Strategic Analysis of Bang & Olufsen: Impact and Response

This report provides a strategic analysis of Bang & Olufsen, examining the company's adopted strategies and their impact on decision-making and operational activities. The report delves into the 'Pole Position' strategy, discussing its influence on various aspects of the business, including operations, competition, and employee training. It further analyzes the external and internal factors affecting Bang & Olufsen, such as political, economic, social, technological, and environmental factors, along with the company's responses to these factors. The analysis covers the company's strengths, weaknesses, opportunities, and threats, and how these factors shape its strategic positioning. The report also includes a reflection on the strategies discussed, highlighting the challenges faced and the approaches taken to overcome them. The report aims to provide insights into the company's strategic management practices and its ability to adapt to the dynamic business environment.

Strategic Management
1

CONTENTS
INTRODUCTION...........................................................................................................................4
SET 1...............................................................................................................................................4
1Evaluate how strategy adopted by Bang & Olufsen impact the company’s decisions and
activities..................................................................................................................................4
2Analyse the external and internal factors of Bang & Olufsen and how the company respond
to them....................................................................................................................................6
SET 2...............................................................................................................................................8
1Different companies and its analytical solutions..................................................................8
SET 3...............................................................................................................................................8
1Reflection.............................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
2

INTRODUCTION
Strategic management is a process through which the ongoing planning, examining
observing and assessing those operations of the enterprise which are crucial in nature and has
major impact on the final outcomes of the businesses (Rothaermel, 2017). As the surroundings of
business keeps on fluctuating it become necessary to remain updated with factors of business
environment so that accordingly arrangements in advance can be done which can aid in facing
the changes effectively. Bang & Olufsen was founded in 1925 in Struer, Denmark. It is known
for the new designs Danish icons and otter solutions or the electronics. The following report will
discuss the strategy that is adopted by this firm along with the impact it has on the decision
making and other operations. Also, it will be elaborated that how the organisations strategy
assists in the evolution of the plan which will be given in reflection.
SET 1
1Evaluate how strategy adopted by Bang & Olufsen impact the company’s decisions and
activities
Tactics and plans are difficult to design and need close analysis of different organisation
functions as only than such strategies can be formulated which are best suitable for business and
can help in achieving the desired results. Bang & Olufsen has established a good brand name in
its industry and is specifically famous for delivering customers with unique design products. It
deals in the consumer electronics like televisions, music systems speakers and multimedia
products. During the year 2007, it experienced a great fall in its total sales and hence it was
essential for it to make modifications in its working style so that it can regain its actual position.
It was predicted that this fall was a result of its failure to offer successful products in the market
as customers were not much satisfied with same. Another reason behind this fall of revenue is
found to the economic crises that were prevailing in the country (Ansoff and et.al., 2018). To
overcome from this condition a new strategy was planned by the referred enterprise in which was
named as Pole Position. It aims to set specific goals in the firm, which will be achieved by team
efforts. The core capacity of creating new and innovative designs was maintained and it was
ensured that whatever new product that will be launched in the market will be effective enough
in terms of great designs and having innovative features which makes it superior its industry.
The new strategy had great impact on the decisions and activities of business. Some of the
most significant one are discussed below:
3

Created pressure on operation teams – With the change in strategy of business more
emphasis was given on producing better and competitive products that can create its demand in
the market. There are other big players also in the market like Samsung, Sony, Panasonic etc.
which has captured great market share with their offerings. All these has low production cost
which further supported them to earn more revenues as they were able to offer almost similar
products at reduced price. It created issue for Bang & Olufsen as it was investing more on
producing the better designs and marinating the innovation which further added more cost to the
company. it was difficult to control the cost with the new features electronics that were produced
by this brand.
Increased competition – The new strategy of the firm was to introduced the products with
best in field quality features to the products like having great sound technology. But when they
were launched in the market it faced a great competition from the different flat screens and LCD
technology which were emerging in the market. It demanded the designing department of Bang
& Olufsen to work on better designs and applications so that it can improve its brand positing in
the market (Freeman, 2010).
Need for training and development – When the working culture of the referred enterprise
was changed it demanded much of training and development by the employees. It is because to
develop better and more advance products it is important that the work force is trained in the
same manner so that it can contribute in the company’s vision. Regular meetings were held
where the work force was made aware about the mission and goals that need to be achieved and
hence a common working culture was established.
Complex decision making process – The new strategy which was adopted by the company
led to complete change in the organisation structure. It directly influences the business as
decisions now were taken after more analysis and needs to get the approval from many different
departments. It affected the daily operations and make the work more complex.
2Analyse the external and internal factors of Bang & Olufsen and how the company respond to
them
There are different business factors which has direct and indirect impact on the operations of
the organisation. Most of these are not in control of the firm and company has to make or adopt
them in the same way so that it can survive in the industry (David and David, 2013). following
are some of the most common elements to whom Bang & Olufsen respond differently:
4

