...Steinway and Sons Presenters Team 02 MKTG 445-02 Ashley Sides Derek Moss Andrew Wyatt Lindsey Brooks Jason Bryant Lindsey Brooks Table of Contents Executive Summary 3 History 4 Industry Trends 5 Industry Competition 6 Target Market 7 Marketing Strategies 8 SWOT Analysis 10 Conclusion 11 Executive Summary Problem: As a result of the declination of sales in the piano industry, Steinway and Sons needs to find a way to uphold its historical brand reputation while gaining market share world wide and using innovative technology; particularly in the Asian Market Background: In late 1994, Steinway and Sons was yet again a company on the market to be sold. For their own personal reasoning, the Birmingham brothers decided to sell the piano manufacturer. On April 18, 1995 Kyle Kirkland and Dana Messina, already controlling multiple firms, decided to make the purchase. The investment bankers purchased the New York piano manufacturer for an incredible $100 million. Discussion: The piano industry has been in rapid decline over the past 2 decades and in particular, Steinway and Sons has taken a hard financial hit. Global sales of the industry have dropped 40% over the past 24 years and with the introduction of major industry competitors, Steinway and Sons have continued to struggle. In addition to the negative impact of these industry trends, Steinway and Sons introduced...
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... Strengthening? Weakening? How do you know? Steinway and Sons has been recognized as the market leader for high-quality grand pianos. The firm had prospered due to its technical excellence and innovation (technology) in making these high quality pianos. The firm enjoyed valuable, rare and inimitable resources. It had two manufacturing facilities (infrastructure), one in Long Island City, NY and the other in Hamburg, Germany. The firm produced high-quality pianos using craft method rather than highly automated production lines (operations). This made the product inimitable producing legendary sound and a customizable piano to suit a musician. A musician always found the pianos that could be tuned to their personality and taste very valuable and even granted permission to use their names for publicity (sales & marketing). The labor force (human resource) was highly skilled and rare with each worker working at least 15 years. The manufacturing process (operations) for a grand piano took 2 years, which meant that the process was costly and difficult to imitate. The firm sourced (procurement/logistics) the best quality lumber from all over the world. Steinway had few focused dealers who were committed (service) to Steinway’s product line and leveraged the remaining dealers’ distribution network through partnership programs. (sales and marketing) However, Steinway was constrained by limited financial resources. Making Steinway pianos was highly capital intensive. At any point...
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...manufacturer of High Quality Piano’s? Ans 1: Steinway has a reputation for creating high quality products. The company’s products score very high on 5 dimensions of quality, Performance, Reliability, Durability, Aesthetics and Perceived quality. The factors behind the high quality products of Steinway are 1) Steinway maintained a good relationship with artists, and had a list of approved artists who were eligible for Steinway Concert service under which the company provided pianos at all concerts. Their relations with acclaimed artists helped improve the image of Steinway. Also, Steinway used the talents of these artists as testing grounds for its pianos, which helped maintain the quality. Stenway also sought after gathering testimonials of famous pianists and wealthy patrons who use their products. 2) Steinway employs highly skilled labor, many of them in the business since 2 or 3 generations. The company also offers various training and internship programs to improve the skill level of the employees. Thus, quality handcraftsmanship and innovative techniques were part of the tradition. 3) Steinway works with the best raw materials for its pianos. The company hired wood technologists who would locate fine quality wood from around the world. The emphasis on quality was so high that all weathered wood was discarded, even if it was more than half of the total. 4) Continuous Improvement/Innovation: Steinway has constantly innovated and improved...
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...The construction and assembly of a Steinway Piano involves several different subsystems that in the end when all put together makes up a larger system. A company, such as a production company like Steinway is known to build a good quality product. They have a good reputation on the product that they build, because they have taken the time figure out how to make quality work and use quality material. There is a process in place in order to manufacture and assemble the piano. First of all they just don’t use any wood, they use Eastern rock maple wood to be precise. They start with raw boards to create a rim with specific measurement. Next, a total of 18 separate slat, 14 layers of maple and 4 layers of woods are glued and stacked together to form a book. Then comes the process of bending rim into the shape of a piano. This process could not be done, without a crew, but not just any crew. A crew of six skilled specialized employees that have just 20 minutes to complete the book and they use block and tackle and wooden levers and mallets into a rim bending press. This process is the same process that Steinway & Sons have used for more than a century and is all done by hand and all at one time. With all this hard work, their job does not end there. The company also need other departments, such as a marketing department in order to market their product. The financial department takes care of all the accounting issues. They ensure that the company has the funds to...
