Problems That Epiphone Faced

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1.1 The competition with Gibson and the failure of recording guitars Epiphone had introduced the recording series of guitars at the height of banjo boom in 1928. Although the market was certainly ripe, the recording guitars were not successful accepted by the market because the recoding guitars was lack of celebrity endorsement and the volume of recording guitars was too small and arguably too ornate if compared to the mighty size and volume of the Gibson L-5. Epiphone took the concept of the Gibson L-5 as the inspiration of the new product, Masterbilt Series, but Masterbilts had their own identities. Their intention was to destroy it but not to imitate the Master Model. After that, Gibson returned fire by increasing the body width of its existing models and introducing the king-size Super 400. Once Epiphone launched out a new product, Gibson would introduce another product to counterattack. We found that Apple Inc also faced the same problem with Epiphone. At the time Apple Inc launched out the iPhone 4S, it enjoyed to become the foreground of the public attention. Many people discussed about the iPhone 4S and awaited it imported into their country. However, the introduction of Samsung Galaxy S3 brought a danger to iPhone 4S’s sales. In order to protect the market share, Apple Inc kept on improving and a new product, iPhone 5 produced. There is a phenomenon that once the news of Apple’s new product is announced, the sales of Samsung’s product will become flat. Thus, Samsung and Apple keep launching new models of smart phone to keep the reputation and sales of their products. (CNET News, 2012)

1.2 The rise of foreign-made guitars
The early to mid-1960s were the boom time for Epiphone. However, the rise of foreign-made guitars had given a heavy strike to the US industry. It had caused the market share of the Epiphone/ Gibson decreased by 40% and many companies which couldn’t deal with this problem had closed down entirely. In addition to the fall in sales, the resignation of the Gibson manager Ted McCarty gave a great impact to the quality of the product. All of the problems arrived in a quick succession. In 1969, Gibson’s parent company CMI was purchased by the Ecuadorian ECL Corporation which was the manufacturer of beer. The idea of moving Epiphone production to Japan had actually floated before the ECL takeover. However, the crisis was not solved until 1976 Epiphone introduced a number of new models including a series of scroll-bodied electrics. By 1979, Epiphone product list was gathering speed, with over 20 steel-string flat tops, and plenty more besides. To sum up, Epiphone overcame the problem of the competition of foreign-made guitars by improving the quality and producing speed at 1976 and 1979.

According to the Joint Organization Data Initiative, Russia was once the world’s largest oil producer but Saudi Arabia overstepped it in June 2012. Saudi Arabia’s oil output rose 3 percent to 10.1 million barrels a day in June from May as it exported the most in a month since November 2005. Although Russia pumped more 0.1 million barrels a day of oil than previous output, which is 9.9 million barrels, it still could not retain its world ranking. The reason why Saudi Arabia could overtake Russia as the world’s largest oil producer was because Saudi Arabia has rich oil deposit and it adjusted its speed in producing the oil.( Business Week, 2012)

1.3 Financial problem
Epiphone was handed down to Orphie and Frixo along with the death of their brother, Epi. They were respectively responsible for the financial and mechanical running of the operation. At the initial stage of the two brothers worked together, everything seemed to be business as usual. Epiphone continued to fight with Gibson and its guitar still popular among the players. Unfortunately, the cracks soon appeared. There were some clashes of view between Orphie and Frixo. In 1948, Frixo decided to sell his share to Orphie and withdrawn from the...
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