Sustaining the magic at Bang & Olufsen

This article discusses the strategic management of Bang & Olufsen, a high-end luxury Danish consumer electronics company. It evaluates the impact of the company's strategy on its decisions and activities. It also analyzes the PESTLE and Porter's Five Forces analysis of Bang & Olufsen. Furthermore, it examines the external and internal factors of the company and its response towards them. The article concludes with a SWOT analysis and VRIN analysis of Bang & Olufsen.

Sustaining the magic at
Bang & Olufsen

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
SET – 1 ...........................................................................................................................................1
Evaluate how strategy adopted by Bang & Olufsen impact company's decsions and activities
.....................................................................................................................................................1
PESTLE analysis of Bang & Olufsen (B&O).............................................................................2
Porter's Five force analysis of Bang & Olufsen..........................................................................4
Analyse external and internal factors of company and their way to response to towards them.
.....................................................................................................................................................5
SWOT analysis of Bang & Olufsen ..........................................................................................5
SET -3 .............................................................................................................................................8
Individual Reflective Essay ........................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The term strategic management is refer to a part of a management which is concerned
with the development of strategic vision, setting out objective, formulating and implementing
strategies with aim of accomplishing the desired goal or objective in an effective manner. Along
with this, application of suitable or appropriate tactics enable an establishment to gain
competitive advantage and also can achieve dominance over the market. However, it is been
identified that understanding the aspect of strategic management plays a significant role as it
empower a company to survive within the changes of business environment in an innovative and
creative style (Ansoff And et. al., 2018). In regard of this report, Bang & Olufsen has been
considered which is a high end luxury Danish customer electronics company that manufactures
audio products, television set s and telephones. It is founded in the year of 1925 and it is
subsidiary of Haman International Industries. In this study, it involves application of relevant
theories, models in order to analyse internal and external business environment. Finally,
presenting the collected information in a reflective statement for gaining the better understanding
of strategic management in regard of enlarging company's overall productivity ratio.
IN relation to Bang & Olufsen, the industry where it operate and deliver its product or
services is highly competitive and challenging that directly impact over its overall sales
performance. However, the company desire to come up with innovative products into an existing
marketplace for which they face various threat like political factors, dynamic customer taste or
preference, demand of innovation or technologies sand so on. Such rivalries influences the
ability of organisation to survive inside the competing industry for longer time duration.
Therefore, for attaining sustainable productivity during such type of competition, implication of
various theories or concepts related to external and internal business environment drive firm to
make best strategic decision in order to gain competitive advantage (Hill, Jones and Schilling,
2014).
MAIN BODY
SET – 1
Evaluate how strategy adopted by Bang & Olufsen impact company's decsions and activities

PESTLE analysis of Bang & Olufsen (B&O)
PESTLE analysis is a tool which is utilized for studying and evaluating several macro
factors, existing in economy in which organisation operates and have its business. These
elements have huge impacts on the business, affecting its functions and overall business
performance. This framework is specially important while company is bringing new products in
market or when entering in new market with entirely fresh product. PESTLE analysis of Bang &
Olufsen is present below:
Political factors refers to those impacts different government have on the industry and
businesses existing in that industry. Bang & Olufsen have its operations in several geographical
areas having different governments, therefore, it is exposed to several political environments of
countries (Ginter, Duncan and Swayne, 2018). The variation in laws of different political
environment from nation to nation affects the company. Bang & Olufsen needs to keep
standardization in its operations across all its locations and for that it had to have updated
knowledge about all laws and regulations. Otherwise, it can affect the entity in negative manner.
Economical element are determinants of an economies performance like inflation,
economic growth and interest rates. Bang & Olufsen has faced negative impacts due to
unbalanced economies. Needs of people and supply are unbalanced which caused huge problems
for company to mange its supplies as they can not predict or forecast any particular number for
manufacturing. Also, recession is another area of worry as it can have its impacts on production
and performance level of company.
Social dimension of the market in which organisation is operating is discussed here.
There are several factors present in social environment which can affect the entity's business like
age distribution, income, career attitude and preferences of people. Social components of Bang &
Olufsen played vital role in expansion and growth. The company was providing jobs to local
people increasing their purchasing power and focusing on human resource advancement which
increased its goodwill. People start choosing Bang & Olufsen before other as they had really
good image and reputation in mind about the organisation (Trigeorgis and Reuer, 2017).
Technological components is focusing on innovation and new technology that can affect
the operation of entity in both negative and positive manner. These components can be level of
innovation taking place, R&D activities and technological changes, all these can influence the
business actions. Bang & Olufsen always concentrate on technology and on being updated, still