Political factors – These are the ways in which government affect the working of the
company. there are different laws which are formulated and needs to be followed by the
electronic industry. it includes considering the safety and ethical practices in the in the day to day
operations of the enterprise. In respect to same Bang & Olufsen ensures that they do follow the
various laws that are made by the government so that it can operate smoothly. Also government
support data security which further creates opportunity for the refer to enterprise to grow.
Economic factors – These are the factors that are related to the economic condition of the
nation. It has huge influence on the operations of the business as it has direct effect on the cost of
the company (Wheelen and 2010). During the recession the capacity of customers to spend
reduces and hence in order to manage minimum sales much emphasis has to be given on
controlling the overall cost of the firm. It is because only when the product is affordable by the
general public it can create demand for itself. Also other way in which these elements has
influence the organisation is the competition from the different brands which has affected the
brand positioning of Bang & Olufsen to a great extent. The cited enterprise has worked on its
design a quality standards of product in order to compete with them.
Social factors – With the increase in different options in the market there is continuous raise
in demand by the customer for luxury product. People now focus more on quality and are willing
to spend more if are served with standard products. This trend is widely used as an opportunity
by this brand as it focusses on producing competitive products which are high in feature and cost
equally to the clients. People welcome the new technology products which are better from those
which are already existing in the market and hence this concept is again kept in mind by the
research a development team of the firm. It focuses more on producing what is better instead of
giving emphasis on cost control techniques.
Technological factors – These are the major factors which has great influence on the
operation of the company. electronics market is developing continuously as there is much
advancement in the technologies and applications used in the manufacturing process. Bang &
Olufsen exploit this to maximum as it focusses on improving its current products by adding more
features and qualities. These are made possible by the adopting the changes that take place in the
market in the techniques and hence the competitive advantage is achieved. 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 (Hitt, Ireland and Hoskisson, 2012).
5

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.
Internal factors
Strength – The referred to enterprise is known for delivering the most quality designs and
has made a good image in the market using this as their strength. While formulating the new
strategy this core competency was used and it was ensured that Bang & Olufsen does the brand
positing with the same feature. It helped it in focusing more on the area in which they are already
good at and can use same to attract more customers. While designing the new products
innovation and uniqueness was maintained.
Weaknesses - Bang & Olufsen has the major weak point of dealing in sector that is highly
influenced by the changes that take place in the external environment. Also another weakness
that are faced by this organisation is that while implementing the new strategies it disturbs the
overall structure of the firm. in order to cope u with same company has organised meetings and
orientation programs where the new vison will be communicated to the concern work force.
Opportunities – It includes the potential chances which the organisation has but are not
exploited. Bang & Olufsen can work on adding more variety to its product range which has
greater demand and can increase the total market base for the firm. Apart from this by focusing
on the production department of the firm it can reduce its total cost of operations which are most
important to increase the profit margins. Company in respond to same are making new strategies
through which it can raise its competitive advantage and can lead its total sales (Schilling, 2010).
Threats – The most common danger which Bang & Olufsen or any other business faces is
that of excessive rivalry from the competitors. This organisation has many competitors like
Samsung and other who are coming in the field of electronics with innovative products. They
are capable of capturing the interest of customers which has a negative impact on the market
share of the discussed organisation. In order to cope up with this challenge Bang & Olufsen is
continuously working on its design of products so that it does not lose the loyal buyers and can
maintain sustainability in the market.
6

The above discussion shows that Bang & Olufsen is affected by many factors but has
appropriately responded to all. This way the way overall performance of the company can be
improved.
SET 2
1Different companies and its analytical solutions
Covered in PPT
SET 3
1Reflection
In set one the strategies that are used by Bang & Olufsen were discussed. It was found that
this enterprise in the past years experienced a great fall in its total sales and it was important that
it does some change in the present working so that the performance of the firm can be re
controlled. In order to do same a new organisation structure was made which focuses more on
how to create a productive working environment. in context of same Pole Position strategy
implementation was done (Wheelen and Hunger, 2011). Through this clear code of conduct was
established at the work place which was planned in a way that employees can feel the need and
urgency for the same. According to this the production and research development department
were guided to focus on developing a particular segment of the firm i.e. in the video and audio
products. As the strategy formulated was specific and measurable it was easy to evaluate.
At the end of application of this strategy it could be easily identified that weather
development section of the firm has come up with innovation in the different audio video
products or not. More digital platforms were introduced which shows that the designed strategy
was successful in designing the different domains. It also helped in examine how more work was
done in past where applications for separate offerings were raised separately and this was a time
consuming process. This way the evaluation of the strategy could be done again as the total cost
of the business can be compared that weather by doing the work together company is saving the
cost or not. If it is found that there is no effect on the total expenditure of the company than it can
be said that the new tactic is not effective (Eden and Ackermann, 2013). Also the new strategy
supported the idea of reducing the overall number of partners by just maintaining the long lasting
connection with key stakeholders. The result of this modification can also be evaluated. It is
done by comparing the profit per existing key partner and proper functioning of the different
operations.
7

