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ARCHIVED FORUM -- April 2007 to March 2012
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This is the first Archived Forum which was active between 17th April 2007 and 1st March February 2012

 

Latest post 02-15-2011 3:47 PM by linder. 16 replies.
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  • 02-11-2011 6:50 PM

    • Claus
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    • Joined on 11-05-2009
    • Copenhagen
    • Posts 41
    • Gold Member

    Which path to choose for Bang and Olufsen (from www.business.dk)

    I've (tried to) translate an article from a Danish business web site - www.business.dk - about the future strategy for B&O.
    Enjoy - Claus

    Is B & O’s road to future success through the national mainstream Audio-Video-market or Chinese luxury consumers? The experts are divided on the issue, which is crucial for B&O's future.

    Make a clear choice!
     That is the recommendation for the 36 year old Tue Mantoni, who in a few weeks will be on top of Bang & Olufsen as the company's CEO. He has not told the public in which direction he wants to drag B & O.

    The answer is called for by experts - who are themselves deeply divided about who the 85-year-old electronics company should focus on. Improve the B & O as super luxury brand and go exclusively for the Asia market, recommend one. Another will drag B & O down from the luxury pedestal and get products into the national mainstream dealers.

    Purchasing power in Asia
    "If I need to put a heading on the agenda for the new director, it will be to take Asia seriously and make it a home market for B & O. There is a very large purchasing power there" says Martin Roll, an international brand consultant.

    The global agenda tilts to the east, and already in about five to ten years, it results in Asia, which will be crucial for the success for global brands.

    "The global world order has changed and therefore it is stupid to have such great fear of contact for Asian markets as the B & O currently have," says Martin Roll.

    "B & O must still be expensive", he says. "Maybe even very expensive".

    "In Denmark we have a somewhat special relationship with B & O - and do not believe that it must be too expensive. But if you look at the global market – you'll find that lifestyle products can hardly be expensive enough. This is true in Asia and in many other markets where there are luxury consumers"says Roll.

    From pedestal to mainstream dealers
    B & O should go a completely different way, says Bruno Christensen, who has advised many major players in retail trade. B & O's sale will not grow enough if the Struer based company focused entirely on luxury consumers, he warns.

    "B & O's road to growth is that it climbs down from the pedestal" he says.

    Consumers, according to Bruno Christensen, changed behaviour after the crisis, and they are now not so much into how products are sold. Therefore B & O should give up many of their expensive flagship stores and instead move into mainstream stores, he believes.

    "Consumers do not distinguish between how and where products are sold anymore. Now consumes focus on the product itself" says Bruno Christensen.

    He believes, however, like Martin Roll, there are still consumers out in the world, who would only buy products in exclusive surroundings.

    "Obviously, if you're in a market where the customer base is large enough for luxury, for example, in Chinese and Russian cities and in New York, then it makes sense to have a few flagship stores, but it is not here that you get the large volume that can raise the B & O's turnover".

    Link: http://www.business.dk/detail/eksperter-dybt-uenige-om-bos-fremtid (in Danish with photo of the new CEO)


    - Claus
    Beolab 5000 (x2), Beomaster 2400-2 & 5000, Beogram 2400/MMC20E, Beovox S30, S45 & S75, M75 - and growing...

  • 02-11-2011 10:26 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    In my opinion the path is clearer than it looks. Obviously B&O have to conquer the younger crowd in order to survive. Based on the successful BS8 and the new CEO profile and age that is exactly what and where they are aiming. It seems kind of strange decision the new CEO but it is not, in my opinion they have three goals:

    1) Short term: survival and cashflow building with some new successful and probably more affordable product ala BS8

    2) Mid and Long term: conquer the younger crowed with a more updated line of products and coolness.

    3) Technically B&O was, is and will be awesome but very slow and their marketing is not very good. I think the mid-longer term goal of the new CEO is strengthen both. 

