Strategic Management: Bang & Olufsen Case Study

This report discusses the concept of strategic management and analyzes the strategies, external factors, and internal analysis of Bang & Olufsen, a Danish high-end consumer electronics company.

Strategic
management

INTRODUCTION
The concept of strategic management is defined as the manage all organisational resource
in order to achieve determined goals and objectives. It involves all activities that are related to
the setting overall objectives, measure and analyse various aspects of competitive environment,
analyse internal as well as external organisational factors. It is about evaluating business
strategies and ensure that these strategies are rolls out across the organisation to achieve goals. In
this report the chosen organisation is Bang & Olufsen which is founded in the year of 1925 by
the Peter Bang and Svend Olufsen. Headquarter of organisation is situated in the Struer,
Denmark. The organisation is basically Danish high and consumers electronics company that
manufactures audio products such as televisions and telephones. There are 915 employees are
working in the organisation. Respective organisation focus on the particular market of segment
and ensure better positioning by providing better product and services in it. There are various
competitors such as Inkyo, Harman and TCL capital. In this report various strategies level
strategies are being discussed. There are pestle analysis, porters five force model, industry life
cycle and Swot analysis of respective organisation is being covered.
Strategies concept level:
Bang & Olufsen use business as well as corporate level strategies that affect the decision
making and activities of organisation. These strategies are depends upon the level and structure
of company. Business and corporate level strategies of Bang & Olufsen discussed below:
Business level strategies: Business unit level strategies are generally used in the various
areas and department of business. Bang & Olufsen take all business decisions according to the
type and structure of organisation(Andersen, and Andersson, 2017). It develops various
strategies for each unit of business, so growth and improvements can be measured. In the
business strategies, various strategies are built that differentiated the organisation from its
competitors and develop objectives and goals that support respective business to achieve overall
corporate goals.
Corporate level strategies: This the broad level of strategies of a business. These
strategies define the main objective of organisation for which it comes in existence. It is being
necessary for the organisation that is conducting its business in multiple lines. These strategies
affect the decision making process of Bang & Olufsen in effective manner (Anlesinya, Dartey-

Baah, and Amponsah-Tawiah,2019). In corporate level strategies whole organisational missions
and visions are formulated that should be quite different from the respective competitors. All
objectives are decided at corporate level and decisions are taken according situations.
External factors:
External factors the those factors that are exist outside the boundaries of organisation by
affect it in various manner. Some models to analyse external factors are following:
PESTLE analyse:
PESTLE analysis is referred as the framework to analyse and monitor macro
environmental factors that affect the organisational performance. It becomes important in the
situation of starting up the business and enter in to foreign market. All the factors of the model is
carefully examined and strategies are developed to overcome the all negative effects of these
factors on the Bang & Olufsen. Factors are discussed below:
Political factor: Bang & Olufsen has expanded its services to the various countries, so
political factors affect the business in various manner(Bell, Rochford, 2020). It depends upon
that who much government intervene in the respective economy and the in the specific industry.
It includes various government policies, rules, regulations, political stability or instability,
foreign trade policies, labour as well as employment laws and restrictions in trades. All these
factors and laws are varies according the country and also affect the working of respective
organisation, so these are properly examined.
Economic factors: Economic factors are determined the economic performance in
specific time period. It includes economic growth, inflation rates, exchange rates and
unemployment rates. These factors have direct as well as indirect and long term impact upon the
Bang & Olufsen. All the decisions are taken according the economic conditions(Boon, 2018).
The respective organisation have to fallow all rules and laws regarding the employment and
company to ensure the smooth running of the organisation.
Social factors: Social factors includes the demographic characteristics, norms and values
in which the organisation operates its business. There are various trends like distribution, safety
intensity, lifestyle, attitudes and several cultural barriers that have impact upon the Bang &
Olufsen functioning(West,2018). In the process of targeting specific customers the respective
organisation remind these factors to ensure the success of business.

