Strategic Management Report: Bang & Olufsen Company Analysis

This report delves into the strategic management of Bang & Olufsen (B&O), a luxury consumer electronics company. It begins with an introduction to strategic management and its importance, followed by an analysis of how B&O's strategies impact its decision-making and activities at both corporate and business unit levels. The report examines the company's external environment using PESTLE and Porter's Five Forces analyses, identifying key competitors and market dynamics. An internal analysis, utilizing a SWOT framework, assesses B&O's strengths, weaknesses, opportunities, and threats. The study also includes discussions on the impact of strategies on company decisions and activities at various levels, concluding with a reflection on the case study. The report covers the company's strategic decisions, their impact, and the internal and external factors influencing them. The report highlights the importance of adapting to technological advancements and competition within the luxury electronics market.

Strategic Management

Table of Contents
Set 1: Report....................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Impact of strategies on company’s decision and activities..........................................................3
External and Internal Analysis of Bang & Olufsen.....................................................................5
Internal Analysis of Bang & Olufsen..........................................................................................8
Set 2: Group Presentation................................................................................................................9
Set 3: Individual Reflective Essay...................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

Set 1: Report
INTRODUCTION
Strategic management can be defined as a process and practice of the company through
which undertake determination and implementation of strategies. Strategies can be defined as a
set of action that is developed by organization so that they can achieve their desired objectives.
Strategic management enables organisation to achieve their objectives more effectively and
efficiently along with providing them competitive advantages. Strategic management involves
analysis of internal and external environment and its factors and identify the element that affects
business and its operation. This report will discuss about strategic management and it different
elements in context of Bang and Olufsen Company. This company is a high and luxury
Consumer Electronics company that was founded in 1925 and is headquartered at Struer,
Denmark. The company’s main products are high and audio and video products. This study is
based on case of Bang and Olufsen Company and hay contextualized strategies of Bang &
Olufsen (B&O) Company. The case states that after experience in success for or a long time
during 2007 to 2009 company lost 20% of turnover (Bundgaard and Huulgaard, 2019). The case
further discusses about strategies of the company and how they made impact on their
performance. The study will discuss about impact of company strategies on decision making and
activities at various level. Followed by this discussion analysis of internal and external factors
will also be included in the study. Competition of the company is with those companies that are
dealing with audio and video electronics.
MAIN BODY
Impact of strategies on company’s decision and activities
Strategies are set of actions that are developed to achieve objectives of the organisation.
Strategies also provide direction and guidelines which are followed while working. This suggests
that strategies have direct impact on decisions and activities of company. Strategies of
organisation are basis of activities hence it shows clear impact of strategies of Organisation on its
activities.

At Corporate Level
Corporate level is considered to be highest level of the organisation. Strategies
determined at corporate level are based on overall objectives of the organisation. Strategies when
are developed at corporate level they affect and impact activities and decision at all level down
the corporate level (Arasti, Khaleghi and Noori,
2017). The strategy that has been adopted by the B&O is concerned with product development.
This means that B&O have decided a strategy in which they will create new products that are
based on latest technology. Along with this their focus will also remain on audio and video
products and they will not continue with developing mobile phone, MP3 players and DVDs. This
strategy of B&O made significant impact on the actions and decision of the company at its
corporate level.
Corporate level decision involves all kind of products and business of the company when
company stop or start productions of particular product, this affect decision of the company
regarding resource allocation. This means that what products will require what kind of and how
much of resources. This mainly involves financial resources and this is a decision and activity
that is carried out at corporate level. For B&O it is important to understand impact of all
decisions and especially when the company involves production and business in more than one
product line. In this strategy some of the product lines have been deregulated and at the same
time some of the product lines have been restructured. This is why corporate level activities and
decisions get affected by strategy of B&O. corporate level decision and activities also get
affected as strategy also affect contribution of activities to business goals and objectives.
Important element regarding impact of strategy on corporate level of the business is that the
strategy that has been developed is also a decision that has been made at corporate level of the
B&O (Furrer, 2016). this means it is CEO and top managerial positions at B&O that has decided
to bring changes in existing product line and stop developing particular product. Later this
strategy of the company will guide actions and decisions at all levels of the business.
At Business Unit Level
Strategies of B&O also affect activities and decisions at business unit level. Business
level impact of strategies that on the basis of strategy that has been created long term objectives

