posts 9,588
    • Founder

    Re: Bang and Olufsen Outsourced

    I don't believe the Chinese buyers of Rolls Royce buy them for the heritage or the hand stitched leather etc. I believe they buy them because they are instantly recognisable as being a status symbol and very, very expensive. The few Chinese factory owners I've met are very, very keen to tell you just how much all of their possessions cost - houses, cars, watches, pens etc. I've seen some truly horrific diamond encrusted pens and watches that had cost 10's of thousands of pounds - in all honesty I couldn't say that any I've met had a fine eye for understated style.

    As for the small hifi companies that keep getting mentioned - do they employ 2500 people and have €588 million turnover? ................ thought not! They are completely different business models with different objectives, requiring completely different strategies.

    Generally speaking, you aren't learning much if your lips are moving.

  • 01-29-2012 8:25 AM In reply to

    Re: Bang and Olufsen Outsourced

    Puncher:

    As for the small hifi companies that keep getting mentioned - do they employ 2500 people and have €588 million turnover? ................ thought not! They are completely different business models with different objectives, requiring completely different strategies.

     

    On the one hand, you are saying B&O is a big company. On the other hand people are saying B&O is a small company (tiny in comparison to the likes of Sony etc. etc.)

    You cant have it both ways.......OK I accept B&O is a mid-sized company.......are we agreed on that now??

    So, as a mid-sized company is outsourcing the only way to go to survive....?

    On the one hand a very large multi-national could cite outsourcing as the right strategy due to economies of scale advantages. On the other hand, you are saying that smaller companys dont/wont/cant benefit from outsourcing due to their (small) size.

    B&O is mid sized. So they are therefore the same as the large corporations....? Maybe so.

    Yet we keep getting people saying B&O cant be compared with the huge multi-nationals, due to the fact B&O is much too small to be considered in the same way.....

    ....which way do you wish to go here?

    Michael

    BV5, BV Avant, MX4000, MX1500

    BS 7000, BS 5500

    Penta III, Penta II, BL 4000, RL 60.2,  RL 35, CX-100 Alu

    BL 7000, MCP6500, MCP5500,  BL 5000,  Beo4 (x2), BL 1000 (x2)

  • 01-29-2012 9:11 AM In reply to

    Re: Bang and Olufsen Outsourced

    Moxxey: Sometimes you have to leave behind the traditionalists to open yourself up to a new, younger and more vibrant audience.

     

    I think you're wrong there, from what I have observed, the younger, vibrant audience are simply not interested in this brand. The only die hard BS8 fans sem to be some of the traditional B&O customers. Nasty, cheaply made piece of junk. You think young people are going to be impressed by that? No, I didn't think so!

  • 01-29-2012 9:12 AM In reply to

    • Puncher
    • Top 10 Contributor
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    • Joined on 03-27-2007
    • Nr. Durham, NE England.
    • Posts 9,588
    • Founder

    Re: Bang and Olufsen Outsourced

    Bentleyman:

    Puncher:

    As for the small hifi companies that keep getting mentioned - do they employ 2500 people and have €588 million turnover? ................ thought not! They are completely different business models with different objectives, requiring completely different strategies.

     

     

    On the one hand, you are saying B&O is a big company. On the other hand people are saying B&O is a small company (tiny in comparison to the likes of Sony etc. etc.)

    You cant have it both ways.......OK I accept B&O is a mid-sized company.......are we agreed on that now??

    So, as a mid-sized company is outsourcing the only way to go to survive....?

    On the one hand a very large multi-national could cite outsourcing as the right strategy due to economies of scale advantages. On the other hand, you are saying that smaller companys dont/wont/cant benefit from outsourcing due to their (small) size.

    B&O is mid sized. So they are therefore the same as the large corporations....? Maybe so.

    Yet we keep getting people saying B&O cant be compared with the huge multi-nationals, due to the fact B&O is much too small to be considered in the same way.....

    ....which way do you wish to go here?

     

    What I am saying is that the many examples that are quoted have no direct applicability to the situation at B&O. Each company finds it's own level and niche - trying to operate your Florist business based upon Rolls Royce operating model is clearly not going to go well - why should we expect it to suit an AV business, of medium size, if you will. Similarly for the other examples quoted.

    B&O has found it necessary to move some production to the Czech Republic and to manufacture some entry level product in China in order to control it's manufacturing costs and hence it's profitiability. They obviously feel it is necessary in order to stay in business and sell products at the right price (many would say some prices are still way too high) to the target customer. I and many others have no problem with this production strategy.

    Some feel the entry level are of poorer quality solely because they aren't made in Struer (with little direct evidence it would appear as the products concerns have been very well received in the market). They haven't yet explained how a Chinese assembled kit of parts should be inferior to the same parts assembled in Denmark. Their proposal is that everything sohuld be made in Struer and that somehow the increased prices would happily be swallowed by the market because they were built in Denmark, again with little evidence other than quoting products from different size companies in different markets and assuming their results are directly applicable here.