some problems are still faced by the company. They do not have their innovation and still
dependent on the international technological changes and innovative ideas.
Environmental factors just came into the picture from the past ten years due to the
increasing scarcity of resources and raw material. This element include ecological and
environmental aspects like climate, weather, climate change etc. and they mostly impact on
farming and tourism industry. Bang & Olufsen have most of its operations in Taiwan which is its
complementary region. It increases its ability to expand as it provides raw material required by
the company which rises the level of its manufacturing abilities (Foss and Hallberg, 2014).
Legal dimensions is somewhat similar with political factors but its refers to more specific
laws and regulation passes by government for effective management of the economy and
businesses performing their activities in it. These laws talks about health and safety laws,
consumer protection, copyrights, patents and trademarks. Government of Taiwan is in favour of
Bang & Olufsen from very beginning. They has legal security over its intellectual property and
technology which increased the dependency of other on it. They also, provide high value to legal
contracts which is evident by the practices it undertakes and its strictness in order to run in
accordance with law.
Bang & Olufsen macro factors are mostly in favour of the company except economical, as the
world economy is unbalanced and facing economical issues according to their industry. But other
than that almost all factors are in favour of Bang & Olufsen specially social and legal. This is
because the government supports the company and they are having good image in public as
company is concerned about them, the environment they work in, providing expertise training to
their staff (Aguinis, Edwards and Bradley, 2017).
As earlier mentioned the term strategic management plays a vital role in an organisation
as it help them to place their brand in an aggressive and competitive position without any
obstacles. However, there are various types of strategies that has been utilised for different level
of a company such as marketing strategies, corporate and business level strategies. IN context of
Bang & Olufsen, they take an initiative to identify the market trend and customer taste or
preference and based on that company take corrective course of action in terms of make use of
all available resources at optimal level. With the help of such action, it enable establishment to
obtain profit maximisation among competitors. Along with this, in regard of Bang & Olufsen
business unit level, it make an effort to analyse the market and according to that implement best

strategic decision in aspect of product development, innovation, integration, market
development, diversification and so on. Moreover, in perspective of corporate level, Bang &
Olufsen take an attempt to examine the trend if marketplace on which they operate and as per
that take proper action by introducing effective tactics or products into the market in order to
attain sustainable competitive advantage among competitors.
Porter's Five force analysis of Bang & Olufsen
This is a model that organisations use for identifying all competitive forces which exist in
marketplace. These forces helps shaping the industry and determine its weaknesses and
strengths. There are five competitive forces involved in this model which are explained below in
context of Bang & Olufsen:
Bargaining power of supplier refers to the power supplier holds over market and their
influence on the prices (Karadag, 2015). Bang & Olufsen have very low bargaining power as the
market is dominated by three players Powerchip, Nanya and ProMos. Also, another factor is
there is excess of supply in market as compared with demand.
Threat of substitutes is a damaging threat which talks about the number of similar
products available in marketplace. This is very dangerous and impactful threat which do not have
its impacts only in monopolistic market. This threat is really high as too many suppliers are
present in market and also in international market.
Bargaining power of buyers denotes power and influence buyers have on the prices of
products and services company is producing. Bang & Olufsen customers do not hold high
bargaining power as the market is dominated by the top leaders which is a positive point for
Bang & Olufsen. But is also, a disadvantage for it as the entity do not hold any power over
market (Engert,Rauter and Baumgartner, 2016).
Threat of new entrant is very clear by its name, new emerging competitors are always
works as threat for existing companies. This threat is high for Bang & Olufsen as new
competitors are coming in market very frequently. But it has very low effect on operations of
Bang & Olufsen due to the expertise and abilities company has with it and indulged in its
operations.
Existing rivalry are the competitors which already exist in marketplace in which company
is operating and having its activities. This is a very huge problem for Bang & Olufsen, market is
controlled by the leaders who are much bigger in size and have more power over others.

