Strategic Management: Evaluation of Strategy Adopted by Bang & Olufsen

This article discusses the evaluation of the strategy adopted by Bang & Olufsen and its impact on the company's decisions and activities. It also analyzes the internal and external factors affecting the company and how it responds to them.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
SET 1...............................................................................................................................................3
Evaluation of strategy adopted by Bang & Olufsen and their impact on company's decisions
and activities...........................................................................................................................3
Analysis of internal and external factors of Bang and Olufsen and how the company responses
to them....................................................................................................................................6
SET 2...............................................................................................................................................8
Covered in PPT.......................................................................................................................8
SET 3...............................................................................................................................................8
Organisation strategy help in strategy evaluation..................................................................8
Reflection.............................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management is the process of planning, monitoring, controlling and utilizing all
the company resources in order to meet its goals and objectives. It also involves setting
objectives that are to be achieved by the company within a specified time by analysing both its
external and internal environment so that strategies can be formulated and implemented
effectively by efficiently utilizing all the potential resources of the company (Strategic
Management .2019). To understand how strategies that are adopted by a company affects their
business decisions and activities, Bang and Olufsen is taken. B&O is a company which is
company which is headquartered in Struer, Denmark and specializes in high-end luxury
consumer electronics products. The company was founded in 1925 by Peter Bang and Svend
Olufsen and it designs and manufactures audio products, television sets, and telephones. Also in
this report the internal and external factors that impacts the B&O decisions will be discussed.
Further the report will also include discussion about how the organisation's strategy help the
company to evolve strategically.
SET 1
Evaluation of strategy adopted by Bang & Olufsen and their impact on company's decisions and
activities
Company background : B&O is a company which is situated in Struer, Denmark and
specializes in providing its customers with high-end luxurious consumer electronics ranging
from audio products, televisions and telephones. The company was founded in 1925 by Peter
Bang and Svend Olufsen who initially designed a radio which could work on altering current
which was a revolutionary idea to provide more convenient power source to the radio. This was a
significant invention as at that time the radios used to work on batteries (Valeur, Bang and
Olufsen AS, 2016).
Vision : The vision of the company is to change the style in which people listen and see
the world around them through highly advanced audio and video products.

Mission : The vision of the company is to develop video and audio products with
differentiating designs, high quality and innovation along with being user friendly.
Objectives : The objectives of the company is to decrease the number of its strategic
partners by 30% and to maintain long-term relations with its key partners so that the company
can have an easy access to new and specialized technology. Also the company expects to fully
integrate technological platform with its product domains within two years. Also the company
aims at developing new products at a quick pace and also being cost-effective in production.
Bang & Olufsen is facing high competition in the market as its competitors are evolving
their techniques to provide their customers with low cost and high-end technology along with
better quality. The company aims at launching new products with best available technology
solutions, highly defined quality and unique features so as to remain competitive in the market.
The strategies that are followed by the company and their impact on company's decisions
and activities are discussed below : Pole position : Under this strategy the company focuses mainly on increasing the
profitability of company by being centred on product range. This strategy is based on
setting a clear goal that has to be achieved by the company. With this being the main
purpose a sense of urgency is created among all the team members so that they can work
together in an efficient manner (Ansoff and et. al., 2018). The roles and responsibilities of
the team members are clearly defined to all the members so that they can perform in an
efficient manner to complete their task on time which help the company in achieving its
goals effectively. The impact of this strategy on company's decisions and activities is that
the employees of the company can be integrated in a better way so that they can
coordinate and collaborate their work to achieve the overall goals of the company which
help in increasing the profits. The decisions of the company are also affected as
delegation of tasks to employees is based on their skills and qualifications so that the
company goals are efficiently achieved. Product development in fewer product categories : The company focuses only on
developing a fewer product categories so that making areas of audio and video products
can be focused. This helps the company in reducing its cost of developing each product
separately according to the design specifications. This creates impact on company
decisions and activities as decision regarding which product to develop through

