Steinway & Sons has been in business for over 140 years selling grand pianos. Steinway is almost synonymous with the word piano. The emphasis has been on their skilled laborers, high end quality, hand crafted grand pianos, and impeccable sound.
The Steinway grand piano is constructed as a subsystem of a lager system. Management and operations specifically focus on the raw materials, hand craftsmanship, and technology which ties in with their niche brand. The Steinway grand piano has been marketed to elite demographics including famous artists and musicians from around the world.
This case study describes how only 10 pianos a day or 2,500 a year are produced in their New York Factory. Steinway & Sons management have proven themselves in a niche market with limited supply, and high demand for grand pianos costing between $45,000 and $110,000.
The cost of the Steinway is tied closely to their financial department. The finance team is responsible for the purchasing of the high end materials, making sure they keep up with paying their business partners who sell Steinway the materials. The finance department also has to keep a check on their cash flow in order to pay the laborers and ensure there is no delay in releasing orders to be shipped.
Management is responsible for the highly skilled laborers training, which can take about a year to train a Steinway case maker, and to ensure the high end quality standards are followed through from start to finish with their production team. Management also has to manage the pipeline of orders. Management works closely with the Sales/Marketing department to keep abreast of the changing market conditions and demand in this high end niche market. Sales of the Steinway grand piano is important for the company’s cash flow which ultimately ties in with the production team responsibility to deliver a well-crafted product.