Case study 1.4 Steinway & sons
Internationalizing the piano business
Steinway & sons(www. Steinway.com)
remains one of the best-
known producers of concert pianos in the world . throughout the course of its 150-year history the company has shown a distinctive talent for innovation and quality workmanship as evidenced by its 120patents .in an age of mass production Steinway continues to build a limited number of handmade pianos .
Steinway & sons was founded in 1853 by German immigrant Henry Engelhard
Steinway in Manhattan . Henry was a master cabinet maker
who built his first piano in the kitchen of his Self home in Germany .By the time Henry established Steinway & sons he has built 182 pianos .The first piano produced by the company , number 483 ,was sold to a New York family for $500.It is now display in New York City’s Metropolitan Museum of Art.
By 1860 Steinway & sons had built a manufacturing facility at 52nd Street and Fourth Avenue. Here 350 men produced 30 square pianos and five grand pianos per week . In 1864 the firm opened a showroom on 14th Street, In 1865 sales topped $1,000,000.
From the beginning Steinway & sons faced intense competition from rivals such as Chickering & Sons and Mason & Hamlim in the United
States competition ,the firm sought to highlight not only the unique construction of the Steinway piano but its superior sound .
Music historians consider the competition at the 1867 Paris Exhibition the turning point in the piano industry because it was there that the ‘American’ system of cast-iron frames ,heavier strings, solid construction and more powerful tone took the competitive honours from European pianos .The jury awarded Steinway the prestigious Grand Gold Medal of Honour ‘ for excellence in manufacturing and engineering .With this recognition , Steinway’s domestic piano sales and exports grew rapidly. requiring greater production capacity .In 1870 the firm purchased 400acres of remote farmland in Queens with the idea of moving the factory from Manhattan . By 1873 the new factory was operating . Virtually its own town , Steinway Village had its own foundries factory ,post office , parks and housing for employees .In 1875 the firm opened a showroom in London .In 1885,to built an early global presence ,the firm built a factory in Hamburg Germany .Piano manufactured there were marketed in Europe and exported to the rest of the world .Today these two factories remain the firm’s only manufacturing centres Steinway had s steady growth until the world economy entered a depression the 1930s and the firm’s survival was at strake .To market pianos to people of more modest means ,
with smaller homes , Steinway
developed and introduced two new models –the 5ft lin-baby grand and a
40-in upright piano .At the outbreak of the second world war ,production was stopped.
In the 1960s new competition emerged from Asia. Yamaha and Kawai began exporting thousands of pianos to the United States .A Yamaha piano sold for about one-half the price of the equivalent size Steinway model . By the early 1970s the Japanese threat raised questions about the future of Steinway & Sons and entire US piano industry .
In 1972 the firm was acquired by CBS and merged into CBS Musical Instruments Division .CBS sold
Steinway & Sons and the rest of its musical instruments division in December 1985 to John and Robert Birmingham, two brothers from Boston who had made their fortune through a family-owned heating-oil business.
In 1991 Steinway & Son introduced a new line the Boston pianosdesigned to compete in the midrange piano market. This line was designed by Steinway & Sons and manufactured at Kawai's factory in Japan. Steinway dealers had suggested that a logical step-up strategy to a Steinway piano was needed. The availability of many competent lowerprices pianos made making a Steinway sale to a novice pianist harder to justify.
Kawai is the second largest piano manufacturer in Japan after Yamaha....
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