technological advancement becomes easier. Also as the company focuses on developing
only few products it makes the activities of the company efficient in building products
which are unique and of high quality (Arnold and et. al., 2015). Focus on one technological digital platform for each category : The company tries to
use the technological advancement launched in one category into all the other categories
of its products. It helps the company to reduce its time and cost related to launching new
products. This creates an impact on the company decisions and activities as to which
product it can launch using the same technological advancement which it has brought in
all its products which also helps in reducing the cost of research and development of the
company to develop a new technique for each category.
 Focus on one global sales organisation : As the company focuses on one sales
organisational structure it helps it in supporting its 800 authorised concept stores that are
located across the world and the shop-in-shops. It helps the company in providing best
quality products to its customers and giving the best and standardized quality of services
to them which makes them brand loyal. This helps the company in making its sales
department efficient in increasing sales in the target market of the company (Chen and
Wong, 2015).
 Adjusting cost structure based on market conditions : This helps the company in
making profits even in the adverse market conditions. The cost structure of the company
products are monitored in such a way that it can compete in the market efficiently. This
helps the company in taking effective decisions in pricing their products based on the
market situations which helps it in sustaining in the competitive market.
All these strategies adopted by the company effects the company decision-making
regarding how it segments, targets and positions its products in the market. The company mainly
focuses on high income class families who can afford luxurious consumer electronics which
helps it in segmenting the market properly. Then comes targeting the consumers to buy their
products. It is done by the company by promoting its products through digital marketing through
T.V., print media, social media etc. After this the company needs to position its products so that
a superior position in the market can be gained over its competitors which the company do by
bringing technological advancements in its products so that the elite customers can be provided

with best quality of audio and video items which will help the company in increasing its sales
and making the customers brand loyal (Ehrhart, 2015).
The approaches that are followed by Bang and Olufsen are : Competitive approach : The company competes in the high-end technology market and
approaches its high-income group customers by placing its showrooms in the near
vicinity of the potential customers. The integration of unique designs and high qualities
are notable selling points of each product. Quality approach : The company focuses on providing the best quality products to its
customers which can help the customers in gaining high level of satisfaction.
 Differentiation approach : The company aims at building highly unique and innovative
designs in each of its products which helps it in differentiating its products in the market.
Intelligent technology, advanced features and unconventional solutions are the main
focus of the company.
Analysis of internal and external factors of Bang and Olufsen and how the company responses to
them
All the business organisations are affected by the internal and external factors that affects
the business functions and operations and also influences its strategies and policies that can help
the company in achieving its goals and objectives. The external analysis of Bang & Olufsen is
given below : Political : These are the factors related to the rules and regulations that are framed by the
government of the company which affects the functions of the company like tariff rates,
tax rates etc. Denmark is a politically stable country and is also a part of European Union
which applies some technological restrictions on Denmark which affects the chance of
making quick changes in technology. Also the EU implements trade restrictions due to
protectionism which impacts the company's trade. The response of the company to these
political factors is that it has expanded its stores all across the world so hat no trade
restrictions can affect the sales of the company in the international market (Fozer and et.
al., 2017). Economic : These factors are related to the economic conditions of the country like
unemployment rate, GDP, interest rates etc. Bang & Olufsen has a vast market in UK and
the economy of UK is highly progressive with high purchasing power of people which

helps the company in expanding its market in UK. The response of the company to this
factor is that the company is able to bring highly advanced and unique features in its
products as the people are ready to spend more amount on luxurious goods which can
help them in gaining prestige and pride in the society to which they belong. Social : These factors are related to people living in the country their religion, culture,
demographics etc. In Denmark the people considers B&O as a luxurious brand which
defines their position in the society, also the company offers consumer electronics which
is built with high technological designs and quality. Also the employment rates of the
people is high in the country which helps them in purchasing expensive products. The
response of the company ton this factor is that it can expand its market in Denmark as
more people are ready to buy their products (Hill, 2017).
 Technological : The speed of technology advancements is increasing at a faster rate in
the consumer electronic market with new levels of technologies being used so that unique
and innovative features can be installed in the products which will help in making the
customer satisfaction high and also attracting more customers to buy their products. The
response of the company to this factor is that it is spending more amount on R&D so that
it can introduce new and innovative features in its products before any other company in
the market.
The internal factors that affect Bang and Olufsen and the response of company to these factors
can be understood by the use of SWOT analysis which is done as follows : Strengths : The company has a strong brand image in the international market which
helps the company in expanding its products in the large market so that more customers
can be created. Also the company offers unique and innovative designs in the consumer
electronics which helps it in acquiring a large market on the basis of technologically
advanced products it offers to its customers. The response of the company to its strengths
is that it is continuously bringing innovative advancements in its products so that it can
build its brand image and make customers brand loyal (Hitt and Duane Ireland, 2017). Weaknesses : The company has a highly efficient workforce and the engineering team of
the company is also good which helps the company in bringing technological
advancements in it its products but the workforce is becoming highly expensive. Also the
suppliers of company have high bargaining power which increases the cost of production

