MBA Program - 2nd year
Case Bang & Olufsen
It seems important to begin this case analysis with a evaluation of the company in order to underline some of the key points to keep in mind for this case. Appreciated
First of all, we can say that Bang & Olufsen have developed, through a differentiation by the design, a sustainable competitive advantage in the high-tech audiovisual market which have allowed the company to increase the willingness to pay of the customers. Normally, this solution, the design-differentiation, should not have last or generate this increase but this is where B&G has done great by developing the design to the point of it has become the core competency of the firm. Every function of B&O (supply chain, manufacturing/quality...) gravitates around the design function. Thus, such as Toyota, B&O has succeeded to developed a operations-based strategy quite impossible to reproduce because based on a philosophy.
Secondly, it is interesting to note that B&O has tried to reach the last phase of the Sand Cone
The company, which deliver a great quality (long product lifetime, handwork manufacturing), has a good flexibility (specialized workers, integration of top-technology by the engineering department) and is relatively fast regarding its products (delivery in 5 days, concentration of the resources, accelerating cycles), is now looking for cost-reduction. As we can see it in the documentation, the reduction of the number of employees (which had surely helped to increase profits) and the implantation of a new factory in the Czech Republic have probably been decided in that perspective.
Now that we have defined what we consider as the key points of this case, it is time to think about the critical issues B&O is facing.
Concretely, B&O is a producer of high-tech audiovisual products with great...