There must be an increase in the total revenues for them and no issue should rise in the
functioning because of the non-continuation of some members. It shows that how through
strategy itself evaluation can be done which is directly linked to its competitive advantage also.
As effective and unique designing is the core strength of the organisation it was considered while
formulating the new strategies for business. If the sales of the firm increases because of the new
and innovative products that are launched by the form in the market, then the success of the plan
is reflected from it (Moutinho and Vargas-Sanchez, 2018). But this is important that the change
or hike in sale is a result of the competency of the firm and is not influenced by any other market
element. The purpose behind the introduction of new code of conduct was to regain the market
share and fill the gap which occur because of the fall in the sales. the tactics should be well
formulated that targets are achieved with the budget and resources which are allocated with
same. If the desired result is achieved than it can be said that the strategic purpose is achieved
and it should be accomplished without altering the current plans that are already made.
Personal reflection
Understanding business strategies of various companies is important for every student
who wants to start own business or work in a reputed firm. My experience regarding this module
is mentioned below by using Gibbs' reflective cycle:
In this module, I got a chance of working on a case study. It was a great experience for
me as it helped me in learning various aspects about how to understand a case study. Conducting
SWOT analysis helped me in understanding the importance of this tool. Beside getting
knowledge about Bang & Olufsen, I got some new information about SWOT. Earlier, I thought
that SWOT was only for evaluating internal environment of company but this module taught me
that ''Opportunities and Threats'' also cover external factors.
An organisation has many options in terms of adopting strategies. But, it is difficult to
adopt one without analysing the external environment. I used PESTLE analyses in this file for
evaluating the external environment of given organisation. In additional to this, I also did some
research on the response given by company. This module didn't only teach me about Bang &
Olufsen, it basically taught me how the strategies adopted by an organisation impacts their short
and long term decisions.
When I started working on this project, I was very nervous as I am not good in time
management and I had a fear that I may not be able to complete my assignment in given time.
8

This fear came true when I failed to find trusted resources for writing finding relevant content. I
did feel pressured initially but gradually things started getting easy for me as I got help from my
friends. They assisted me in finding in managing my time and gave me few valuable tips. I
started feeling confident after sometime when things started getting in my favour, like getting
relevant sources.
I handled pressure appropriately with time and it helped me in learning new things. If I
evaluate my overall experience of doing this work, then I can say that it was a mix of bad and
good. I was self-encouraged to do more research so that I can give the user most relevant
information. But as the scope of this topic was huge I felt like giving up sometimes. I was
discoursed by the excessive theories and models that needs to be covered as in order to apply
them in the context it required much of detail analysis of all. Therefore, I can conclude in a way
that I have learned that when there is so many information available on the net regarding net then
one which is latest and is supported with the facts should be considered. It helps in increasing the
trust of its users as they can rely on the data provided.
Last but not the last I will be discussing on how I am going to use this learning and
experience in the future. I will be taking more interest in the research products as it helps in
developing my analytical and exploring skills which helps much in understanding the unfamiliar
topics.
As discussed above I found much difficulties in completing my project therefore from now
onwards I would make sure that proper prioritisation of all the work is done well in advance as
only then I will be able to complete my work on time and will not delay like the way I did this
time. I will set small targets through which it becomes easy to meet the deadlines in the long run.
Apart from this I will more focus on identifying the ways through which most authentic data can
be collected as now it was very complex to find out what should be included in the research and
what must be avoided. This way I will not repeat the same mistakes in future when will be
provided with the similar tasks. These slight changes in the present working style may help me in
getting better and effective results.
CONCLUSION
From the above report it is identified that strategic management is effective for an
organisation as it helps business in reaching to next level. It is important that planning regarding
same is done in an appropriate manner so that maximum utilisation of the resources is done and
9

competitive advantage is achieved. Whenever a change is brought in the business it affects the
current working of business and has direct influence on the activities and decisions that are
carried out. Training and development needs arise in such situation as employees need to be
made familiar with new working. This way the resistance to change is reduced and chances of
achieving the targets are raised. Thereafter different factors that affect the business were
identified which includes the political, social strength weakness of the business. Each one of
them has their direct and indirect impact on the business practices. Bang & Olufsen responds
according to the demand of the situation so that no opportunity is missed and all the risks are
managed on time. Lastly, the report concluded with reflective essay in which shows that
evolution of strategy in business is a result of various factors which together influence business
to adopt change.
10

REFERENCES
Books and Journals
Rothaermel, F.T., 2017. Strategic management. New York, NY: McGraw-Hill Education.
Ansoff, H.I. And et.al., 2018. Implanting strategic management. Springer.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university
press.
David, F.R. and David, F.R., 2013. Strategic management: Concepts and cases: A competitive
advantage approach. Pearson.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2010. Strategic management
and business policy. New Jersey: Prentice Hall.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Schilling, M.A., 2010. Strategic management of technological innovation. Tata McGraw-Hill
Education.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
11