    In which segment they will focus is harder to say but obviously B&O is not a popular or "affordable" brand and I don't see them following that path, probably just a few products. I think this issue is the harder to guess and we will need to wait for the new products in order to get some clues.

  • 02-11-2011 11:34 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    I agree that B&O needs to do better whatever that might be.  I also agree they need to appeal to the younger crowd.  However the simple answer is we need to get beyond the recession and people need to spend some money on new B&O products.  The new CEO needs to figure out how to get more customers.  He need to figure out how to sell more products not only in China but also in places like India and Brazil.  I admit Brazil is a problem because of high tariffs but maybe the EU can do something about that.

    Are people ready for Bang and Olufsen to become like Apple?  All of their products are manufactured in China.  Apple is essentially a company that does engineering, software, and industrial design. Apple is also a retail business with the largest music store in the world.  They make great products but not in their own factories.  I really don't have a problem with that but I thought I would mention the possibility of that type of change.  B&O would certainly be able to implement new technologies more quickly if it didn't do manufacturing.

     

    Beosound 5 BL9 BC2 BL8000 Beovision 7 BL6002  BL11 

     

  • 02-12-2011 2:29 AM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    linder:

    Are people ready for Bang and Olufsen to become like Apple?  All of their products are manufactured in China.  Apple is essentially a company that does engineering, software, and industrial design. Apple is also a retail business with the largest music store in the world.  They make great products but not in their own factories.  I really don't have a problem with that but I thought I would mention the possibility of that type of change.  B&O would certainly be able to implement new technologies more quickly if it didn't do manufacturing.

    Personally I have no problem with production outside of Denmark. A big question for me would be: Can you outsource the manufacturing of aluminium parts. I think the surface treatment of aluminium is one of B&O core competences; the company even supplies aluminium parts to BMW and other carmanufacturers. It would be a shame if this quality got lost.

    Beoworld's twenty-eighth ninth prize winner and fifty-first second prize winner. Best £30 I've ever spent!

  • 02-12-2011 2:43 AM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    beocool:

    linder:

    Are people ready for Bang and Olufsen to become like Apple?  All of their products are manufactured in China.  Apple is essentially a company that does engineering, software, and industrial design. Apple is also a retail business with the largest music store in the world.  They make great products but not in their own factories.  I really don't have a problem with that but I thought I would mention the possibility of that type of change.  B&O would certainly be able to implement new technologies more quickly if it didn't do manufacturing.

    Personally I have no problem with production outside of Denmark. A big question for me would be: Can you outsource the manufacturing of aluminium parts. I think the surface treatment of aluminium is one of B&O core competences; the company even supplies aluminium parts to BMW and other carmanufacturers. It would be a shame if this quality got lost.

    There are many possibilities.  The aluminum process and manufacturing could be sold to another company with a large scale of efficiency which would reduce cost for everyone including BMW.

    I think the point is nothing is sacred in the development of the plan which will cut cost, improve efficiencies, and improve profit.

    I am hoping the present plan is sufficient for product development.  All they would have to do is cut costs and wait for the end of the recession.

     

    Beosound 5 BL9 BC2 BL8000 Beovision 7 BL6002  BL11 

     

  • 02-12-2011 4:20 AM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    linder:

    beocool:

    linder:

    Are people ready for Bang and Olufsen to become like Apple?  All of their products are manufactured in China.  Apple is essentially a company that does engineering, software, and industrial design. Apple is also a retail business with the largest music store in the world.  They make great products but not in their own factories.  I really don't have a problem with that but I thought I would mention the possibility of that type of change.  B&O would certainly be able to implement new technologies more quickly if it didn't do manufacturing.

    Personally I have no problem with production outside of Denmark. A big question for me would be: Can you outsource the manufacturing of aluminium parts. I think the surface treatment of aluminium is one of B&O core competences; the company even supplies aluminium parts to BMW and other carmanufacturers. It would be a shame if this quality got lost.

