Impact of Strategy on Bang & Olufsen

This report evaluates the impact of strategy adopted by Bang & Olufsen on company decisions and activities. It also analyzes the external and internal factors of the company and how it responds to them.

Strategic Management

Table of Contents
INTRODUCTION................................................................................................................................3
1. Evaluate how strategy adopted by Bang & Olufsen impacts company decisions & activities. .3
2. Analyse the external & internal factors of Bang & Olufsen & how company responses to
themselves........................................................................................................................................6
REFLECTION ESSAY..................................................................................................................10
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................13
Books & Journal:...........................................................................................................................13
Appendices.........................................................................................................................................17

INTRODUCTION
Market is wider and broader which gives rise to competition at larger scale. It is important
for organisation to implement strategies and tactics to deal with their competitors and rivals.
Strategic management is defined as management of firm to accomplish goals as well as objectives.
(Ginter, 2018). Bang and Olufsen, a high end Danish consumer electronics multinational
corporation headquartered in Denmark. This report includes impact of strategy adopted by Bang
& Olufsen affected the company's decisions, external and internal factors of Bang & Olufsen and
presentation. With help of strategic management, it is easier to carry out the business functions and
operations. This report gives a brief knowledge about how strategies adopted by firm to survive in
market and their impact on business.
1. Evaluate how strategy adopted by Bang & Olufsen impacts company decisions & activities
The electronics industry is becoming global in the market with their new and updated
technology and methods. In reference with chosen firm, they are expensive as they provide luxury
high end products to the consumers depending upon their choice. The company was founded by two
young Danish engineers Peter Bang & Svend Olufsen (Lasserre, 2017). It have tie up with Amazon
to sell as well as influence their end users. They mostly focuses and targets the upper class segment
customers. They have introduced a new range of product such as Serene with affordable prices.
Marketing strategy-
With rise in competition, they also have adopted marketing strategy to deals with rivals in
proper manner. The manager of entity have a dynamic nature and focuses on continuous growth as
well as development of entity. Management of organisation adopts the effective strategies and
tactics so that objectives are achieved within a period of time. The strategies adopted by company
are discussed below-
Competitive approach-
The selected entity focuses on high grow approach in which they targets upper middle class
people who have above the average high income. They make sure that customers have ease access
to showroom. They do not wish for mass market as they do not wish to wish to appal their end users
like their competitors and rivals. By adoption of this strategy, B& O are able to provide quality of
services with high end luxurious products. Moreover, it has increased their sales revenue 30% of
ratio.
The quality approach-

In terms of quality and services, their prefer their product as lifestyle products which have a
high standards and which lasts for around 15-20 years. They considered their quality as priority of
organisation which is carried out properly with appropriate considerations. By going with this
marketing strategy it have affected their capital structure because it makes sure that it quality is of
high class so that problems or issues are not faced by end users. In this, decision making process is
necessary because it create a deep effect on process of total quality management. Quality affects
firm reputation at deeper level. Intensity of satisfaction depends upon quality provided by
organisation. Through use of this approach, they have goodwill in market & which reflects ethical
nature of business.
Strategy direction at business unit level- At business unit level, strategies are formed in
relevance with different units such as functional, division etc. When strategies are developed
according to business unit, they each perform in different way. It depends upon department head to
develop heterogeneous strategy for every unit (Hitt, 2017). In relation with chosen firm, they
supervisor of every department make assure that competitive approach is used. Each and every
department have different tactics to achieve their given target or assigned tasks. At unit level,
strategies are implemented to achieve short or medium term objectives.
Strategy direction at corporate level- This is concept of strategy in which decisions
regarding the tactics are made which affects the business and operations at deeper scale. It is mostly
used by organisation with aiming of taking advantage over their rivals in market. This is done by
developing or introducing new product different from the existing one. In corporate level strategy,
selected enterprise targets upper class consumers which makes allows them to competitive
advantage in most effective way (Duan, 2019).These are being implemented with motive of
accomplishing long term objectives. Bang and Olufsen have developed their corporate level
strategy by properly analysing market environment.
Portfolio- Bang and Olufsen
Products segments Products & description
Serene- phone
It is phone which is which is joint venture
product between Samsung and B & O. IT

