Strategic Analysis of Bang & Olufsen: Impact, Factors, and Strategy

This report provides a strategic analysis of Bang & Olufsen, examining the company's adopted strategies, particularly the "Pole Position" strategy implemented by the new CEO. It details the impact of this strategy on the company's decision-making processes and various activities, highlighting both positive and negative effects. The report further analyzes the internal and external factors influencing Bang & Olufsen's operations, utilizing SWOT and PEST analyses to identify strengths, weaknesses, opportunities, and threats, as well as political, economic, and socio-cultural factors. The analysis covers how Bang & Olufsen responds to these factors to maintain its competitive edge, including strategies for increasing sales and revenue, business promotion, and enhancing turnover. The report concludes by outlining how the company's strategic approach assists in evaluating its overall strategy and adapting to the dynamic business environment.

Strategic
management

Table of Contents
INTRODUCTION...........................................................................................................................1
SET 1...............................................................................................................................................1
1. Strategy adopted by Bang & Olufseb impact the company's decision and activities.............1
2. External and internal factors of Bang & Olufseb and how company respond to them ..........3
SET 2...............................................................................................................................................6
Covered in PPT...........................................................................................................................6
SET 3...............................................................................................................................................6
CONCLUSION................................................................................................................................6
REFRENCES...................................................................................................................................8

INTRODUCTION
Strategic management is ongoing process related to planning, monitoring and assessment
of all which is necessary for an organisation to meet their goals and objectives. Modification
within business environment need company to constantly assess their strategies for success.
Moreover, strategic management is predicated on an organisation clear understanding of its
mission or purpose for existing its vision for where it wants to be in future as well as values
which will guide its actions. This report is based on Bang & Olufsen Company which was
founded in 1925. respective corporation is considered as one of the important Danish design icon
as well as important part of Danish industrial legacy. B&O is well known global brand which
have strong focus on design and high-tech solutions in televisions, speakers, music system and
several other multimedia products.
This assignment will identify strategy adopted by Bang & Olufseb and its impact on
organisation decisions as well as activities. Along with this, external and internal factors of
respective business firm will be analysed along with company's response towards them. Apart
from this, it will going to outline how organisational strategy will assist in their strategy
evaluation.
SET 1
1. Strategy adopted by Bang & Olufseb impact the company's decision and activities
New strategy implemented by Bang & Olufseb is named as Pole Position is metaphor
chosen from formula one motor racing. Through using this term Pole Position new strategy has
been design for signal clear goals, sense of urgency, clear task for every member in organisation
and teamwork. This strategy was designed by Karl Kristian Hvidt Nielsen who was appointed as
new CEO of company in 2008. Vision of Bang & Olufsen is to develop exclusive audio and
video products which are different on design, quality, innovation and user friendly. For this
several initiatives has been taken explanation of these are as follows :-
 Focusing on product development within few product categories which are primarily
audio as well as video products.
 Focal point is on technological digital platform for each and every category. This enable
organisation in reducing time as well as cost for new product launches.
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 Along with this, B&O is focusing on global sales for supporting 800 authorised concept
stores at global level and 400 shop-in-shops.
 They adjust their cost structure as per the market condition.
This strategy was implemented by them for recovering losses through which they gone.
In between 2007 and 2009, Bang & Olufseb lost 20% of their turnover because of that main
market of Germany, Denmark as well as Great Britain suffered within particular manner. Main
reason behind this is B&O launch their product which is combined with economic implications
of financial crises which was emerged within 2008. Generally new products launched by
organisation within 12 months previously corresponding to approx. 25 per cent of turnover.
Since 2007, new products are mainly contributing in 10 to 16 % of Bang & Olufseb turnover.
