Sustaining the Magic at Bang and Olufsen
Z01_JOHN2020_09_SE_EM20.QXD
10/13/10
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CASE STUDY
Sustaining the magic at Bang & Olufsen
Thomas Gulløv Longhi and Frank Brandt Kristensen
In the past, Bang & Olufsen (B&O) has managed to adapt to changing market conditions mainly by launching new products with the best available technology and a unique design. In 2007, B&O faced a dramatic downturn due to the global financial crisis and at the same time experienced a paradigm shift in the market with the main drivers based on digital and networked technology. New management, installed in 2008, changed the structure and introduced a new strategic plan, improving efficiency and enhanced product development whilst retaining the focus on B&O’s core competence of unique design. This case explores the sustainability of the new strategy in a technology-driven market with major competitors which develop their own technology, often dictating the technology standards of the market.
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Bang & Olufsen (B&O) was founded in 1925 in Struer,
Denmark and it is considered to be one of the most important Danish design icons and an important part of
Danish industrial legacy. B&O is a well-known global brand with a strong focus on design and high-tech solutions in televisions, music systems, speakers and multimedia products. The company dominates the high-end luxury segment where customers expect exclusive design, quality, and new technological solutions. In 2008, B&O was listed in the Top 20 Cool Brands as number 4 below Aston Martin, iPhone and Apple.
However, between 2007 and 2009, B&O lost 20 per cent of its turnover and the main markets of Germany, Denmark and Great Britain suffered in particular. The main reason for this can be explained by a lack of new successful product launches combined with the economic implications of the financial crises that emerged in 2008. Normally, new products launched within the previous 12 months correspond to approximately 25 per cent of
10/13/10
9:10
Page 669
CASE STUDY
Sustaining the magic at Bang & Olufsen
Thomas Gulløv Longhi and Frank Brandt Kristensen
In the past, Bang & Olufsen (B&O) has managed to adapt to changing market conditions mainly by launching new products with the best available technology and a unique design. In 2007, B&O faced a dramatic downturn due to the global financial crisis and at the same time experienced a paradigm shift in the market with the main drivers based on digital and networked technology. New management, installed in 2008, changed the structure and introduced a new strategic plan, improving efficiency and enhanced product development whilst retaining the focus on B&O’s core competence of unique design. This case explores the sustainability of the new strategy in a technology-driven market with major competitors which develop their own technology, often dictating the technology standards of the market.
●
Bang & Olufsen (B&O) was founded in 1925 in Struer,
Denmark and it is considered to be one of the most important Danish design icons and an important part of
Danish industrial legacy. B&O is a well-known global brand with a strong focus on design and high-tech solutions in televisions, music systems, speakers and multimedia products. The company dominates the high-end luxury segment where customers expect exclusive design, quality, and new technological solutions. In 2008, B&O was listed in the Top 20 Cool Brands as number 4 below Aston Martin, iPhone and Apple.
However, between 2007 and 2009, B&O lost 20 per cent of its turnover and the main markets of Germany, Denmark and Great Britain suffered in particular. The main reason for this can be explained by a lack of new successful product launches combined with the economic implications of the financial crises that emerged in 2008. Normally, new products launched within the previous 12 months correspond to approximately 25 per cent of