of the company. The company responses to these weaknesses by bringing down the
number of suppliers so that it can deal with only a few suppliers who can provide them
with cost efficient products (Inigo, Albareda and Ritala, 2017). Opportunities : The company can expand its markets in new countries either by opening
new manufacturing units in those countries or by opening new stores so as to reach a
large market which remains untapped. Also as the consumers are more attracted to
luxurious products it gives an advantage to the company to increase the sales of the
company.
 Threats : High amount of competition from other companies dealing in electronic goods
such as Samsung, Sony etc. which focuses on all the types of customers ranging from low
income groups to high income groups possess a challenge for the company. The response
of B&O to this factor is that it brings continuous improvements in its products and also is
highly technologically advanced which helps in attracting high income groups. This help
the company in making high profits by selling its products to these customers.
SET 2
Covered in PPT
SET 3
Organisation strategy help in strategy evaluation
Organisational strategies help a company in evaluating the performance of the company
based on if the facts if the company was able to achieve the goals and objectives it had desired to
achieve by implementing the strategies (Kolios, Read and Ioannou, 2016). This evaluation shows
the efficiency and effectiveness of the company in implementing the comprehensive plans so that
the desired results can be achieved. It also helps the company in evaluating its weak points and
also the scope of future improvements so that the company do not repeat the same mistakes in its
future projects. This helps the company in being more efficient and also comparisons between
the actual and estimated results can be made which can help in making corrective measures or
actions so that the company can achieve its goals and objectives as expected. Also competitive
advantage in the market can be achieved along with fulfilling its strategic purpose. This can be
done by being efficient in the strategy implementation so that a large number of customers can
be reached which can help the company in increasing its sales thereby increasing its profitability.

In the case of Bang and Olufsen the company faced a dramatic downturn in 2007 due to
gloabla financial crisi and also the paradigm shift in the market due to the main drivers present in
the market bssed on digital and networked technology. This led the company to change its
organisational structure so that a new strategic plan could be implemented in the ompany in
order to effectively deal with the situation. This helped the company in improving its efficiency
and also the company focus was mainly driven on building new and unique designs for the
company’s products. It helped the company in sustainably developing its products in the highly
competitive market (Madsen and Walker, 2015).
The company mainly focus on bringing new and innovative technological advancements
in the consumer electronic products i.e. mainly audio and video products. The company adopted
a ‘Pole Position’ strategy which helped the company in focusing on a certain product categories
so that technological advancements can be brought focusing on those products. According to the
new strategy related product categories such as mobile phones, M3 players and standalone
products like DVD2 were stopped being developed further. This helped the company on focusing
on main areas of audio and video. B&O further started developing all the products in different
product domains on one basic technological digital platform. This helped the company in
reducing the cost and time that is involved in bringing technological advancements in its
products. This strategic implementation helped the company in providing its customers with
highly defined, standardized and featured qualities which made the customer experience highly
advanced. Also the customer satisfaction can be achieved by proving them with high quality and
advanced technological solutions (Moutinho and Vargas-Sanchez, 2018).
Thus through this strategy the company was able to successfully able to achieve its goals
and objectives of developing exclusive audio and video products with differentiating designs,
quality, innovative techniques which are also user friendly and easily understandable by the
customers along with enhancing their experience of highly advanced technology. The strategy
adopted by the company i.e. ‘Pole Position’ helped the company in achieving its targets as the
company was able to focus only on the main products that helped in making the company
specialized in bringing technological advancement in the products. The strategy also created a
sense of urgency among the team members so they took their responsibilities sincerely and
completed their tasks on time. Also the focus on one technological platform for all the categories
of products helped the company in reducing its time and cost that is involved in developing