New strategy i.e., Pole Position which implementing by Bang & Olufseb have wide
impact on their decision making. Because there are numerous people who are not in the favour of
this and such things result in wide impact on implementation of company decision making. Thus,
it is necessary to involve each and every staff member within decision making so they get aware
with overall concept of Pole position. Through these practices they will be able to make decision
within effective manner. In addition to this, implementation of new strategies have impact on
activities of Bang & Olufseb because they have to provide training and development session to
their staff members. Below mention are impact on new strategy on company decision making
and activities :-
 Positive effects – New strategy i.e., Pole Position have numerous impact on overall
organisation including decision and activities. As implementation of new strategy result
in adapting changes within legal environment or market place. Along with this it provide
assistance to perform within more effective manner as well as also cost efficiently. In
addition to this, provide assistance to enter within new market, more profitable or market
segment. New strategy can assist a Bang & Olufseb in reclaiming its former growth rates.
 Negative impact – It is not necessary that new strategy is always positive. Internal staff
members resistance will be major barriers to implementation of new strategy as certain
people get strongly resist any type of modification to the status quo or daily routine.
Along with this, there is chances of failure within new initiatives and leaving respective
organisation in worst position before implementation of new strategy.
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Apart from this, there are several other wide impact of Pole position strategy on entire
organisation and its working. Explanation of these in relation to Bang & Olufseb are as follows :-
 Increasing sales & Revenue – By Pole position strategy respective business firm is
coming up with several new products within market area which result in increasing sales
as well as revenue. As customers always want something innovative and attractive
because of that sales will get enhance. Along with this, revenue will be generated as more
company will reach to new peoples.
 Efficient business promotion – When an organisation come up with some new product
within market area it will automatically result in there brand promotion within effective
manner. Along with this, for new offering Bang & Olufseb do marketing in correct
manner which help in direct business promotion. Moreover, through such practices
respective organisation will communicate with audience in better manner.
 Enhancement in turnover – Bang & Olufseb turnover get decrease by 20 per cent in 2008
due to some reason as explained above. Through implementation of Pole position new
strategy company is coming up with some latest offerings which give impact on turnover
of Bang & Olufseb.
Thus, new strategy is mention above along with their impact on bang & Olufseb decision
and activities. In addition to this, it have wide impact on overall working in positive as well as
negative manner.
2. External and internal factors of Bang & Olufseb and how company respond to them
Business environment involve both external as well as internal factors and these have
wide impact on working of an organisation. So it is necessary for Bang & Olufseb to examine
these factors so for internal analysis SWOT will going to conduct. On the other hand, for
External factor analysis will going to conduct explanation of these are as follows :-
SWOT analysis – Bang & Olufsen is company based in Denmark and is renowned for
manufacturing of telephones, televisions sets, audio products and many more (SWOT Analysis
Bang and Olufsen, 2019). Respective organisation is best manufacturer of electronic appliances
by its continually improved various audio-video products.
 Strength – B&O strength is there resources and capabilities which they utilise for
gaining competitive edge. Respective organisation maintained competences by practices,
vast experiences as well as continual development. It has been gained strength in some
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years because it try to make sure that customers get greatest experience always of their
products. Along with this, excellent picture and sound performance of B&O product
which outplay most in market. Another strength is user interface as well as customer care.
In addition to this, B&O have strong brand equity and brand awareness within market
they are operating. Furthermore, brand recognition play important role in attracting new
customers looking for solution in product development, risk management, managing
people, intellectual property, creativity, design and many more. Furthermore, Bang &
Olufsen have first mover advantage in several segments. It has been experimented within
numerous areas such as creativity, intellectual property, managing people, manufacturing,
sales, risk management and many more. Technology & operation, solution & strategy
which assist respective business firm in coming up with unique solution for tapping
uncatered markets. Company respond to them in positive manner for gaining competitive
advantages.
 Weaknesses – It is related to area , skills or capabilities within that Bang & Olufsen
lacks. Along with this, weakness limit abilities of company in building sustainable
competitive advantages. Major weakness of respective organisation is inventory
management as well as cash cycle. To this B&O is responding as there is huge scope of
improving inventory management. Along with this, business firm is going through lack of
critical talent specially in the area of technology as well as digital transformation. They
are struggling for restructuring processes within light of development in area of Artificial
Intelligences and machine learning. Along with this, project management department of
company is focusing on internal delivery instead of considering interest of external
stakeholders. This will result in poor public relation and customer backlash.