provide a clear sound technology.
Beosound Shape
It is a different type of speaker which is a
customisable modular wall mounted speaker. It
comprises of hexagonal tiles with including
speakers, amplifiers etc (Popa, 2018).
Beovox
Beovox is massive loudspeaker which gives a
loud sound within large range and bandwidth.
(Pan, 2019).
Beocord
It is tape recorders, of both open reel types &

cassette decks. It have designs with Dolby HX
pro.
Competitors- The chosen firm have many competitors such as Bose, Beats, Shure, Skull
candy etc. which give a tough competition to the company as they also provide quality of products
as well as services within a market affordable prices.
Market position- The chosen organisation targets premium customers which depicts their
market position as they focused on product and price. Thus, they have considered themselves as
high brand positioning at market place (David, 2018).
After analysing the above matter, it has been seen that market strategy is necessary to be
adopted so that all activities are carried out in proper manner. It is crucial for manager to be aware
about market and competitors so that tactics are implemented accordingly. It is a time consuming
process but is needed to be done with proper market research so that profit and sales increases at
higher level. The products are to be developed so that growth and overall development is done in
efficient way. Furthermore, by properly focusing on corporate as well as business unit level
strategy it is easier to make correct decisions by eliminating various risk that can be occurred during
process. They changes their business environment according to customers preferences and taste or
trends.
2. Analyse the external & internal factors of Bang & Olufsen & how company responses to
themselves
Current market & competitor analysis- For analysing they current market, company use
STP approach. STP is a approach which is used by organisations to examine their potential market
and customers for business (Boasson, 2016).
Segmentation (Demographic)- This divides market on basis of income, family structure,
etc. In relation with B& O, they divide their customers into four categories which are first on is
younger and qualified have good income, second is younger people who money with tight hand,
third is one who have all luxurious commodities.
Targeting- B& O prefer differentiated targeting strategy as they focus on quality of
product. Differentiation includes premium price of product in comparison with less differentiated
products. Because of this, B& O are considered as high price- high quality (Ivančić, 2017).
Positioning- The product of chosen firm are premium and luxurious in terms of price,
design, etc. They deliver high quality services and never fails to customer satisfaction. It is
necessary that every organisation should have position in market so that customers get influenced.

Therefore, the above stated matter shows that current market B & O is divided on basis of
above stated components. So, it become easy for them to analyse as well as examine current market
and competitor analysis. Moreover,
External environment (Analysis)-
To examine the issue in external environment PESTEL Analysis is being used in brief
External environment are those factors which affects the business from externally and slows their
growth.
PESTEL Analysis-
It is a tool used by marketers to determine as well as analyse the factors which are affecting
the business environment at depth. In reference with selected brand, by properly analysing the
external environment issue, tactics bare to be used without facing any problems. It includes several
components which are mentioned below-
Political factor-
The political environment of Denmark is stable for chosen company but main issue comes
towards with EU which is not stable due to economic events. In context with B& O, they are
dependent upon both Danish as well as EU regulation. The EU regulation is changeable and which
is creating problem for business sector. Denmark comes under new government which has
increased the tax level to highest in OECD 48.2 % of GDP. These factors are not controlled by
organisations & distract entity from their core activities (Ervural, 2018).
Economic factor- It comprises of elements such as inflation and deflation rate, tariff etc. In
this, involvement of government is more. The debt level of EU is fluctuating and due to which
interest has been cut down so that corporation can borrow their required raw materials. But this has
also leads to increase in unemployment rate which directly affects consumer behaviour of buying.
Theses changes in economy creates a he impact on growth/ overall development of businesses. The
selected brand, have to keep their profit margin low to get interest rate down.
Social factor- These are comprises of disposable income, attitude, behaviour, etc. These
also affects the business activities at depth scale. In EU region, there is big variance in consumers
preferences and their buying behaviour. According to Engel's law states, it has been examined that
if individual experiences increase in income, pattern of buying also changes accordingly (Sarsby,
2016). Thus, product of selected brand are purchased by consumers on the basis of their income.
By focusing on this, it is easier for enterprise to understand the consumers behaviour. Therefore,
manager need to be aware about such changes.