technologically advanced products (Nussbaum, 2017). The company also adjusted the cost
structure of its products based on the market situations which helped it in monitoring its profits
and losses efficiently. Thus the strategy helped the company in developing new products both
more quickly and more efficiently. The company thus introduced BeoVision 10 in 2009 which
was a new 40-inch LED television which was developed by B&O following the new strategy.
The idea was to create a ‘broadcast painting’ for the living room. Thus the strategy
helped the company in coming up with many technologically advanced products that were
suitable for the use of high income groups of the society. This also helped the company in
building a strong and long-term loyal customer base. The designs provided by the company are
exclusive and one of the best designs in the electronics industry. The company is thus able to
develop new products advancemeentss with speed and efficiency which helped the company in
being thee most luxurious brands of consumer electronic productds. The brand image of the
company has also enhanced which helps the company in expanding its market share and also
acquiring more customers to purchase its products (Sridhar and et. al., 2016).
Reflection
I am thankful to be the part of this report as it has enhanced my skills and knowledge
regarding Bang and Olufsen and it's product. This successfully company is dealing in distinguish
products such as, televisions, speakers, music systems, multimedia product and so on. This
enterprise is also known as Danish design icons. I came to know that this particular brand is also
dealing in television, speaker etc. and are meeting the emerging needs of the customers. But
when I deeply examined the organization's profile I came top known that it faced financial crises
in the year 2008 due to which market value and profitability ratio decreased to a large extent. It
came to known that enterprise only contributed 10-16 percent to turnover. Additionally, bang
and Olufsen depends on key suppliers for new technology. Through this report I came to known
that how market strategy raises business in the market. It is possible because I was part of this
report till completion. Pole strategy was adopted by the organization in order to raise their
market value and to build customer for the television, speakers, music systems, multimedia
product and so on. This tactics has directly or indirectly helped organization to create tough
bench mark for others as they come up with innovative idea in their products. By this large
number of customer base is created and profit is maximized. By examining all this about the
business administration I came to known in order to survive in neck to neck competitive world it

is essential to adopts effective and unique marketing strategies. However, in order to cope up
competitors it is very important to understand the market scenario and rivalry plans. By this
survival and sustainability is possible of the firm. I also, came across that the vision statement of
the organization is to formulate exclusive audio and video products with unique design and
quality.
CONCLUSION
From the above discussion it ended that organization is focusing more on innovation so
that customers can be bind with the product over the years. The attitude of not quieting from the
market helped firm to grow in the intense market strongly. To survive and sustain in the market it
is important to adopts new market strategy . This assist the company to grow and develop in the
open market place successfully. As well as loyal customers are build with the phase of time.
Pole strategy helped organization to again rebuild their image in the eyes of the customers. By
this sales volume of the product which are, televisions, speakers, music systems, multimedia
product and so on uplifted at a tremendous scale in open market place. It leads the business
associated to generate huge revenue which is further used for growth and development of the
business in the international market.

REFERENCES
Books and Journals
Ansoff, H.I. and et. al., 2018. Implanting strategic management. Springer.
Arnold, K.A. and et. al., 2015. Leadership styles, emotion regulation, and burnout. Journal of
Occupational Health Psychology .20(4). p.481.
Chen, W.W. and Wong, Y.L., 2015. Chinese mindset: theories of intelligence, goal orientation
and academic achievement in Hong Kong students. Educational Psychology .35(6).
pp.714-725.
Ehrhart, M.G., 2015. Self-concept, implicit leadership theories, and follower preferences for
leadership. Zeitschrift für Psychologie.
Fozer, D. and et. al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production. 147. pp.75-85.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Inigo, E.A., Albareda, L. and Ritala, P., 2017. Business model innovation for sustainability:
Exploring evolutionary and radical approaches through dynamic capabilities. Industry
and Innovation. 24(5). pp.515-542.
Kolios, A., Read, G. and Ioannou, A., 2016. Application of multi-criteria decision-making to risk
prioritisation in tidal energy developments. International Journal of Sustainable
Energy .35(1). pp.59-74.
Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Nussbaum, M.C., 2017. Capabilities, entitlements, rights: Supplementation and critique. In
Justice and the Capabilities Approach (pp. 173-187). Routledge.
Sridhar, R. and et. al., 2016. A Political, Economic, Social, Technological, Legal and
Environmental (PESTLE) approach for assessment of coastal zone management practice
in India. International Review of Public Administration .21(3). pp.216-232.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal. 38(1), pp.42-63.
Valeur, T., Bang and Olufsen AS, 2016. Television with sliding speakers. U.S. Patent
Application 29/503,245.
Online
Strategic Management .2019. [Online]. Available
through:<https://businessjargons.com/strategic-management.html>