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...Evaluation of Acquisition of Steinway Musical Instruments by John A. Paulson The Acquisition Back to the year 2011, the world’s most famous manufacturer of musical instrument, Steinway Musical Instruments Corporation, had begun to considerate the offer to acquisition. Two member of the board of directors, Dana Messina and John Stoner set up the special committee to discuss the acquisition deals. But Steinway turned down the Stoner-Messina offer in 2012,12 and declared that the company was not for sell. Now it’s time to take a fresh look at this issue. Kohlberg & Co. announced that they are going to offer a price of $448 million to take an overall acquisition, and Steinway accepted the $35-per-share Kohlberg proposal. However, at the last days in the 45-day “go-shop” period, a second, unidentified suitor offered a higher price: $38-per-share and $477 in total. This mysterious competitor is John Paulson, a hedge fund billionaire. In the end, Steinway announced that it would be acquired for approximately $512 million, $40-per-share, and the investment firm Paulson & Co. has completed its approximately $499 million purchase of Steinway in Sep, 2013. Kohlberg & Co. refused to increase its offer so Steinway will be required to pay Kohlberg a $13.35 million termination fee. This deal makes Steinway a private company, again. John A. Paulson Born in Queen, now John A. Paulson is one of the top American hedge fund mangers, or maybe the best. Warren E. Buffett...
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...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...
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...New Buyer’s Strategy for Steinway& Sons: “Cash is King” This essay assesses the wisdom of the $100 million acquisition of Steinway by the Selmer Company given the shrinking sales of recent years and the highly-leveraged failure of the Birmingham ownership. One can justify the purchase from four perspectives: the improvement in the financial resources of the new owners, the reconsideration of the marketing strategy, targeting and positioning, the forecasted improvement in Steinway piano sales and the short and long-term corporate financial effects. Steinway & Sons should be able to prosper under the new owners in both the short term and long term based on the inherent strength of the brand as the world’s finest piano, the available financial resources and smart marketing. After four generations of family ownership the company suffered from inadequate corporate oversight under CBS and an overly leveraged balance sheet with Birmingham. CBS focused on cost control at the expense of product quality with the expected results. Birmingham knew nothing about the piano business and were so leveraged that much needed investment was impossible to sustain. Their marketing strategies were an improvement over CBS, but the high cost of capital and poor capital structure were drags on the company. They had little working capital. Average inventory of $75 million showed the huge problems in the company’s operation cycle. Inventory turnover averaged 273 days with around $100million...
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...Abstract This is a question and answer discussion on Steinway Pianos. Discussed will be how the Steinway Piano company set up their system, smaller subsystems and how they use the systems perspective of input, transformation and output. Behavioral and operations management will also be discussed along with the universal and contingency perspective. Steinway Pianos This discussion on Steinway Pianos will be highlighting their processes and how their subsystems and system work together to produce their high quality piano cases. Learn how inputs from their environment, the transformation process and outputs into the environment affect their organization’s system perspective. Discuss the similarities between the behavioral and operations management and Steinway’s processes. Also how the universal and contingency perspective is reflected in the Steinway process. The construction and assembly of a Steinway’s piano is comprised of several different subsystems that all work together to make up a larger system. As with many companies such as a production company like Steinway, there must be a process in place in order to construct and assemble the piano. Along with that the company will need other departments such as marketing to market their product. The financial department ensures all the accounting is done properly and that money is available to purchase more materials and labor so that they can produce more pianos. The management department manages...