Technological - They technology of chosen company is dynamic as they adjust and change
their technologies of their product according to time period. In context with selected entity, they
invest in their research and development at huge amount. Thus, EU region have vast technology of
business sector. But they develop rarely new technology in market and also they market of
technology is wider by which firm have to keep lower prices.
Environmental- It comprises of elements such as green agenda, waste management,
concern for corporate social responsibility etc. In reference with selected corporation, they have
been always active towards CSR such as they make sure that there is no human trafficking in their
supply chain. The issue with this element is that they use high end sound which creates noise
pollution in society (Moreno-Izquierdo, 2016).
Legal factors- It involves elements such as agreement, contracts etc. which are enacted by
law. In reference with chosen entity, they are in contract with Samsung as they have joint venture
product such as Serene phone. The legal team of company make assures that they contract is
carried out in ethical way without affecting business activities.
So, the given paragraph depicts that understanding of external environment assists in
gaining credentials regarding components which are needed to be focused by businesses. These
components are viewed as issues as well as benefits depending upon situation.
Porter Five Forces-
It is framework which is used by entities to analyse or examine the competitive forces
that affects every industry (Mon, 2020). Examining these forces assist firm in implementing
strategies with accurate measures. To use them, market information is to be collected with help of
research analysis. This will help in using of resources in crucial way.
So, it includes five forces which are discussed below-
Power of suppliers- In business, vendors are crucial who are the sources through products
are reached to customers. They are also make raw material suitable for business and organisation.
They wish for high power with motive earning profit and giving low quality. In reference with
given corporation, they make chooses the suppliers on the basis of their image, ethics, etc. Power
of suppliers is high when there buyers in more, suppliers are few, raw material is rare.
Power of buyers- Buyers are mostly concerned with price and quality of product. They also
preferred for high power with aim of good quality, affordable prices. Therefore, in relation with B&
O, they keep their bargaining power adequate as because there many suppliers and competitors
who target same thing. Through this, they are able to establish a positive relationship within their
targeted market. By keeping average their power, it become easy for them to get recognised by

everyone & also makes them different from others.
Threat of substitutes- In electronic products, intensity of threat of substitute is mostly is
higher. The chosen firm have ample number of substitutes for the same products such as consumers
who wish purchase products at affordable rate can choose JBL, Technicia, Mivi, Skull candy etc. In
this power is relatively high when buyers are many, consumers are few, market is niche etc.
Threat of new entry- Market is rapidly growing with number of new businesses. In this
sector, intensity of new entry is too high because of their regular updates or new products in
market. For example- Sony introduces new earphones, headphones, speakers with timely period.
Thus, entry of new business is high when there is no market of product in region, government
involvement is less, more opportunities are available for growth etc.
Competition in industry- This is most important force that shape the business because the
larger the competitors in market, higher will be the growth economy of country. Competition in this
industry is probably higher because of their traits, specifications, profit margin etc. The electronic
manufacturing sector is rising because of increasing demand and preference of public (ÖNEREN,
2017). In relative with given enterprise, they have number of competitors within the market place
such as Apple, Samsung, JBL, Bose etc. which provides same products to consumers with good
specifications. The degree of competition is been widening which is beneficial for both region &
existing market.
After a brief analysis of matter, it has been analysed that external environment affects
organisational activities at deeper level. So, it is crucial to examine those issues so that decision
making can be carried out in appropriate way. Thus, marketing tool are used to achieve the desired
common goal.
Internal Analysis- This is concept in which it reflects internal environment which affects
functions & operations of business internally. Thus, it is crucial for every corporation to be aware
about such analysis so that decision-making process is carried out with most appropriate way.
SWOT Analysis
It is a framework which is used by marketers to implement strategic planning & identify
strength, weakness, opportunity and threat which are related with are business (Hansen, 2019). To
use this tool, appropriate market research is to be conducted so that correct information is being
gathered. It is strategic tool which is to adopted with correct measures. So, given firm uses this
tool with correct considerations so that everything is being carried out.
Strength Weakness
 Because of EU unstable economy, it is