    In any case, all of the above is academic - B&O have made the move, it's success or otherwise will become apparent over the next year or two. It may lose a few customers along the way but if it manages to recruit a whole new demographic to the brand, hopefully with aspirations, it will be considered a great success.

    Generally speaking, you aren't learning much if your lips are moving.

  • 01-29-2012 11:41 AM In reply to

    Re: Bang and Olufsen Outsourced

    Puncher:
    I've seen some truly horrific diamond encrusted pens and watches that had cost 10's of thousands of pounds - in all honesty I couldn't say that any I've met had a fine eye for understated style.

    Reminds me of the old joke about two Russian businessmen meeting on the street...

    - Do you like this new $500 tie I just bought?

    - Fool! You could've had it for $600 in that other shop across the street!

    So, I guess that to guarantee the exclusivity of B&O products, they should lace them with Swarowski crystals and golden dragons, and add at least one zero to the price. I believe there are already outfits catering for that kind of audience, but how would that make the products any better to the rest of us, even if that was done in Denmark?

    -mika

  • 01-29-2012 1:20 PM In reply to

    • moxxey
    • Top 25 Contributor
    • Joined on 04-14-2007
    • South West, UK
    • Posts 2,360
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    Tod Daniel:

    I think you're wrong there, from what I have observed, the younger, vibrant audience are simply not interested in this brand. The only die hard BS8 fans sem to be some of the traditional B&O customers. Nasty, cheaply made piece of junk. You think young people are going to be impressed by that? No, I didn't think so!

    It's only your opinion, but I wouldn't expect the younger vibrant audience to live in Salcombe (or Bath, where I live). We're living in areas which contain a number of traditional customers and are sheltered from the rest of the UK, giving you a slightly distorted view of modern life. The traditional customer base will move on, get older and B&O do have big problems attracting people under 35. I think every B&O shop owner would agree that's an issue and an issue which will get worse.

    And the BS8 and Beolit 12 are NOT nasty cheaply made pieces of junk. Tod, seriously mate, but that sounds more spiteful than fact. No way is my BS8 nasty or junk. I'd go as far as saying that's plain ridiculous. Everyone that's seen my B&O equipment - and I have a lot - warms immediately to the BS8, irrespective of age.

  • 01-29-2012 1:24 PM In reply to

    • moxxey
    • Top 25 Contributor
    • Joined on 04-14-2007
    • South West, UK
    • Posts 2,360
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    Puncher:

    In any case, all of the above is academic - B&O have made the move, it's success or otherwise will become apparent over the next year or two. It may lose a few customers along the way but if it manages to recruit a whole new demographic to the brand, hopefully with aspirations, it will be considered a great success.

    Which I agree with completely. Based on some of the opinion (see Tod's "nasty and junk" above) from traditionalists, I'm not sure if B&O will lose out leaving them behind. Just an opinion.

  • 01-29-2012 5:40 PM In reply to

    Re: Bang and Olufsen Outsourced

    Dkatz:

     

    Jonathan – We all live in the same world hence why we should all have respect for each other and not profit off other peoples poverty with near slave labour. We as consumers all have a choice.

     

    So who are you to decide how Chinese people wish to live their lives? Would you prefer that they follow the 'US' way of life and become a race of lazy obese people? (gross generalisation, just like the one about every Chinese worker being exploited) We all live in the same world, but we all live in this world differently. We should respect how others choose to live their lives, rather than force our own way of life upon others.

    You say 'we as consumers all have a choice', yet your telling me that I shouldn't buy products made in China!

    My B&O: 2009 Catalogue and Pricelist

  • 01-30-2012 4:13 AM In reply to

    Re: Bang and Olufsen Outsourced

    There are some very rose-tinted views of the West compared to the rest of the world here.

    I just don't undertsand the hostility here amongst some to the whole importing/outsourcing/subb-brand issue.

    Perhaps being a comfortable 20/30 something on the west insulates people from how the world is for most people.  Having the time to be so familiar with bespoke lables for shoes/pens/shirts/suits/cars/ties etc etc ( maybe even the means/interest to buy them) is all well and good - but it is not how most people live - here or anywhere else.

