steinway_s strategic orientation
DESCRIPTION
ODM presentationTRANSCRIPT
Steinway’s Strategic Orientation
Group 5Team Members:
Selene
Sabrina R48021053
Liz
Lee
Background
A pianodivision
Public in 1996
Taken private In 1985
First piano maker
About150 yearsold
Steinway εSons
Financial performance
Since going public
Revenues have grown a compounded 6-7% a year
EPS have grown a compounded 11% on average
Market situation
In 2002 Porduced more than 3500 pianos Sales $169 Million ↓7.6% compare to prior year
Because of General economic downturn
Diagnosing
The external Environment
The internal Situation
Piano’s segment
Grands pianos– Smaller– Higher-priced– 50,000 grand pianos were sold in 1995
Upright pianos– inexpensive– 550,000 upright pianos were sold in 1995
Piano Customers’ segment
Professional artists
Amateur pianists
Institutions, such as:– Concert halls– Universities – Music schools
Market situation and New opportunity
Upright piano sales about 90% to private (home) market
Grand piano sales about 80% to institutional customers
New markets in Asia is become important of the growth opportunities.
Competitor-Baldwin Piano and Organ CompanySteinway’s primary U.S. competitor
Offer a full line of pianosHigh-volume with upright pianosAlso makes handcrafted grand pianos
Good brand
over 700 dealers
Annual sales are about 100 Million
Asian
Several Asian companies have emerged as important competitors.– Young Chang and Samick ( in 1995)
Have 35% upright pianos market & 80% grand piano market (units)
Have 75% of global sales in 1995
– Yamaha Through continuous improvement to produce consistent
piano quality Yamaha has been able to compare and compete with St
einway.
Internal situation- The Steinway Organization
Boston (Less expensive)
Steinway
(High value)
Over 85% pianos are sold through their independent dealers
more than 200 dealers, and half are in North and South America
Have 7 Retails outlet America , England and German
Internal situation- Steinway’s important strategy
Play an important role in the “Concert band”– Provide over 300 pianos in more than 160 cities.– Invite the professor artists to become part of their
elite group.– The member of elite group could try any different
pianos and pick one for use in the concert hall but just need to pay for the bringing cost.
– Use the performer’s name for publicity purposes.
Internal situation- Challenge
Creating a Steinway concert grand piano– Art: more than 12,000 mostly handcrafted parts – Intricate: 120 technical patens, each instruments
is unique– Time consuming: about 2 years– Costing high: reject about 50% of the lumber
Opposed: – Takes only about 20 days to produce a piano– Only 3 major steps in the production process
Wood drying, parts making , piano making