Therefore, the rivalry of Bang & Olufsen is very high giving company competition on every step
and on every stage of business.
Analyse external and internal factors of company and their way to response to towards them.
SWOT analysis of Bang & Olufsen
This is a tool of analysing and understanding those internal and external factors which
helps company to attain their predetermined objectives and to be safe from any kind of threats.
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. out of which two
elements are internal and two are external to organisation. These factors enables entity to explore
new opportunities by playing on it advantages company can mitigate effects of all possible
threats and reduce its weaknesses (Gallus and Frey, 2016).
Strengths are those factors or areas in which the organisation is the best and by which
they differentiate from other in marketplace.
Weaknesses are those section where company lacks and which pull its performance
down. These weaknesses can prove to be very harmful for the entity making them weak and
dependent on others.
Opportunities are those external elements by which exploring them company can earn
better profits, increase its market position and attain competitive advantage over its other
competitors (Powell, 2014).
Threats involves those things or components which can negatively affect the organisation
from outside forces. These threats can be very harmful and can lead the firm towards failure or
put them into heavy losses.
Bang & Olufsen SWOT:
Strengths Weaknesses
 Bang & Olufsen biggest strength is its
resources and capabilities, company
utilize to earn competitive edge in
market.
 The reputation Bang & Olufsen holds
in marketplace plays a vital role and the
 Bang & Olufsen dependency on outside
international market for technology it
do not have its innovation.
 Their pricing strategy is also a
weakening point for Bang & Olufsen.
Customers are satisfied with the quality

expertise it has with it for
manufacturing of goods. This is another
strength of Bang & Olufsen which is
very influential for company
(Hladchenko, 2015).
but not with the price of products.
Opportunities Threats
 Growing market size and regular
changing preferences of customers
plays role of huge opportunity for Bang
& Olufsen.
 Assess to more international talent
present in global market will bring
more expertise in company along with
new ideas.
 Threat of rising competition is always
present in market and same is the case
with Bang & Olufsen.
 Increasing bargaining power of
customers is another threat which is
emerging due to increasing number of
suppliers in economy with similar
products and services.
VRIN Analysis
Every establishment has huge influence from its internal capabilities and potentiality in
regard of maximising the proficiency ratio within competing industry in a stipulated time period
(Baumgartne and Rauter, 2017). Hence, the VRIN analyses is one of the integral strategic
management tool in which it enable an organisation to identify its strength and weakness and
based on that taking corrective steps with an intent of overcoming the same for acquiring
improved level of sales performance. However, Bang & Olufsen takes an effort to apply VRIN
analysis into its functional unit which are as follows:
Resources Value Rare Imitable Non-
substitutable
Competitive
advantage
Global
Competition
Yes No No No Competitive
Disadvantage
R&D skill Yes Yes No No Competitive
Parity

Innovation Yes Yes Yes No Temporary
Competitive
advantage
Human
Resources
Yes Yes Yes Yes Sustainable
Competitive
advantage
As per the above shown table, it has been evaluated that Bang & Olufsen capability to
survive within global competition is highly valuable that lead them to acquire aggressive position
among competitors in a productive style. On the other hand, company also has various oethr
internal strength like its R&D skill which is valuable and rare, potentiality of adopting
innovation is valuable, rare and imitable in nature (Rees and Smith, eds., 2017). Finally, Bang &
Olufsen core advantage is that is human resources which is categorised in valuable, rare, imitable
and non- substitutable that make them sustainable competitive advantage in competing
marketplace.
Value Chain Analysis
This tool emphasise in analysing internal firm activities syuch as recognising the
activities that is more valuable and on which area company can improved its process so that they
can easily attain competitive advantage. The Bang & Olufsen value chain analysis are as
follows:
Primary Activities
Inbound logistics: Under this, Bang & Olufsen has simple and organised process for
material handling, scheduling vehicles, equipment maintenance bansd many more that lead an
organisation to manage its all receiving and processing of raw materials in an trenchant way.
Operation: IN this, company assemble all of its products or services raw material in a
proper way and make an effort to convert into final goods in a best or high quality in order to
obtain increased level of customer satisfaction (Borland and et. al., 2016).
Out-band logistics: IN this, it signifies the Bang & Olufsen outband logistics in terms of
collecting, storing, physically distributing and scheduling is fully efficacious. Due to such
process, it motive them to enrich its market share or size in an improved manner.