are translated into short term and actionable goals (Galpin, 2019). Strategies at corporate level of
B&O will affect decision set activities in a way that decisions are made to implement the strategy
and bring the strategy into action so that objectives can be achieved.
Business unit level consist of several department related to business of the company.
Decisions that are taken at business unit level are related to corporate level strategy. There are
several activities that are carried out at business unit level and all strategies are related to and
concerned with strategy and decision that has been developed at corporate level. Decisions and
activities of B&O at business unit level will get affected by the strategy in ways that are-
 Determination of units and products to be developed, this includes at business unit level
decisions related to production are made that is an impact of business strategy.
 Business unit level will also make decisions and take actions regarding the products that
has been developed and further development of the products that has been cancelled.
Regarding cancelled development business unit level will make decision regarding resources that
were being used for those products. Decision at business unit level that has been affected by
strategy will involve relocation of resources. Business unit level will also develop objectives and
goals regarding each of the product individually and will take actions in order to achieve the
objectives. Business unit level also will make decisions regarding different functional areas and
their roles and activities in the achievement of objectives for which the strategies has been
developed (Seifzadeh and Rowe, 2019). The strategy was directly linked with business level as
this involved decisions regarding changes in the product and product improvement. Corporate
level strategy impact was due to nature of the strategy which affected several areas and products.
The impact of strategy on decisions of the business level is that they will develop objectives for
increase in revenue at business level and through certain product. Corporate level strategy will
involve growth at corporate level and growth in all products and their sale.
External and Internal Analysis of Bang & Olufsen
External Analysis involves analysis of current market and competitive forces. On the
basis of its current market position company has positioned it as a luxury and high end consumer
goods products in which it designs and manufacture audio and video products. This suggests that

its competitors are also industries operating in electronic industry and providing audio and video
products. Main competitors of the company are Onkyo, KG, Bose, Martin Audio and Dynaudio.
PESTLE analysis of Bang & Olufsen in order to analyse its external environment-
Political
This involves politics and political uncertainties of the country where company is based and
operates (Nandonde, 2019). Bang & Olufsen is based at Denmark and this is why politics of
Denmark primarily affect Bang & Olufsen and other than this politics of the countries where
products are sold affect its success and operations.
Economical
This factor is concerned with economic impact of the environment, this includes cost of
operations and productions, economic condition of people of the country, taxation policies and
rates, interest rates. These are some of the most important economic impact that Bang & Olufsen
can have on its business.
Social
Preference and orientation of the consumers of the company is element in social factor. Social
factor also involves changing consumer trends and taste and this can make significant impact on
the business and its success of the Bang & Olufsen.
Technological
Bang & Olufsen is electronic company hence this factor has significant impact on Bang &
Olufsen. Technological enhancement requires company to make changes in its products and their
features and characteristics.
Legal
This environment of the business involves all the factors that govern operations and functioning
of the business (Rastogi and Trivedi, 2016). This is one of the most unpredictable environment
and changes in rules and regulations of the country can have direct impact on its operations.

Environmental
This environment is becoming more and more important and this requires that Bang & Olufsen
takes care of safety and sustainability of the environment. This involves reduction in negative
impact that Bang & Olufsen can have on the environment.
Porters Five Forces
Threat of Substitute
Several substitute products are available for the product that are being sold by Bang & Olufsen
and this is why it create threat for its success and competitive position (Lewis, 2017). However
products of Bang & Olufsen are of high quality and exclusive it gives additional benefit to the
company.
Threat of New Entrants
This is a thread that new companies might enter into electronic industry and will increase the
existing competitors. This is threat as new firms might enter into industry and result in
decreasing share of the profit in industry. However it is not easy to enter electronic industry due
to resources and investment required.
Bargaining Power of Suppliers
This is the power of suppliers as they are those parties who supply resources to the company.
This is the reason that they also have power and can affect operations if they do not supply
products and resources on time. Suppliers that Bang & Olufsen requires mainly are those who
are able to supply technologies. Presently there are several sellers who can supply technologies
to Bang & Olufsen.
Bargaining power of Buyers
Buyers are having important power in business and this is because business environment has
become customer centred and this is why they have significant power (Isabelle and et.al., 2020).
Along with there are several sellers and this also increases power of buyers.
Industry Rivalry