     

    The links below are a reflection of here and now - the "developed" world, 2012, for millions of people.  Many millions. Sad

    Child poverty in the UK now :

    http://endchildpoverty.org.uk/why-end-child-poverty/key-facts

    http://www.bbc.co.uk/news/uk-16483257

    http://www.bbc.co.uk/news/uk-scotland-12540981

    Fuel poverty - http://www.bbc.co.uk/news/uk-wales-15882712

    Literacy - http://www.bbc.co.uk/news/education-11735317

    Child health - http://www.bbc.co.uk/news/uk-england-hampshire-11741262

    http://www.bbc.co.uk/news/education-15242103

     

    Mow, I apreciate that posting these on a fan-site for luxury A/V kit is a bit incongrous - and I have a housefull of "Made in Denmark", shiny aluminium Beostuff - for which I am both gratefull and aware of how lucky/fortunate I am.

    However, I feel that some people here need to look closer to home before judging how other countries structure their own society.

    The west has a history of expoitation, colonial assett-stripping and depriving its own citizens that is second to none - and it has also "sold its future" and effectively mortgaged its current lifestyle against its own childrens (possible) future income.

    Not buying an outsourced ipod-dock may, in some minds, make a statement - in my view, it is futile, misguided and as a form of "direct action" or boycott....it doesn't even scratch the surface.

     

  • 01-30-2012 4:23 PM In reply to

    • Dkatz
    • Not Ranked
      Male
    • Joined on 10-25-2007
    • San Francisco, CA, USA
    • Posts 70
    • Bronze Member

    Re: Bang and Olufsen Outsourced

    Moxxey – If it wasn't necessarily about surviving and it was more about appealing to younger audiences then they have completely changed their image to become some “hip” brand. Unfortunately, I don't think this is the right way to go about it. They are ruining their brand image. Think about what Bemtleyman said: If RR outsourced to China and built some cheap RR's to appeal to young people because they are a brand for old rich guys... Then it would completely and utterly destroy their image, it is similar for B&O, because B&O to me is like RR in many ways!

     

    In regards to your brother. I'm sure there are ways of expanding if you have the money to invest in the business you can build a bigger factory, higher more workers, it's highly possible. I know that New Zealand is a much smaller country, but in the US here we have companies that produce similar laptop bags, etc... That are made in the USA and mass produced. You also have companies like American Apparel that mass produce really cool laptop bags, and of course clothing in the US, probably exceeding your brother production in China. He could have always commissioned a company in a developed country to make it but China is closer, faster, and like you said many people won't be able to tell the difference plus it will be cheaper. However, one cannot compare cool felt laptop bags to a higher end luxury item, for example Louis Vuitton or Hermes laptop bags that are still made in France by hand or B&O stereo systems that should be made in Denmark by hand!

     

    In regards to the BS8 it's not only about the fact that it's made in China. It's about the fact that it is a lower quality product, it would be even if it was made in Denmark because it's a low end product compared to B&Os other products! It's going against their image and their other products in so many ways. It looks and feels cheap and plasticky, and even if it were marginally better if it were built in Denmark then it would still be too low end a product for B&O in my opinion.

     

    I just through in $20-50 as a range because I don't know and I don't think anyone on this forum knows how much it actually costs to build a BS8. Bang and Olufsen and many other companies that produce in China will keep the production costs hidden, knowing that if the public found out their profit margins they might feel ripped off too. The point is that the profit margin (percentage wise per unit) will be much bigger if it is made in China, even if it costs a lot less. Why is $800 cheap? Because it has the name B&O on it? For a B&O it's cheap? That doesn't make it cheap though, especially for a Chinese produced cheap looking dock that is marginally better than ones that cost ¼ the price and are probably built in the same factory by the same people and not by B&O.

     

    BTW, I completely agree with you on your point that people like TodDaniel, Bentleyman, Bayerische, Myelf and a few others will be left behind and the brand will do amazingly well economically. Who knows they might become as big and rich as Bose is one day, outsourcing all their products to China. That will be a sad day for me, and I fear that the BS8 and Beolit12 is only the beginning. In the end it's not all about economics and making 10x more profit than you were to fill your pockets and sell more, there is so much more to opening a business. There are morals, feelings, craftsmanship, and so much more I thought B&O represented. With China B&O has lost their craftsmanship, their support to their local community and workers, in those specific products and I fear they might lose it all together in the future...

     

    Puncher – It depends on the Chinese buyer. I know many many rich Chinese who do buy such cars and many European products because they are made in Europe by craftsman. A Swiss watch because it's Swiss made by craftsmen, etc... 

     

    In regards to B&O, there are companies that have even bigger turnovers and more employees that don't outsource. I think the problem here is not the size of the company but the fact that it is a public one, and therefore they also care about their shareholders, boardmembers, execs, etc... that need to get paid out good sums! If it were not a publicly traded company it might not have to satisfy all these people. On top of this if they had a different CEO he might have made a different decision, taken it a different direction. So much depends on one person or a group of boardmembers and they can often make a decision they feel is right but is not necessarily right for the company.

