Harvard case study- Steinway and Sons

Steinway & SonsCASE STUDY

Statement of the Problem:

Steinway & Sons faced a declining piano marketand increased competition from Asia pianomanufacturers.

Background:

In 1995 two investment bankers buy legendary piano manufacturers, Steinway & Sons for 100 million dollars.

Steinway grand pianos

Steinway vertical

Boston pianos

0 500 1000 1500 2000 2500 3000

2698

600

2300

Sales

Background (Contd.)

In 1995 two investment bankers buy legendary piano manufacturers, Steinway & Sons for 100 million dollars.

Background (Contd.)Shortly before the company changed hands Steinway & Sons began to market an introductory line of pianos under the Boston brand name

Discussion:

The new owners of Steinway & Sons will face a worldwide market that is in decline due to the prevalence of electronic keyboards and other more modern forms of entertainment.

Discussion (Contd.)

Steinway & Sons will also have to deal with increased competition from Japanese manufacturers, especially Yamaha.

Discussion (Contd.)The Boston brand pianos were manufactured under contract by a Japanese firm and in no way reflected high standards associated with Steinway & Sons.

Discussion (Contd.)The new ownership of Steinway & Sons will have to decide whether to focus on the high-end piano market or continue to try to tap other markets as they have began to do with the Boston line.

Recommendation:

Scrap the Boston line and start another midline effort that focuses on the quality that customers expect from Steinway & Sons

Recommendation (Contd.)In order to counteract Yamaha’s entrance to the high-end market, begin a marketing campaign focusing on institutions and private consumers reinforcing the ideasthat a Steinway & Sons grand piano is the piano of legends.

SWOT ANALYSIS

STRENGTHS• The brand name has been recognizable with

music for 100 years• Different model pianos for different kinds of

people and places• Highest quality in the piano market• Stores in North and South America, Europe,

Asia and Africa

WEAKNESSES

• Saturated market• Major Competitor is their own used pianos• Other strong music names moving in on

declining market share

OPPORTUNITES• Use name to push other music products • Lower prices and cut in on competitors• Have new famous composers represent

Steinway

THREATS• Japanese made pianos• Technology, rise of the electric

piano• Decline in demand

CONCLUSIONIn conclusion Steinway & Sons is the best

known name in high-end pianos. Steinway & Sons just need to take another look at their marketing campaign. They need to take advantage of the fact that fine artists such as Duke Ellington, Vladimir Horowitz, Cole Porter, Arthur Rubinstein and many more use their products. When you connect a superior product with a well known name the product is going to sell.

CONCLUSION (Contd.)As for the Boston line Steinway & Son should eliminate the product all together. They need to get their team together and start from scratch to develop the highest quality product with their most limited resources. If theydo not cut any corners and really develop the product to last they can begin a medium budgeted piano line.

DISCLAIMER

Created by Aparana Gupta, during a marketing internship under the

guidance of Prof. Sameer Mathur, IIM Lucknow

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