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...Date: July 31, 2013 Business Brief In a world of endless technological change and improvement for over a century, ninety percent if the worlds expert pianists have made the Steinway concert grand piano their instrument of choice (Steinway, 2013). Steinway’s reputation among customers is unmatched in the piano industry. The quality of Steinway pianos is the result of the craftsmanship of the piano by skilled workers (Steinway, 2013). Steinway piano’s reputation appears to be depended upon their commitment of not changing the piano at all. The task for businesses today is to please their customers through the incomparable performance of their processes. When a process fails to please a customer, the failure is considered a defect. According to the text a defect is defined as “any instance when a process fails to satisfy its customer” (Krajewski, Ritzman & Malhorta, 2013). Numerous companies spend a great deal of time, effort and expense on systems, training, and organizational changes to increase the quality and performance of their processes (Krajewski, Ritzman & Malhorta, 2013). The concept of Total Quality Management recognizes the importance of customer approval. Total quality management (TQM) is a philosophy that stresses three principles for achieving high levels of process performance and quality (Krajewski, Ritzman & Malhorta, 2013). These principles are related to (Krajewski, Ritzman & Malhorta, 2013): 1) Customer approval 2) Employee...
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...Steinway & Sons Current Situation Steinway & Sons succeed to consistently deliver the finest pianos in high-end market over 160 years. Their grand piano is recognized as the best performing piano in the world. To strengthen the products value, Steinway & Sons also supply the performers Steinway Concert Service. The competitive advantage lies in the innovative R&D and craft manufacture. Typical it takes 2 years to produce a grand piano since the craft manufacture require exquisite techniques from selection of woods to testing the sounds. Steinway & Sons also keep a high innovative spirt striving to extend the piano’s life and refine the sounds. Currently, Steinway & Sons has a simple product mix. It only have one product line carrying two items: grand and vertical pianos. The grand piano can be further divided into Concert D and medium-sized. In 1980, Steinway & Sons obtained a sales of 50% which was 11.79% of market share. Among these, most of profit came from grand piano. Less than 2% of all pianos sold in US were Steinway vertical pianos. Steinway’s operations can be divided into two parts: furniture making and piano making. Resources and labor force were nearly equally devoted to those two operations. The largest raw material expenses came from holding of lumber which was required to dry at the first stage. The furniture making operation involves cutting piano case and sounding board, building the firm fro grand piano, and fabrication of piano actions. Steinway only rely...
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...Steinway Strategic Orientation The main changes in the environment and the Steinway organization since 2002 still involve the economy. Steinway doesn’t operate like a typical organization. The culture of Steinway’s brand is based on tradition and quality of craftsmanship. When many companies were discounting items to entice consumers in a bad economy, Steinway stood by the price of their pianos and their name (Miller, 2010) Steinway never discounts, according to financial writer Nancy Miller, “That's part of the pianos' prestige”. Steinway even laid off one third of their production staff in a New York City adjacent factory (Miller, 2010). Miller also states, Inventory control is only part of Steinway's pricing power. Steinway still has many hurdles to overcome before they are profitable to a point which makes stockholders pleased. Other changes that has occurred since the diagnosis in 2002 is sales. According to financial writer Nancy Miller, in the third quarter of 2010, sales of Steinway’s grand pianos jumped 11%. These sales increases were just in the market in the US. The European market didn’t see any significant improvements. While this was great news for the company, in 2011 shares in Steinway declined by 10%, even though their cost cutting was paying off in revenue (Reuters. 2012. December, 27). “Steinway has struggled to keep its production margins competitive amid stagnant sales” (Reuters. 2012. December, 27). Just when Steinway thinks they...
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...Your student ID _________________________________ Your Name _____________________________________ Your Signature __________________________________ THE UNIVERSITY OF NEW SOUTH WALES Australian School of Business School of Marketing MARK1012: Marketing Fundamentals Final Examination Session 1, 2011 Instructions: This examination paper consists of TWO sections, Section A and Section B; (TWELVE printed pages excluding this page). Printing is double sided, so check each page carefully. You have two [2] hours to complete this examination plus 10 mins reading time Read the questions carefully and answer all questions as instructed. Answer the TWO short essay questions in SECTION 1 in the space provided under each question. Questions must be answered in ink. Write all your MULTIPLE CHOICE answers (SECTION 2) in the Generalised Answer Sheet provided. Note that there are 50 (FIFTY) Multiple Choice Questions. Print your full name and Student number {z… } on the first page of each book and sign Use of UNSW approved calculators is permitted. No other material is to be taken into the examination room. This paper is marked out of 35 as indicated in your Course Outline (35% of the overall course grade) You may NOT retain this pap SECTION 1 (Short Essay Questions) Question No. 1.1 (Answer either A or B) 4 marks A What is the product life cycle [PLC] concept? Draw a typical PLC diagram for a ‘Style’ item in the box provided. B What is meant...