Technological factors: Now these days there are various technological advancements
are take place that affect the operations of Bang & Olufsen and its market positioning. It includes
innovations, automations, technological changes and various research and development
activities(Boone, 2019). All these factors affects the decision making process of respective
organisation regarding it should enter in the industry or not and launching the new product in the
market. The organisation have enhance its technologies to survive in the competitive
environment.
Environmental factors: There are various environmental factors that affect Bang &
Olufsen working. The importance of environmental factors are increased because the scarcity of
raw materials and effectiveness of target population. It includes various factors such as weather,
climate and changes in it and environmental offsets. Organisation have aware about all
conditions of environment and analyse impacts of change in climate conditions in the business
activities(Bozhanova, and Kononova, 2018). It includes corporate social responsibilities in their
actions to ensure the sustainability.
Legal factors: To conduct business activities in a specific country, the organisation have
to follow legal laws that are being passed by the government and other parties. These factors are
customers protection law, employment law, patent as well as copyright laws and health and
safety laws. Bang & Olufsen have to know about the laws and apply them in the organisation in
order to become successful. The respective organisation conduct its business at global level so it
is important to follow them strictly.
Porter's five forces model:
Porter's five force of model includes all five competitive factors that determines all
strengths as well as weaknesses of specific organisation. It is basically a effective tool to
understand the factors of competitiveness of specific business and help in identifying potential
capabilities of it. Five forces of Bang & Olufsen discussed below:
Bargaining power of supplier: Power of suppliers is related that how easily the
organisation affect the prices of inputs(Broman, and Robèrt, 2017). It is being depends upon the
number of suppliers and uniqueness of imputes and the switching cost of the company. There are
various suppliers are available for the Bang & Olufsen that are able to provide inputs at

reasonable price and company have the power to change its suppliers with having low switching
cost, so there are low bargaining power exist for the industry.
Threat of substitutes: It is the biggest threat for the company that the customers have
various options that they can switch the company and buy the similar product firm the other one.
If there is no substitute is available in the market then the organisation is in the power to charge
more price for their product and vis-a-visa(Brunetta, Capo, Vicentini, 2017). There are various
organisations such as Hitachi, Toshiba and Motorola that provides same products in the
respective market, so there are high degree of threat is being faced by the Bang & Olufsen.
bargaining power of buyers: Bargaining power of buyers is consider as customers or
buyers have to power to drag the price of product at their level. It depends upon the number of
buyers that the company have and how much amount the company have to spent to find the new
customers for their products and services. Bang & Olufsen have the strong and small customers
base then each customer have to power to negotiate the respective price of products.
Threat of entrants: The organisation is also get affected by the new entrants in the
market. If there are low level of barriers are exist and few rules and regulations are fulfilled to
enter in the respective industry. Bang & Olufsen imposed various regulations for the other
organisation to enter in the market and provide similar products and services(Greer,2021). So it
becomes challenging for them to enter and gain high margin profits.
Rivalry in side the firm: It refers as the competitors existence within the industry that
provides the similar products ans services in the market. When a industry contains large number
of competitors then the companies have the low power in the market. Suppliers as well as buyers
also become the competition if they offers better deals at low prices. Bang & Olufsen face
competition within the industry then it can charge high price on products and achieve high
profitability.
Industry life cycle:
industry life cycle is referred as the process that starts from the introduction of the
respective product and continue to the declining stage of that product(Katsero, 2019). It is a
continuous process that explains all stages of industry generation. There are various stages of
industry life cycle is being discussed in context of Bang & Olufsen:

Introduction stage: It is the first or starting phase that includes marketing activities for
the development of the new product. In the introduction phase Bang & Olufsen develops market
awareness about its product and make customers sensible of that. Various advertisement and
promotional activities are being done by the organisation to spread information for the new
product.
Growth stage: In this stage customers are being award about the product of Bang &
Olufsen and the market demand is growing rapidly. So the main objective of the organisation is
to spend the market share and conduct research and development programmes instead of
focusing on the more profit.
Maturity stage: In this stage the demand of product is on the peak, so Bang & Olufsen
focus is upon the gain high level profit by satisfying customers with their products and services.
There are highly competition is exist at maturity(Katsero, 2019)(Kitsios, and Kamariotou, 2017).
Organisation less attention on the differentiation of product, price competition become more
important for it to survive in the highly competitive market.
Declining stage: in this stage the growth of Bang & Olufsen is declining. Respective
company creates various innovations in products as well as launch new products to attract
customers. Various promotional activities and technological advancements are being done by it.
Internal analysis:
SWOT analysis:
SWOT analysis is referred as a technique that define all factors such as strengths,
weaknesses, opportunities and threats that affect the organisation in positive as well as negative
manner. Bang & Olufsen evaluate all these factors and develop strategies accordingly. Swot
analysis of organisation are discussed below:
Strengths: Strengths are the internal capacities and capabilities of an organisation. Bang
& Olufsen strengths are its various resources and capabilities that facilitate the organisation to
stay in the competitive environment(Li, and Biloshchytska, 2019). It has experienced and
effective human resources that are able to produce products that satisfy the needs and demands
of respective customers. The organisation current technological factors facilitate the production
process.

Weaknesses: Weaknesses are the internal insufficiencies of Bang & Olufsen that affect
the productivity as well as profitability (SWOT analysis,2021). Organisation focuses on the
people, system and respective procedures and improve weak areas of these sectors. High level
debts, insufficient supply chain and lack of resources are the some weakness of respective
organisation.
Opportunities: Opportunities are the chances for the Bang & Olufsen that comes from
the outside of the organisation(Mullakhmetov, 2018). These are technological advancements
enhance the market share in which it serving products. Increasing customers demands and new
products market are facilitate organisation to remain competitive in the market.
Threats: Threats are some negative affects that exist outside the organisation. Various
competitors are also providing same products with market that creates the big threat for the
Bang & Olufsen(Protalinskiy, 2018). The organisation faces threats such as raising the price of
raw materials, labour supplies and raising the competition level.
CONCLUSION
As per the report, it can be concluded that strategic management is about manage whole
organisational resources in effective manner and ensure that these resources are efficiently utilize
in order to achieve defined goals and objectives. External as well as internal both environmental
factors affects the respective organisation in positive as well as negative manner. To analyse the
external factors PESTLE model, porter's five force model and industry life cycle is used by the
organisation on the other hand SWOT analysis is described all strengths, weakness, opportunities
and threats of organisation. Organisation evaluate these factors and develop required strategies to
sustain in the changing environment.

