Two investment bankers Dana Messina and Kyle Kirkland purchased Steinway and Sons, a New York piano manufacturer company for $100 million. It is their task to decide whether Steinway should continue it’s high-end, niche strategy of premium pianos, or to expand their current line of pianos to further grow their revenue. As Dana and Kyle step further into turning Steinway and Sons to a successful profitable business, they are faced with several existing issues that first need to be addressed for them to succeed.
Dana and Kyle will want to continue to produce the mid-priced Boston line of pianos to gain market share since sales increased from 2.7 million in 1992 to 16.7 million in 1994. Steinway and Sons, would benefit from tapping in to the Asia market which has an upward demand for pianos and presenting them with the Boston line which is not only economical but affordable compared to their rival Yamaha and Kawai that are produced in Japan, furthermore they may want to create a plant in China or Thailand and by doing so labor costs would be cheaper and heavy shipping costs would be eliminated. In addition, Dana and Kyle must consider updating their technology and manufacturing practices along with creating an electronic piano which is proving to become increasingly popular with the younger demographic, this will allow them to have a large gain with this age group and create brand loyalty from an earlier age.
While continuing with their high-end products as well as introducing a mid-priced line, Steinway and Sons will be able to reach more of the markets demand. Also by expanding their current product line, Steinway and Sons are creating a selection that offers diverse, innovative and affordable pianos. By doing so, it will increase sales, market share, profitability and customers. The company will be from the first few to be updating all the new changes in this down fall of the piano industry so it will be able to capture a large...