Marketing: In this determinant, it signifies that organisation evaluates market demand or
need and on the basis of that develops a product by adopting different promotional strategies
such as advertising, personal selling, public relation, sales promotion, pricing of product.
Service: Under this, Bang & Olufsen adopts innovative machinery or machines that
empower them to give positive response to customer as well as to fulfil the requirements of
different stakeholders in order to gain competitive advantage.
Henceforth, the explained value chain model help Bang & Olufsen to impose best strategic
decision in terms of adopting best pricing strategies, novel tactics, simple procedure for
managing inbound and outbound logistics. Such action assist firm to acquire an aggressive or
combative position among competitors in a desired time period (Parker, Parsons and Isharyanto,
2015.).
SET -3
Individual Reflective Essay
It is my privilege for getting this opportunity to conduct a study on the aspects of
strategic management that help an organisation to accomplish its long term goal or objective in
an amended mode. Along with this, this study also render the knowledge regarding the situation
or nature of business environment as it keeps on varies as per market trend or competition. Due
to which, it directly influence over establishment decision making procedure in terms of
improving the volume of sales in an effectual mode. IN relation to Bang & Olufsen, it faces huge
rivalries in different grounds such as in context of products, technology, CSR activity,
machinery, procedure for handling raw materials and so on. Hence, an appropriate decision
enable company to tackle with every sort of threat in a better way and also lead them to make use
of available opportunities that drive them to enlarge its growth sustainability in an improved
mode. IN addition to this, for evaluating the company's performance and also to examine the
micro as well as macro factors, Bang & Olufsen make an effort to utilise different kinds of
models, theories that give them proper guidance or direction for enriching the overall
productivity ratio within prescribed time limit. Moreover, with the application of PESTLE
analysis, it motive firm to evaluate its external business environment such as competitors,
government, customer, suppliers and many more that directly linked with the development of
organisation. Additionally, Bang & Olufsen serve and deliver wide range of products and deals

into different geographical region where it faces intense level of threat from government
regulation, rules that effect negatively over establishment brand value among competitors.
However, in order to overcome such negative effect, Bang & Olufsen make an attempt to adopt
relevant or reliable modification and alternation into its functional unit and it empower them to
place their product in a better position. Apart from this, establishment take an initiative to come
up with best product as per the needs of consumer taste or preference that lead them to acquire
increased of targeted customer satisfaction and also assist them to enlarge its consumer base.
Apart from this, company introduces various novel or latest technologies that help them to make
its customer to feel more comfortable and convenient in obtaining their required commodity in a
less time and best price. With the help of these initiation, it impose huge positive impact over
Bang & Olufsen brand image among enormous rivalries in a better mode.
On the contrary, Porters Five Force model, which is regraded as a powerful tool in
analysing competitive force of competitor. However, Bang & Olufsen take an attempt to apply
the same model into its business function that enable them to determine its rivalries potentiality
or capacity to cop[e up with all sort of present or unpredictable challenges. Moreover, Porter
Five force model also lead firm to take right action by installing different novel or new strategies
and marketing tactics that drive them to acquire increased level of volume of sales as well as can
also make them to act more competent among competitors in a bets time limit. Whereas,
adoption of SWOT , VRIN and Value Chain analysis assist organisation to analyse its internal
strength and weakness as well as motive them to examine the opportunities also so that they can
undergoes with emerging threat in a improved manner and can gain competitive advantage.
Apart from this, it also aid establishment to create better working culture that motivate its
manpower to impose full contribution towards an accomplishment of per defined long term
purpose in an amended mode.
Henceforth, for acquiring best and impressive position within competing industry , Bang
& Olufsen should always be very attentive and sensitive towards market trend or competition as
it differ according to consumer need or wants. By practising such initiation, it help establishment
to survive within marketplace for longer time duration without any obstacles. Moreover, firm
must also to make an effort to adhere to all government rules or regulation that lead them to
reduce the interference of government inside its functional unit and it enrich its brand value
among competitors in an impressive or productive style. Along with this, the industry where

Bang & Olufsen offer its services contains huge opportunities that lead them to enlarge its
market share or size into a different geographical regions in a better manner. Therefore,
company can make use of cost leadership strategy, diversification method in order to attain
sustainable growth in sales volume in an effective manner within stipulated time duration.
CONCLUSION
It has been summarised from the above discussed report that strategic management help
an organisation to take best decisions in terms of achieve its defined objective in an improved
mode. Along with this, application of relevant models or concept empower establishment to
acquire an aggressive position within competing industry in a desired time limit. Moreover,
reflective statement help researcher to share its experiences and also assist them to suggest best
strategies or decisions in order to gain competitive advantage in an innovative or creative style.

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