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...Charles John Huffam Dickens (/ˈtʃɑrlz ˈdɪkɪnz/; 7 February 1812 – 9 June 1870) was an English writer and social critic. He created some of the world's most memorable fictional characters and is generally regarded as the greatest novelist of the Victorian period.[1] During his life, his works enjoyed unprecedented fame, and by the twentieth century his literary genius was broadly acknowledged by critics and scholars. His novels and short stories continue to be widely popular.[2][3] Born in Portsmouth, England, Dickens was forced to leave school to work in a factory when his father was thrown into debtors' prison. Although he had little formal education, his early impoverishment drove him to succeed. Over his career he edited a weekly journal for 20 years, wrote 15 novels, five novellas and hundreds of short stories and non-fiction articles, lectured and performed extensively, was an indefatigable letter writer, and campaigned vigorously for children's rights, education, and other social reforms. Dickens sprang to fame with the 1836 serial publication of The Pickwick Papers. Within a few years he had become an international literary celebrity, famous for his humour, satire, and keen observation of character and society. His novels, most published in monthly or weekly instalments, pioneered the serial publication of narrative fiction, which became the dominant Victorian mode for novel publication.[4][5] The instalment format allowed Dickens to evaluate his audience's reaction...
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...Fundamentos del Estudio del Piano, 2a Edición Por Chuan C. Chang 8 de Abril del 2008 Copyright 1991-2008; Ninguna parte de este documento puede ser descargado o copiado sin incluir el nombre del autor: Chuan C. Chang, y esta declaración de derechos de autor. Este sitio Web proporciona lecciones de piano gratuitas, material educativo para el piano, e instrucciones para afinación de pianos. Tu puedes aprender a tocar el piano hasta (¡) 1000 veces más rápido (!) comparado con otros métodos (ver el Capítulo Uno, IV.5). Este es el primer libro jamás escrito sobre cómo estudiar el piano. Por cientos de años, muchos profesores y otros libros te enseñaron que técnica dominar, pero esto es de poca utilidad a menos que conozcas como adquirirla rápidamente, como Mozart, Liszt, etc., lo hicieron. Puedes descargar gratis el libro entero usando las ligas que encontrarás a continuación. ii Información General Fechas de revisión más recientes: Año 2004 Cáp. Uno: II.20 & II.21, adiciones significativas, 25-Ene; III.5, Escalas y Arpegios, adiciones significativas, 25-Ene; III.10, adiciones significativas, 26-Ene; III.20, nueva sección sobre las Invenciones de Bach, 5-Feb; III.5, III.7.d, adiciones menores, 16-Feb; III.4.b, adiciones menores, 3-Mar; III.16.e, nueva sección, 4-Mar; III.5, Escalas y Arpegios, adiciones menores, 5-Mar; agregado III.21, 18-Abr; Cambia mi dirección de Colts Neck, NJ, a Odessa, Florida, 18-Abr; Cambia mi dirección de Odessa, a Tampa, Florida, 15-May; Testimonios:...
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...I. Introduction: A. Introduction: 1. Suggestions from Utzman on approaching this class: a. This is a statutory class—Before reading each section in the textbook, read the code to get a flavor of what it contains. b. Also, read the regulations to get a flavor of what it contains. c. Then, go back and read the code and the regulations after being taught. 2. In tax, everything is income—Then you exclude some thing to get an adjusted income—Then you take deductions to figure out taxable income. II. Identification of Income Subject to Taxation: A. Gross Income: The Scope of Section 61: 1. We need a definition of income because of due process concerns—We need a law that everybody recognizes. 2. WHAT IS INCOME? a. §61 defines gross income as “all income from whatever source derived.” 1) §61 lists 15 specific items that are considered income. b. Cesarini v. United States: The Cesarinis found $4,467 in cash in a used piano purchased by them. 1) The court held that the found money is taxable as ordinary income in the year in which the taxpayer attains uncontested possession of it. 2) INCOME: Treasure Trove: It is considered income in the year that it is reduced to undisputed possession. ...
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