 Opportunities – For B&O E-commerce business model provide assistance to tie up with
local suppliers as well as logistic providers in international market. On the other hand,
social media growth provide assistance to respective business firm in decreasing cost of
entering within new market and reaching to customers with lower marketing budget. It
can result in crowd sourcing several services and consumer oriented marketing based on
data and purchase behaviour. In addition to this, they have some more opportunities like
development in artificial intelligence because it will provide assistance in better
predicting consumer demand, cater to niche segment, making better recommendation
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engines and many more. Bang & Olufsen have to implement these opportunities within
their working for gaining more and more competitive advantages.
 Threats – There are numerous threats available for Bang & Olufsen within market area
such as threats of new entrants due to reducing cost as well as increasing efficiencies.
Along with this, respective company is operating in such industry where is culture of
sticky prices. This results in inability part of company to increase price that its premium
price deserve. Thus, in relation to this company are taking major steps to overcome with
such issues they are facing.
Apart from this, for analysing macro environment PEST analysis will help in identifying
external factors and their impact on working of Bang & Olufsen. Explanation of these are as
follows :-
 Political factors – There are some way by which government affect working of
organisations. As there are several laws that are formulated as well as required to be
followed by electronic industry companies. It involve considering safety as well as
ethical practices within daily basis operations of company. In relation to Bang & Olufsen
they have to make sure that they have to follow several laws which are designed by
government for smooth operations of companies. In addition to this, government support
data security which create opportunities for organisation growth.
 Economic factors – In the factor elements included are related to economic condition of
particular country. Economic factors have wide influence on business operation as it has
impact on cost of business firm. Thus, within recession capacity of customers to spend
get reduce as well as to manage minimum sales much emphasis has to be given on
controlling entire cost of enterprise. It is because when only products are in affordance to
general public then only it will create demand itself. There are some other ways also in
which such elements have influence organisation is competition from different v=brands
which have impact on brand positioning of Bang & Olufsen to great extent. The cited
enterprise has worked on its design a quality standards of product in order to compete
with them.
 Socio-cultural factors – With increases in various options within market there is
continuous increasing demand by customer for luxury products. People now a days
focusing more on quality and are willing to spend more if products are serving to them
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with standard quality. This trend utilise by organisation as an opportunity because
through this brand focuses on producing competitive products which are high in features
as well as cost equal to the clients. People welcome products which are better from
existing products within market as well as this concept have to be kept in mind by
research development team of company. If focus more on producing want is better rather
than giving emphasis on cost control techniques.
 Technological factors – They are major factors which give wide influence on operation of
organisation. As electronic market is getting develop continually as there is huge
advancement in technology as well as applications utilise within manufacturing
procedure. Bang & Olufsen have to exploit technological factors as it maximum because
it result in improving their present products by adding more features and quality within it.
This only possible when company adopt changes which are taking place within
organisation and it also provide assistance to B&O in gaining competitive advantages.
The chosen organisation is known for delivering the most effective design products to the
market which are better than before and give more satisfaction to the users.
 Environmental factors – These are those issues which are concerned with the
surroundings. There are lots of considerations which need to be given by business while
operating so that the atmosphere can be protected against the unethical practices. It
demands Bang & Olufsen to operate in a way that it do not harm the environment in any
way. For same use of resources are done effectively and while carrying out the operations
planning is done in a way that the productions of products do not create pollution.
SET 2
Covered in PPT
SET 3
CONCLUSION
From above discussion it has been summarised that, for long term sustainability of
business it is necessary for an organisation to develop strategies as well as manage them in
effective manner so that positive outcomes will accomplish. Along with this, implementation of
new strategies have wide impact on working of an organisation because these effect decision as
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well as activities in positive and negative manner. In addition to this, there are several external
and internal factors which gives impact on working of company. Thus, for analysing external
factors SWOT analysis has been conducted by business. On the other hand, for external analysis
PESTEL will conduct by company because it will help company in identifying impact of several
external factors on company working. Moreover, through implementation of new strategies
organisation will gain several competitive advantages as well as their turnover also get enhance.
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REFRENCES
Books and Journal
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