This means extent of industry rivalry among firms already operating in a similar industry. This is
very important because all the firms are established and hold power in industry.
Internal Analysis of Bang & Olufsen
This is important to analyse internal environment and factors of the company in order to
analyse their capabilities to utilise opportunities that exist in external environment. internal
environment of the business can be analysed through SWOT Analysis.
Strength
 High quality and exclusive products (this means that high quality of the products and
exclusive products are one of the capability of the Bang & Olufsen)
 Innovation capability (This means that innovation in present business environment is
very important and Bang & Olufsen has capability to innovate the products) (Vlados,
2019).
 Brand image (a positive brand image associated with high quality)
Weaknesses
 Costly products (products of Bang & Olufsen have very high price and this is why it
cannot be afforded by everyone and only limited people can by such costly products)
Opportunities
 Expansion of business operations and activities (Bang & Olufsen can expand its business
operations and activities in other countries in order to increase its opportunities. This will
also allow to take advantage of existing image of the brand)
Threats
 Technological advancement
 Increasing competition and increasing competitive intensity
 Multinational and big brands and their impact on customers

Through strength of Bang & Olufsen it will be able to address and deal with factors that exist in
external environment of the company (Sarsby, 2016).
Set 2: Group Presentation
Covered in PPT
Set 3: Individual Reflective Essay
This module in its first set involved discussion and analysis of the case study of Bang &
Olufsen, a Danish high end luxury electronic company. concerned with case study set one of this
module was based on the case study. Case study includes and discusses about strategic
management and direction that Bang & Olufsen developed in order to direct the growth of
company and before that to bring on track profits of the company that reduced to 20% in a time
span of two years. This case study involved several elements and directions for strategy of the
organisation and this is why this case study helped me in increasing my knowledge and along
with that in enhancing my knowledge. This is because completion of module one along with
understanding and analysing required research and through this research I was able to understand
impact of different strategies and strategic directions on the company and their growth I also
became able to understand challenges and barriers of implementing different strategies and
following strategic directions. The strategic directions that were adopted and implemented by the
company were product development. In this strategy they focus on increasing product
development and adding new characteristics and features in the products. Company also focused
on innovation and technological adaption. This became important for company to focus on the
product development as previously company was also functioning on the basis of the product
development strategy and this strategy and development of product contribute significant part in
revenue of the company. Along with product development company also focused in reducing its
cost by developing own technology and along with this created one technological digital
platform for all its products and services in order to reduce cost and efforts of maintaining
different technological digital platforms.
In analysing and understanding the case study it was identified that company adopted
development of new products but reduced its focus on few product category. This means

company mainly focused on audio and video products and eliminated further development of
mobile phone, MP3 players and DVD. However, this decision of the company was apt because
market for these products was reducing and concerned with mobile phone its market was
increasing but company kept its focus on audio and video product. This was beneficial as this
allowed improving quality of the product and company was able to create more products. This
strategy of the company was considered as turnaround strategy and its name was Pole Position.
In this strategy focus of the company was on profitability and centred was on product range.
With help of research it was identified that challenges that might affect success of this strategy
were availability of technological resources and supplier. This is because company focused on
adding technological value to its products and in doing so technological resources and
technology suppliers play important role. One of the elements is that by adopting this strategy
company’s customer range gets reduced because it stopped development of mobile phone.
Mobile phone and development in mobile phone have several possibilities and opportunities for
the company. This is because this market is ever growing and later mobile phone market
increased to a significant extent. In this company also had capabilities to innovate and provide
high quality products and this was a favourable element for the Bang & Olufsen. Further in this
module I analysed environment of Bang & Olufsen. In this external and internal environment
were analysed. External environment were analysed with help of PESTLE framework. This is
one of the most effective frameworks that is used for analysing external environment. In this
analysis it was identified that factors that significantly can affect Bang & Olufsen are social
factor. This is because social factor of the company involves society and consumers and
consumers of the company are getting more and more complex due to frequently changing trends
in consumers. Especially with increasing technological availability and advancement it has
become very difficult to identify and understand consumer trends on time. This is important so
that company can prepare it and implement required changes. However this factor along with
being challenging and difficult to deal also provides several opportunities. Other than this
technological environment is also important for Bang & Olufsen because it also provides several
opportunities. Challenges in this are related with advancement of technology which requires that
either company is capable of following on time or is ahead of the advancement so that it can get
long term competitive advantage. Following on the right time will allow company to sustain and
survive in competition. On analysing case study it was identified that Bang & Olufsen has