 It is globally located, which makes it
customer base stronger.
 Due to its high end and premium price of
products their profit /sales ratio is
increasing at rapid scale.
 They provide high quality of services &
products by which they have a goodwill
in market (Iglesias, 2020).
 Due to their focused on less mass
market, they are able to deal with their
competitors.
difficult for them to expand their
business at larger scale.
 Due to rapid change of technology, they
have to change their product
specifications frequently.
 Their have less market share because of
their marketing strategy (Seifzadeh,
2019).
Opportunity
 As the have partnership with Samsung,
they can expand their business in some
of the sectors.
 With their quality of product, they can
also extend their product line with
changing market.
Threat
 As they are in business of manufacturing
electronic products, they many
competitors which can put down their
business such as Sony, Apple, JBL etc.
Advantages-
 With use of SWOT Analysis, it is easier to determine organisations internal capabilities.
 Decision making can be done in efficient manner with correct of approaches
 Additional information is also gained through this model because market research is
conducted (Yan, 2016)
Disadvantages-
 It is only concerned with theoretical knowledge.
 Market research is needed to be conducted for gaining credentials.
 It took time to achieve the final results.
After a brief analysis of above matter, it is seen that by use of SWOT Analysis it is easier to
examine market and competitors in proper manner. It gives a brief knowledge regarding the every
strategies and activities adopted by rivals. Evaluation is being done so that it can be used with

correct measures ( Islami, 2020).
REFLECTION ESSAY
This is the third section of the report where overall personal reflection are going to be included
in this which is based on section 1. The whole project is based on strategic management which is
one of the most essential element for every business entity in the present competitive environment.
When I was doing the whole analysis at the initial stage I was very excited and nervous to start the
project where I will improve my understanding on various topics. There are lot of things which
have their impact on my performance in near future in both personal and professional manner which
I have learnt from this module. It has been identified by me that for every business organization it is
necessary to formulate strategies and policies and keep modifying them on a regular basis as per the
changing environment. This will assist in maintaining long term sustainability of the enterprise at
the competitive marketplace. Therefore, examining the marketplace before developing strategies are
very essential as knowing the requirements of customers help in modifying the products and
services as per their needs. In the present context of Bang & Olufsen, it is a high end luxury Danish
consumer electronics business entity which mainly designs as well as produce audio products,
telephones, television sets. The company was established in the year 1925 and the owner of the
company was Peter Bang & Svend Olufsen, who created a radio in order to work with alternating
current, a product which is innovative that time where mostly radio run on batteries. The company
provides electric products to their customers from last few decades and satisfy the demands of
customers by continuously doing modifications in their product and services as per the changing
requirements of customers. As per the view point of me both the individuals are highly innovative
and produce unique electronic product which help them to remain at the competitive from last so
many years. There are various rivalry firms present at the competitive marketplace which creates
threats for the business organization, therefore it becomes essential for the management team that
they must modify their current strategies and plans as per the requirements of current marketplace
so that they will be able to gain favorable results. On the basis of my opinion it is very essential for
having effective strategies for each and every business entity which assist them in maintaining their
sustainability and growth at the rivalry environment. When I was examining the whole market
trends and situations, it is concluded by me that every organization have their own capabilities and
skills which assist them in order to grab opportunities available at the marketplace. These skills and
capabilities are different in every entity which add value to their products and services offered by
the business entity to their customers. Each and every business entity have their own skills which
are totally different and unique from other business entities.

