Impact of Bang & Olufsen's Strategy on Company Activities

STRATEGIC MANAGEMENT
1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Explain the impact of the Bang & Olufsen's strategy on the activities and the decisions of the
company......................................................................................................................................3
Analyse the External and Internal Environment factors of B&O and explain their impact on
the organization...........................................................................................................................5
TASK 2............................................................................................................................................9
Draw an analysis of the strategic solutions of two companies and provide a deep description
of their portfolio and segment, Market position and competition...............................................9
TASK 3..........................................................................................................................................11
Draft a reflective report on the strategies of Bang & Olufsen..................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
2

INTRODUCTION
Strategic Management is a process of planning, monitoring, analysing and assessing all
the needs of an organization, which are required to accomplish the targets and the objectives.
Due to the dynamic business environment it becomes important for the organizations to assess
their strategies on a regular basis to achieve success. The strategic management process helps in
analysing the current situation of the organization, formulating the strategies. Implementing them
and analysing the effectiveness of the management strategies. There are five phases of the
strategic management process, namely- Assessment of organization's current strategic direction,
Identification and analysis of strengths and weaknesses of the organization, Formulating plans,
Execution of plans and evaluating the effectiveness of actions plan and making changes if
desired results are not achieved.
BANG & OLUFSEN is a Denmark based electronic company which was founded in
1925. It is a popular global brand and is a part of Danish Industrial Legacy. It is among the most
important design icons of Denmark which focus on providing quality, design and the high tech
solutions in speakers, televisions, music system and multimedia products. B&O has successfully
achieved a leading position in the luxury segment of the industry (Bettis and et.al., 2015).
TASK 1
Explain the impact of the Bang & Olufsen's strategy on the activities and the decisions of the
company.
B&O deals with proving the quality, design and technology solutions of the electronic
devices like television, headsets, etc. B&O has coped up with the dynamic environment of the
market by the introducing new products with latest technology and design. In 2007, B&O faced a
downfall in the market and later changes the organizational structure and adapted to new
strategies in order to improve the efficiency and enhance the product development at the
organization. The various business and corporate level strategies followed at B&O are as
follows-
Business level strategies
Business level strategies help a business entity to achieve a competitive advantage in the
industry (Albert and Grzeda, 2015). An organization must choose among the following-
3

 Cost leadership: Cost leadership strategies are adopted by the the organization in order to
provide its customers with products at prices lower than the competitors. It has a further
classification based on the market scope whether organization aims at wider scope or
narrow.
 Differentiation: Differentiation strategy is adopted by the organizations who aim at
providing products with unique features and they charge a higher price for it.
Organizations further classify differentiation strategy into wide market differentiation or
focussed differentiation which is specifically for a particular market segment (Bindra,
Parameswar and Dhir, 2019).
Bang & Olufsen adapted to the Focussed Differentiation business strategy in order to
enhance the efficiency of the organization in the industry. B&O aims at providing the electronic
products with best in class quality, design and technology solutions to a limited population of the
market at higher prices hence it can be said that B&O follows focussed differentiation business
strategy.
Corporate level Strategies
Corporate strategies are adopted by the organizations in order to gain competitive
advantage and earn above average profits. The various corporate strategies are Growth, Stability,
Retrenchment and combination and expansion strategy.
B&O has adopted the expansion strategy of the Corporate level strategies. Expansion strategy
can be adopted by the organization which aims at introducing new product or services or to
expanding to new markets. This strategy focuses on increasing the level of activity or
performance of a business at present level. The various Expansion strategies adopted by B&O
are explained below-
 Market penetration: B&O penetrated into market for the television platform which
already has various competitors like Sony, Samsung and LG as a result it only has a
marginal share in the market (Dyer and et.al., 2017).
 Market development: Earlier B&O was considered as a high end manufactures of
television, with an up gradation in technology, B&O had to shift to the production of
LCD TV and smart TVs which can be considered a new market for B&O.
4