    There are many possibilities.  The aluminum process and manufacturing could be sold to another company with a large scale of efficiency which would reduce cost for everyone including BMW.

    I think the point is nothing is sacred in the development of the plan which will cut cost, improve efficiencies, and improve profit.

    I am hoping the present plan is sufficient for product development.  All they would have to do is cut costs and wait for the end of the recession.

    I am not convinced that B&O should outsource one of their core competences. Outsourcing everything else is another matter.

    Beoworld's twenty-eighth ninth prize winner and fifty-first second prize winner. Best £30 I've ever spent!

  • 02-12-2011 9:19 AM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    Do the young not demand cutting edge technology?

    Is B & O capable of providing this?

    For example,take the Beosound 8.Why does it not incorporate Airplay?

    B & W have already completely redesigned the Zeppelin to incorporate it,provide superior sound quality to the Mark 1 version,and at a cheaper price.

    As for Asia---to concentrate on it to the detriment of existing markets could well be a recipe for disaster,if potential buyers there decide that design,and build quality without technical innovation,and possible incompatability with existing equipment,is insufficient.

    What then for B & O?

     

  • 02-14-2011 5:10 PM In reply to

    • StUrrock
    • Top 500 Contributor
    • Joined on 02-04-2008
    • Cambridgeshire
    • Posts 219
    • Bronze Member

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    IMHO Their franchise model for stores cannot continue to survive in its current form.

  • 02-14-2011 8:16 PM In reply to

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

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    StUrrock:

    IMHO Their franchise model for stores cannot continue to survive in its current form.

    Say more.

     

  • 02-14-2011 8:38 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    StUrrock:

    IMHO Their franchise model for stores cannot continue to survive in its current form.

    With the current mix of products this is as close to absolute truth as you can get. 

    There is scarcely anything in this world that some man cannot make a little worse and sell a little more cheaply. The person who buys on price alone is this man's lawful prey. - John Ruskin

  • 02-15-2011 8:57 AM In reply to

    • akoro
    • Top 500 Contributor
    • Joined on 08-07-2008
    • Espoo, Finland
    • Posts 88
    • Gold Member

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    It seems that B&O has got in touch with Alberto Torres (who just left Nokia, Meego and Vertu) and asked him to join Board of directors http://www.bang-olufsen.com/Userfiles/File/Investors/Extraordinary_GM/PDF1UK.pdf .

     

    Alberto has been in charge of Meego and he must have really good connections to Intel. This sounds like good news to me.

  • 02-15-2011 12:07 PM In reply to

    • StUrrock
    • Top 500 Contributor
    • Joined on 02-04-2008
    • Cambridgeshire
    • Posts 219
    • Bronze Member

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    At this present time many previously successful Bang & Olufsen showrooms cannot survive selling B&O alone.

    Indeed B&O are telling their dealers to become solution centres.

    In our case without the other third party products, we would just not survive!

    For us the B&O down turn has been a God send, it has forced us to widen our appeal, by adding a carefully selected collection of additional products and services. This has stimulated our minds and increased our bank balance!

    Some 'traditional' B&O retailers have found this a big challenge!!!!!!!

    Don't get me wrong there are still some brilliant products in our range, but we have too many also rans.

     

  • 02-15-2011 2:19 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    TerryM:
    Do the young not demand cutting edge technology?

    For example,take the Beosound 8.Why does it not incorporate Airplay?

    Interesting question.

    Do you mean technology as in transmitting compressed music over a bluetooth type frequency band or

    technology as in hifi sound fidelity as heard in the Beolab 5?

    One could certainly argue that a lot of todays "technology" is depreciating the listening experience in favour of convienience and mobility.

    Which one is good, which one is wrong? are both, are neither?

