1. Status as the world's elite piano manufacturer Known for its traditionally made Grand pianos ,the keystone of the Steinway strategy was and remains Over 160 YEARS of masterful craftsmanship 2. to build the best piano possible Henry E. Steinway (1797 - 1871) Steinway and Sons was established in New York City in 1853 by Henry Engelhard Steinway, an immigrant from Germany. 3. Introduced the cross-stringing technique in a piano with a cast iron frame, an innovation that is now universal in all grand pianos Each Steinway grand piano is a unique masterpiece produced from the best materials by the hands of craftsmen. The Steinway tradition Excelled because of it technical brilliance 4. Its status as the world's elite piano manufacturer has been secured in part because of the success of marketing strategies such as The Steinway Artist program, which was invented in the 1870s by William Steinway 5. After 120 years of being a closely held family operation, it was decided Steinway and Sons could no longer survive in this manner. The company was sold to the CBS Musical Instruments Division in 1972 for $21 million . The primary reasoning for the sale was associated with finances which hadnt changed in the following few years 6. The CBS Years 1972-1985 CBS wanted to increase revenue and decrease manufacturing costs by increasing production. This damaged the reputation of Steinway and Sons Over the next 10 years, CBS appointed a series of presidents , each of whom ran into problems of one sort or another. Critics and buyers began to challenge the quality of Steinway and Sons pianos. 7. As a result, In November of 1984, CBS announced the sale of Steinway and Sons for $50 million to John and Robert Birmingham The company now became refocused on quality and returned to what had made them so successful 8. The Birmingham years 9. Despite these positive changes by , the running of Steinway and Sons was once again constrained by limited financial resources. 10. The company was again sold on April 18, 1995 to Dana Messina and Kyle Kirkland, owners of the Selmer Company for $100 million. Steinway and Sons merged with the Selmer Company formed the musical conglomerate Steinway Musical Instruments Inc. 1995-Present Selmer was a leading manufacturer of musical band instruments 11. Problem statement Steinway & Sons faced a declining piano market and increased competition from Asia piano manufacturers. 12. Messina and Kirkland bought a Legend Could these two young investment bankers get this one great company back in tune? 13. CHALLENGES How should melissa and kirkland go about the Boston range of pianos? Should Steinway continue its high end niche strategy or market its pianos more aggressively? How to further enhance or increase revenues? What roles Messina and Kirk should play? 14. Lets see the situation first 15. Segmentation 16. The piano industry Over the years, piano sales have increasingly dropped from as high as 223,000 units in the 1980s to nearly 100,000 in 1994 the growing popularity of the electronic keyboard. 17. Initially, the United States and Western Europe were the main markets in the piano industry. By the 1990s, newer markets were opening up in countries such as Japan, South Korea, and China Emergence of several Asian manufactu rers who, by the 1990s combined for 75% of global sales 18. SWOT ANALYSIS 19. STRENGHTS Established brand reputation of quality and durability The Steinway Concert and Artist program has around 850 artists whom choose the Steinway and Sons piano Traditional handicraft production techniques WEAKNESS Saturated market Major Competitor is their own used pianos The durability and quality of their products limits the concept of repeat buyers OPPORTUNITIES Use name to push other music products Lower prices and cut in on competitors Have new famous composers represent Steinway Establish a larger customer base in Asia to increase market share THREATS Technology, rise of the electric piano There are levels of inexperience of the current younger owners/CEOs Expansion of Asian manufacturers 20. Solutions 21. Since the introduction of the Boston piano in 1992 the sales increased from 2.7 million in 1992 to 16.7 million in 1994 The Boston piano which is produced by Kawai in Japan enables Steinway to sell a mid priced piano with through the Steinway name. Importantly, the Boston piano line was designed by Steinway & Sons 22. Offering limited edition Boston pianos in the mid-market price range can help Steinway retain some of the exclusivity it boasts of in the high end segment. Ensure high quality and restrict the exclusive no of dealers Steinway has. Advertise the brand excessively ensuring the customers its high quality. Introduce this range of mid- prices pianos in Asian market to make it available to those who cant afford to buy a Grand What can be done? 23. Effective Advertising They need to take advantage of the fact that fine artists such as Duke Ellington, Vladimir Horowitz, Cole Porter, Arthur Rubinstein and many more use their products. When you connect a superior product with a well known name the product is going to sell. 24. There are also other instruments that have high quality standards and which have high sales and growth rates, e.g. guitars. These may be areas which offer new opportunities for the enlarged firm. Sell guitars under Steinway brand name ensuring high quality standards and high initial advertising Expand the product line 25. Role of Messina and Kirkland Have financial expertise In 1993, They had put in $25,000 and came away with 23% of the Selmer company which shows their ability to structure deals without much money. As Messina and Kirkland lack experience in the piano industry, they should hire a professional team from the piano industry Also, they have a successful track record with Selmer 26. As a result of their decline in sales due to the rapid change of the piano industry, technology, expansion of new markets and foreign competitors, Steinway and Sons will need to make some drastic changes to utilize these industry trends 27. Steinway and Sons need to take steps towards: Using technology to enhance their products while maintaining their traditional brand reputation. By Introducing a mid-priced line, reach more of the markets demand Targeting the emerging Asian market In order to restore their historical success while implementing changes and preparing for growth, Steinway and Sons will have to use this declination of the piano industry to their advantage. 28. Steinway & Sons Intro The Steinway Tradition Steinway through the years Problem Statement Challenges Situation Analysis SWOT Analysis Recommended Solution Conclusion