     

    TodDaniel – I completely agree with you. Most young people who are in college or starting off in a career will be too cheap to buy any B&O even at $800-1000 for something. They will go buy a Bose at half the cost (there are even Bose outlets in the US). Or they will go buy some cheap unit until they have the money to buy a proper high end audio system. Perhaps then they will buy and use a BL5 speakers or something similar and not some cheap plastic iPod dock. It's like if people are interested in high end audio and love B&O for it are they really going to shell out $800 for some cheap plastic iPod dock or just hook it up to a proper hifi system? And if they're too cheap to buy higher end B&O will they really buy the lower end for that much just because of the brand? Some won't but if they're that cheap or poor they will go and buy a cheaper item!

     

    Puncher – I agree that every business model is different for every company but B&Os model has changed dramatically and they have lowered their standards. I don't think it's about China's capability to produce these products as it is about the product itself. Being made in China just lowers the image of the brand even further. The fact that they are making such a cheap item, even if it was made in Struer, it would still be much much lower than any other B&Os offerings, hence B&O are lowering their standards of build and sound quality. On top of this, these units are not hand assembled as other Beosound products which are made in Struer for example! So already the quality control will be much much lower, look at the video I posted earlier of the B&O factory in Struer and see how much quality control goes into each item produced and all the checks it goes through. They do not have this capability in China because it is not their factory and it's about mass production and cheap fast labour, not hand assembled like in Struer and using much cheaper materials and components which are not produced by the B&O factory that they produce their own metals and plastics for their own products for in Struer. These are the reasons they will be of a poorer quality in China, and it is obvious to anyone that compares the unit to a Beosound 1 for example as a portable unit, or a Beosound 3200 as a desktop unit, those are luxury high end, high quality units that are hand assembled!

     

    Tournedos – That would be disgusting if B&O put Swarovski crystals on their products. I hope they don't sink that low. Do you really think that is how B&O is? Do you think they are overcharging for exclusivity? If so then why are you a B&O fan and on this forum? As I mentioned I never complained about the cost of the Struer/Czech produced products as being expensive! In fact I feel they are good value for money!

     

    Jonathan – What I am talking about is what economists term as a race to the bottom. It is a separation between rich and poor both in the developing and developed world. I discussed this previously and it has a lot to do with outsourcing. Jobs are lost in the developed world because companies outsource which creates a rising unemployment and a huge separation between rich and poor (look at what has become of Detroit after more than half the car production was outsourced to Mexico). In the developing world, an elite class control almost all the factories and make millions (along with the companies that outsource there from the developed world) off the cheap Labour. The factory owners could pay them more money and give them better working conditions and less work hours, but then they wouldn't be as rich as they are would they? The workers are forced to work in the factories because this is the system in place, there are no other jobs for them. This is why in terms of fruits, vegetables, coffee, tea, etc... in developing countries Fairtrade (a UK organisation) was invented which ensures a decent wage to the farmers and workers so that they can lead decent lives.

     

    You are right about the generalization that most Americans are obese, just like MOST workers in factories in China don't have the best working conditions. Look at my previous posts about the Soviet Union and how many in the west though life was appalling there, yet factory conditions there in similar factories were better than in China in many ways and people got more decent wages and didn't have to live in dorms with 10 other people (that was more of the gulag).

     

    When I say we all have a choice I didn't say you shouldn't buy Chinese products. Quote me on where I said that because I really don't remember saying such a thing!

     

    Folkdeejay – I am not trying to change the world with my so called Boycott. In fact if there are some traditional products from developing countries that are fair trade certified such as woven baskets from Africa, tea's from China, etc... I am usually more than happy to buy them and support those people! But when I know those people are being exploited, and on top of that people are becoming unemployed in the west thanks to outsourcing (over 10 million in the US alone in the past 15 years). Then one can really start to see where the Child Poverty and separation between rich and poor in the west comes from. The CEO's of these companies are only getting richer by laying off their workers in their own country to outsource and make 100x the profit they did before whilst everyone else doesn't get a good deal from it, and neither do consumers since they don't lower the prices at all usually after outsourcing.

     

    Just because a few hundred years ago we had such kind of labour in the west doesn't mean we should support it now. Does our own past justify supporting something like that in another country? In our present we do not have the same situation as we do in China. We are talking specifically about separation between rich and poor (however bad it is, there is much more of a middle class and it is much better than in China or other developing countries) and about something resembling the gulags in terms of labour hours and low pay (actually my great grandfather was sent to the Gulags during Stalin's rein, he died of consumption there). Something that just doesn't happen in the west where wages are much higher, working conditions are much better, and labour unions are much stronger. How can you say to look at how bad our society lives when it is a much lower percentage than theirs that live badly? China has some of the highest poverty rates in the world! Worse than many developing countries in Africa! In fact many Chinese are even going to Africa to start a new life!

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