     

    10

  • 02-15-2011 3:14 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    I don't think there is much of an argument about today's technology depreciating the listening experience.  A few years ago I was excited about the prospect of buying music over the internet as in iTunes and Amazon downloads  Buying music this way is a good idea.  One can listen to a preview of the music and get almost instant delivery.  Also there is no packaging or shipping charges.  However nothing has improved much. iTunes is still 256 AAC and does not sound as good as a CD.  I have a Beosound 5 and only rip CDs in the lossless format to get the CD quality sound  Who would spend $7000 for a player and $23000 for Beolab 5s and expect nothing but the best fidelity.  Yes I continue to buy CDs.  CDs are also the ultimate backup for hard disk failure which does happen.

    I am hoping the latest technology means portable devices such as an iPods or iPhones being used to play music on Beosound 8 like players.  This would also include Airplay.  I have used Airplay to show photos on my TV using an Apple TV which is convenient.  As an Apple user I am still waiting for Airprint!

    Everyone wants cutting edge technology.  However usually only large electronics manufacturers can do this.  If you want Bang and Olufsen to take risks in newer technologies in a shorter time, expect it to not be the company we know today.

    Beosound 5 BL9 BC2 BL8000 Beovision 7 BL6002  BL11 

     

  • 02-15-2011 3:35 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    linder:
     

    Yes I continue to buy CDs.  CDs are also the ultimate backup for hard disk failure which does happen.

    I also continue to buy CD's, but a bunch (Most) of the music I want to buy isn't available at shops... And the CD collection at physical stores is shrinking, unless one makes due with Lady Gaga. This isn't my or anyones fault per se, it's simply the future. Downloads are taking over, across the board. 

    To be fair, excellent and simple HD backups are available, say Apples Time machine. Hard drive failure panics and fears should be a thing of the past. Keep your stuff backed up, and you are all good. Yes -  thumbs up

    CD's get easily damaged too. I pamper mine, still I manage to get the occasional scratch. 

    -Andreas

     

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

     

     

     

  • 02-15-2011 3:40 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    StUrrock:

    At this present time many previously successful Bang & Olufsen showrooms cannot survive selling B&O alone.

    Indeed B&O are telling their dealers to become solution centres.

    In our case without the other third party products, we would just not survive!

    For us the B&O down turn has been a God send, it has forced us to widen our appeal, by adding a carefully selected collection of additional products and services. This has stimulated our minds and increased our bank balance!

    Some 'traditional' B&O retailers have found this a big challenge!!!!!!!

    Don't get me wrong there are still some brilliant products in our range, but we have too many also rans.

    Symmes,

     

    This.

     

    -Trip

    There is scarcely anything in this world that some man cannot make a little worse and sell a little more cheaply. The person who buys on price alone is this man's lawful prey. - John Ruskin

  • 02-15-2011 3:47 PM In reply to

    Re: Which path to choose for Bang and Olufsen (from www.business.dk)

    bayerische:

    linder:
     

    Yes I continue to buy CDs.  CDs are also the ultimate backup for hard disk failure which does happen.

    I also continue to buy CD's, but a bunch (Most) of the music I want to buy isn't available at shops... And the CD collection at physical stores is shrinking, unless one makes due with Lady Gaga. This isn't my or anyones fault per se, it's simply the future. Downloads are taking over, across the board. 

    To be fair, excellent and simple HD backups are available, say Apples Time machine. Hard drive failure panics and fears should be a thing of the past. Keep your stuff backed up, and you are all good. Yes -  thumbs up

    CD's get easily damaged too. I pamper mine, still I manage to get the occasional scratch. 

    All is very true.  I have 2 Time Machines...1 TB and 2TB.  On iTunes, the backup is really easy.  I still have to figure out how I want to backup the Beomaster 5.  I buy all of my CDs on Amazon on the US site but occasionally on the British and French Amazon sites.  I have purchased a CD on the Japan Amazon site once which was a real challenge.

    Lady Gaga is also on vinyl for the purist! Ha!

     

    Beosound 5 BL9 BC2 BL8000 Beovision 7 BL6002  BL11 

     

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