Steinway & Sons : Buying a Legend
-
Upload
114iiminternship -
Category
Marketing
-
view
58 -
download
0
Transcript of Steinway & Sons : Buying a Legend
![Page 1: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/1.jpg)
BUYING A LEGEND
![Page 2: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/2.jpg)
In April 1995, Steinway & Sons was bought by
Dana Messina and Kyle Kirklamd for
$100 MILLION !!
![Page 3: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/3.jpg)
Who
are
Steinway & Sons
![Page 4: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/4.jpg)
Leader in the market for high-quality grand pianos
Established in New York City in 1853 by Henry Engelhard Steinway
Had reputation of building best piano in the world for 140 years
![Page 5: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/5.jpg)
What were
the types of
pianos
produced by
them
![Page 6: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/6.jpg)
Grand Piano
Vertical Piano
![Page 7: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/7.jpg)
FAVOURABLE CONDITIONS
![Page 8: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/8.jpg)
In 1994, about 500 concert pianos were
manufactured worldwide with 350 Steinway
pianos bought and sold
![Page 9: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/9.jpg)
![Page 10: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/10.jpg)
![Page 11: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/11.jpg)
![Page 12: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/12.jpg)
UNFAVOURABLE
CONDITIONS
![Page 13: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/13.jpg)
The company has changed hands several times and product
quality has been a problem.
![Page 14: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/14.jpg)
The piano Industry saw a down turn in current years with global sales falling by 40%
![Page 15: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/15.jpg)
Despite these
Steinway showed
productiveness in
the first 3 months
itself. The gross
profit of the two
companies
combined increased
from 31.6% to 33%
![Page 16: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/16.jpg)
HOW CAN STEINWAY RESTORE ITS POSITION OF BEST PIANO PRODUCERS IN THE MARKET
AGAIN
![Page 17: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/17.jpg)
1. Manufacturing
![Page 18: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/18.jpg)
• Steinway decided to build low priced pianos of
high and consistent quality
• Assembled using skilled labour without use of
assembly line technique which resulted in less
production,less profit
![Page 19: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/19.jpg)
2. Marketing
![Page 20: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/20.jpg)
Steinway had Concertand Artist Program in which an artist found eligible by the company was allowed to use the
concert piano for all performances
![Page 21: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/21.jpg)
Yamaha loaned pianos to music institues and
conservatoried to expose budding artist to their band
![Page 22: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/22.jpg)
3. Used Piano Market
![Page 23: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/23.jpg)
Pianos of many brands last for more than
40 years.
Certain strategies were used to enhance
the market of these used pianos
![Page 24: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/24.jpg)
1 New Piano 10 Old Pianos
![Page 25: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/25.jpg)
4. Competitions
![Page 26: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/26.jpg)
The Competitors are…
• Yamaha
• Baldwin
• Kawai
• Faziloi
![Page 27: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/27.jpg)
Largest producer of
piano in the world.
Produced limited number
of concert grand piano
with traditional craft
method.
Duplicated or used
better technology than
Steinway
![Page 28: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/28.jpg)
By 1996,sole
remaining large
scale producer of
piano in USA
Produced wide range
of pianos ranging
from inexpensive
one to hand crafted
concert grand
![Page 29: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/29.jpg)
Manufactured
pianos on highly
automated
assembly line
![Page 30: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/30.jpg)
Focused on small
volume-top quality
grand pianos
Recognised as
being among the
highest quality in
the industry
![Page 31: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/31.jpg)
UNIT SALES OF PIANO PRODUCERS IN 1994
• Yamaha – 175,000
• Baldwin – 20,000
• Kawaii – 100,000
• Fazioli – 60 grand pianos
![Page 32: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/32.jpg)
![Page 33: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/33.jpg)
STRENGTHS
• Brand name
• Highest Quality
• Traditional
handcraft
production
techniques
![Page 34: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/34.jpg)
WEAKNESS
• Too much cost in
consuming
• The dealer
network is reduced
during Birmingham
• Lack of diversity
![Page 35: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/35.jpg)
Financial Capabilities
• Owners has
changed many times
• Running in loss for
two consecutive
years (1992 & 1993)
• Seasonal downturn
in demand
![Page 36: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/36.jpg)
![Page 37: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/37.jpg)
1. Maintain high quality niche market
2. Should introduce new lower-priced piano to Asian
market as a flanker to compete against low-price
competitors
3. Should make good use of ‘THE CROWN JEWEL
COLLECTION’ as it represented 30% of unit sales in
1995
4. They should divide their roles into marketing and
finance section
![Page 38: Steinway & Sons : Buying a Legend](https://reader035.fdocuments.net/reader035/viewer/2022081511/55c9c92dbb61eb0e498b4630/html5/thumbnails/38.jpg)
Created by Aburvaa Ramesh, SVCE ,
during an internship By Prof. Sameer Mathur, IIM
Lucknow.www.IIMInternship.com