After examining the whole market situation, it has been observed by me that the management
team of Bang & Olufsen needs to adopt cost leadership strategy. Reason behind this is that there are
ample number of rivalry organisation available at the competitive marketplace who deals in similar
products and services. For maintaining positive competition it is required by the business
organization to reduce the cost of their products as compared to their rival company. Along with
this, my views on this topic is that company should provide high quality service to their customers
within affordable price so that large number of people will get attracted towards the organisation.
While doing the analysis I have found that it is necessary for the higher authorities to select one
strategy as per their suitability so that they can create awareness about their products at the
marketplace. Furthermore, it has also been analysed by me that conducting external analysis is such
an important part for the growth and development of business entity as it assist in understanding the
strategies and plan of rivalry firm. After examining different aspects, it is examined by me that for a
business entity in order to survive at the competitive marketplace requires to adopt effective
marketing strategies so that all the functions and operation can easily be carried out by them in a
well defined manner. It is very crucial but at the same time essential for the manager of a business
entity to be aware about their rivalry, current market position and trends so they can formulate their
plans as per the requirements. For this, proper market research are needs to be done which requires
lot of time and cost but at the same time is quite essential for the growth and success of a business
entity. Each and every products are required to be developed as per the requirements so that
company get required growth at the competitive marketplace. Furthermore, by properly focusing on
corporate as well as business unit level strategy it is easier to make correct decisions by eliminating
various risk that can be occurred during process. They changes their business environment
according to customers preferences and taste or trends. While doing this whole analysis, my overall
experience was so good as I get to learn lot of things which will assist me in near future if I get a
chance to do the same analysis. After conducting the examination and understanding each and every
aspects in a detail manner it has been observed by me that my communication skill, analytical skill
and well as decision making skills has been improved. This will surely assist me in order to grab
opportunities in near future which leads towards the development of my professional skills.
Furthermore, while doing the research it has been observed by me that the strategic purpose of
Bang & Olufsen is that they must gain positive response from their customers in long run and retain
them by satisfying their requirements and demands. For this, managers are required to understand
the changing needs of customers and then implement all the strategies as well as policies to produce
high quality products which satisfy the needs of customers. These strategies and policies for
accomplishing strategic purpose needs to be implemented in an effective and appropriate manner so
that there must be development of positive results. In addition to this, it has also been said that

requirements of customers are dynamic which changes on a regular basis therefore goals of the
company need to be attained by changing their current strategies. Regular modifications in
strategies are quite difficult but it is also very necessary to mould the current strategies so that
company gain competitive advantage at the market place. As per my analysis there must be
adoption of new technology after a certain period of time in order to gain competitive advantage at
the market. Apart from this, managers of the organisation are required to differentiate their
customers on the basis of their income level, standard of living and lifestyle. This will help them to
target their potential customers and leads towards the success of business entity and enhance their
overall profitability in an effective and appropriate manner.
At last, I want to share my overall experience which was quite good and positive. As this is my
first analysis of market situation, I was quite nervous and excited at the initial stage but later on I
got to know that examining the whole market area, conducting research, taking decisions are quite
tough task which improves my overall knowledge and understanding. I have observed that there are
some skills which has been improved after doing the whole research where my communication skill
provides me ample number of opportunities in near future. My overall confidence and faith has
been increased which makes me feel confident while interacting with others. Along with this, my
analytical as well as decision making skills has also been improved which provides me growth
opportunities in near future in both professional as well as personal life. Overall it was a good
experience which gives me both positive and negative learning which will directly affect my
performance in future and help me in grabbing opportunities available at the competitive
marketplace. Along with this, I was enough capable to conduct a market research and will be able to
produce more accurate results if conducted similar sort of analysis in near future.
CONCLUSION
After a brief analysis of above report, it has been concluded that strategic management is
essential for every business so that mission and vision are achieved in correct way. Discussions is
made about various marketing tools such as PESTEL and SWOT Analysis, Porter five forces,
(Porter Generic strategies (PPT) ). This report gives detailed information about how the strategies
adopted by organisation affects their decision making as well as business activities. In this main
focus is on strategies which are to be carried out by management & owe they need to be used.
Without use focusing on strategic management it is not possible for entity to accomplish their goals
within in a period of time. Also, due to rise in competition it has become important to adopt this
concept so that sustainability of business increases for longer period of time. Therefore, to make
decision making is appropriate way, suitable tactics are to be adopted so that goals are achieved.

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Appendices