REFERENCES
Books and Journals
Andersen, T. J. and Andersson, U., 2017. Multinational corporate strategy-making: Integrating
international business and strategic management. In The Responsive Global
Organization. Emerald Publishing Limited.
Anlesinya, A., Dartey-Baah, K. and Amponsah-Tawiah, K., 2019. Strategic talent management
scholarship: a review of current foci and future directions. Industrial and Commercial
Training.
Bell, G. G. and Rochford, L., 2020. Identifying and Understanding the Core Concepts in
Strategic Management. Journal of Applied Business & Economics. 22(11).
Boon, C., and et.al., 2018. Integrating strategic human capital and strategic human resource
management. The International Journal of Human Resource Management. 29(1). pp.34-
67.
Boone, C., and et. al., 2019. Top management team nationality diversity, corporate
entrepreneurship, and innovation in multinational firms. Strategic management
journal. 40(2). pp.277-302.
Bozhanova, V. and Kononova, O., 2018. Strategic approach to the management of modern
construction enterprises. European Journal of Humanities and Social Sciences. (2),
pp.81-90.
Broman, G. I. and Robèrt, K. H., 2017. A framework for strategic sustainable
development. Journal of Cleaner Production. 140. pp.17-31.
Brunetta, F., Capo, F. and Vicentini, F., 2017. Institutional approach to strategic management.
In Global business strategies in crisis (pp. 3-14). Springer, Cham.
Greer, C. R., 2021. Strategic human resource management. Pearson Custom Publishing.
Katsero, O., and et. al., 2019. Company innovative development based on the strategic
management concept. Academy of Strategic Management Journal. 18. pp.1-5.
Katsero, O., and et. al., 2019. Company innovative development based on the strategic
management concept. Academy of Strategic Management Journal. 18. pp.1-5.
Kitsios, F. and Kamariotou, M., 2017. Decision support systems and strategic information
systems planning for strategy implementation. In Strategic Innovative Marketing (pp.
327-332). Springer, Cham.
Li, Y. and Biloshchytska, S., 2019. Diversification of activity as a component of adaptive
strategic management of construction enterprise.
Mullakhmetov, K. S., 2018. Technological factors and management transformation in social and
economic systems.
Protalinskiy, O., an et. al., 2018, October. Strategic decision support in the process of
manufacturing systems management. In 2018 Eleventh International Conference"
Management of large-scale system development"(MLSD (pp. 1-4). IEEE.
West, G. P., 2018. Strategic Management: Value Creation, Sustainability, and Performance.
Online:
SWOT analysis.2021. [Online] Available through <https://www.businessnewsdaily.com/4245-
swot-analysis.html>

TASK 3
Reflection
I am working in the Bang & Olufsen since many years as a manager. The organisation is
dealing in the electronic products such as telephones, television and many others. I have
evaluated all strategic advantages for the perspective of organisation. I have been evaluating
strategic management which is the process to develop all organisational strategies, missions and
visions, implement these strategies to achieve organisational goals and objectives. I think it is
very important for every organisation to implement various strategies that helps the organisation
to attain their goals and objectives. According to my point of view the organisation have to
analyse all current as well prospective market and competitors situations and formulate
appropriate strategies that help the organisation to use their resources effectively. I think that all
strategies are depends upon the various factors such as organisational structure, available
resources and competitive environment. I believe that various organisation strategies facilitate
the organization to enhance its reach among the local as well as in the global market. In my
perspective the organisation should evaluate all global market trends and rules, regulations and
regarding laws of that respective country to make aware about all conditions, this will facilitate
the organisation to conduct business activities in that country as well. I think that global reach
enhance the customer base of the organisation and demand of products will increase that
accelerate the probability criteria of the organisation.
During the preparation of this report, I have faced various challenges regarding the
collection of data that suits the organisation properly. I have collected related information from
the primary as well secondary research. For gathering most reliable data various surveys are
conducted by me. These surveys are take place on the bases of questionnaire, samples, personal
observations and various statistical data. I think that customer satisfaction plays most important
role in the success of every organisation. To become the successful, the respective organisation
also gather depth informations about the customers such as their needs, wants, demands and their
preferences examine these factors properly and then produce product that have all those qualities
that are required by the customers. I analysed that Bang & Olufsen have face various internal as
well as external insufficiencies that affect the organisation and its productivity and profitability
also. According to me, the organisation have to evaluated all these factors and develop strategies
to overcome their impact on the organisation because I seems that these factors are out of control