innovation and technological capabilities and on the basis of this it can stay ahead of competition
by producing products for the first time that are high in quality and at the same time this will
allow company to get the benefit of first mover. External environment analysis also suggested
that environmental factor is also important and challenging because concern for sustainability
and safety of the environment is increasing and this requires that company operate in favour of
the environment this is important for its image as well as for environment.
Later module also involved internal analysis and some of the strengths that are possessed by
Bang & Olufsen involve its brand image and innovation capabilities. This can be used by the
company to sustain in competitive environment also to get competitive advantage for the
company. Along with environment analysis model also involved analysing impact of strategies
on company on its corporate level and at business unit level. Discussion of this informed me
about Strategies and how they make impact on different level of the company. Analysis equipped
me with knowledge of Strategies and strategic management how strategies are linked with
objectives of organisation and how they are disseminated in various level and functions of
organization. Strategy that was developed by Bang and Olufsen was concerned with product and
cost and discussion I identified several impacts that strategy will have on corporate level of
company and business unit level of company.
In module I analyse and discussed about various strategies among which Bang and
Olufsen adopted combination of strategies that are based on product and cost. While analysing
and studying about strategies that organisation can adopt I also get to know about some other
strategies that organisation can adopt and implement. Concerned with this theories have been
developed and along with porter’s generic strategies include strategies for organization that are
based on ghost and product quality. Studying this theory I understood that cost strategy for
organisation emphasis on lowest possible cost where is product quality and differentiation
strategy focus on highest possible quality and differentiation of the product.
In order to develop strategies at corporate level Ansoff matrix provide different strategies
that can be adopted implemented by company. Strategies of incidence Matrix are based on
development of market and development of product. Strategies of Ansoff metrics are suitable
different organisational situation. During completing the module I realise that Bang and Olufsen
adopted product strategy at corporate level and from porter’s generic strategies they adopted cost

strategy. However focus on cost was not to get lowest cost because company is high end product
provider and it is not possible for company to get lowest possible cost. On the basis of this
module and practices and activities undertaken it can be concluded that it was very helpful for
increasing knowledge regarding strategy and strategic management. Impact of strategies at
various levels of the organisation and how environment analysis contributes in developing
strategies of the company were also understood by me because of completing this module.
Strategies are based on environment analysis and this was one of the reason that module
involved identifying factors of environment that are affecting Bang and Olufsen and its business
success.
CONCLUSION
On the basis of above discussion and analysis of case study it can be concluded that
strategies regardless of at what level they are planed and developed have impact of different
level of the organisation. Strategy that was developed by Bang & Olufsen also had impact on
different levels of the organisation among all the levels corporate level and business unit level
were discussed in above analysis. Corporate level involves highest level of business that consist
all the products and business of company and business unit level is concerned with operations
and activities of particular business of the company. Later, this discussion also included analysis
of environment in which external and internal environment were analysed of Bang & Olufsen.
External environment was analysed with the help of PESTLE analysis and Porters’ Five Forces
Model whereas internal environment was analysed with help of SWOT analysis. On the basis of
external environment analysis it can be concluded that technological and legal environment are
getting more unpredictable and this is why possess threat for company. Internal environment
analysis suggests that company has high capabilities for innovation and along with this some of
more strengths and opportunities it will be able to sustain in competitive advantage and also will
deal with challenges of external environment.

REFERENCES
Books and Journals
Arasti, M., Khaleghi, M. and Noori, J., 2017. Corporate-level technology strategy and its linkage
with corporate strategy in multi-business companies: IKCO case study. Technological
Forecasting and Social Change. 122. pp.243-252.
Bundgaard, A.M. and Huulgaard, R.D., 2019. Luxury products for the circular economy? A case
study of Bang & Olufsen. Business Strategy and the Environment. 28(5). pp.699-709.
Furrer, O., 2016. Corporate level strategy: Theory and applications. Routledge.
Galpin, T., 2019. Strategy beyond the business unit level: corporate parenting in focus. Journal
of Business Strategy.
Isabelle, D and et.al., 2020. Is Porter's Five Forces Framework Still Relevant? A study of the
capital/labour intensity continuum via mining and IT industries. Technology Innovation
Management Review. 10(6).
Lewis, R., 2017. Porter's Five Forces of competitive advantage.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
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Sarsby, A., 2016. SWOT analysis. Lulu. com.
Seifzadeh, P. and Rowe, W.G., 2019. The role of corporate controls and business-level strategy
in business unit performance. Journal of Strategy and Management.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.