of the organisation, so it should try to decrease their effects as possible. Apart from these factors
I think that the environment also provides various opportunities to the organisation, so these
internal straights and opportunities are properly analysed and try to grab on tine to expand the
business across the world. In the process of preparing report I have face various issues such as
time management, slow respondent and lack of resources. By conducting various research
programmes I have learnt about how to manage time on a specific activity and organise
resources for their best utilisation.
From the above reflection I think that Bang & Olufsen is the organisation that produces
various electronic equipments that are also provided by the various organisations that means
that there are effective competition exist for respective organisation. From my perspective to
being successful in the vast competitive environment, the organisation have to make their
products quite different from the others by adding new features and innovate the product. If
These innovative products are provided to the customers at low price. I believe that low price
and quality attract the customers efficiently. Form my point of view Bang & Olufsen should
adopt the cost leadership strategy. I have been analysed that it is the most effective strategy for
the respective organisation to produce electronic equipments at low price. This is evaluated by
me in the research that this strategy facilitate the organisation reduces its cost as possible without
compromising with the quality of product. In order to reduce cost of products at their low level I
think that organisation should use various new technologies that able to produce products in
such low cost, new these days advanced technology make it possible to produce products within
specific defined time period without having any waste. All these technological advancements
and innovations help the Bang & Olufsen to decrease the respective price and make it reachable
to all level customers. According to me this is quite beneficial for the Bang & Olufsen to earn the
more profit and enhance the customer base. The organisation should adopt various latest
technology in its production process, so cost of production is decreased that effects the price of
the product as well. I perceived that if the cost of production is under budget then the
organisation set low price of products that attracts more customers. By doing all these activities I
think that organisation is able to make better positioning then their other respective competitors.
All work is divided in the meaningful divisions that are assigned to all team members as
their strengthen area and if they have some shortcomings then all team members help each other
to complete the assigned task. I have been analysed that these team work improves the overall

organisational activities and develop the leadership as well team sprite in the respective
organisation. As manager of organisation, I coordinate all work of my team and support them to
increase their work efficiency. It is being analysed that it is quite beneficial for the Bang &
Olufsen to cost leadership strategy. All the aspects of strategies are being implemented in the
efficient manner. I observe that in the strengthen area the organisation do more better and
achieve all defined objectives and goals within determined time period and in the weakest
section it improves its potentiality by providing various training to their employees, so they can
contribute in the accomplishment of organisation defined goals.
As per the above reflection, I can conclude that strategic management is very important
for the organisation to being success organise all resources in effective manner and implement all
strategies in order to complete all organisational goals and objectives. I think that cost
leadership is play vital role in the attracting potential customers towards the organisation then its
competitors. According to my point of view Bang & Olufsen adopt the cost leadership strategy
and reduce all waste stages during production phase. It is evaluating by me that organisation
conduct various promotional activities to spread the awareness of the respective product among
the customers. As a manager of Bang & Olufsen, I have learnt and develop various skills and
qualities in my self also. I have learnt about how to manage time on specific activities and take
effective and creative decisions in the critical situations. In the preparation of this report I have
analyse all situations closely that develop the analytical skills that is being utilise in various
critical situations. Apart from cost leadership strategy I think that Bang & Olufsen also adopt the
customer differentiation strategy that provides different products to their customers according to
their requirements.
It is being evaluated by me that action plan is the process that transforms all planning
and prospect activities in to action also it guide whole organisation to complete all organisational
goals and objectives at defined time period. I think that Bang & Olufsen should adopt the cost
leadership strategy to accomplish its all defined goals and objectives. It is being evaluated that
cast leadership effectively reduce the perspective cost of product and provide it to their
customers. It make the product quite different from the other ones. Apart from that it I believe
that differentiation strategy is also adopted by the organisation to provide different featured
product and services customers then their respective customers. According to my point of view
there are various skills are required to adopt these strategies in the organisation such as all

technical as well as behavioural skills that help to conduct all activities, strategies and respective
planes into the real actions. I tried to evaluate all factors that affect the production of company
like internal as well as external environment that brings various opportunities, strengths and
threats, weakness. All these factors are being evaluated by me and my team members to know
about all situation in which the organisation is working in and what strategies should be
appropriate for the succession of respective organisation. For being the part of this report I gain
various knowledge about the strategic management aspects and learnt how to implement these
strategies to cope up from difficult situations. If I have get opportunity to conduct it again it will
use this method only because it is able to manage all organisation resources in well defined
manner. Lead the organisation towards success.