Douglas Hentges Austin Mapes David Murdock Cindal Peterson
Molly Redden
Slide 2
Plated an important role in society Without the electric guitar
society may be very different Birth of Rock and Roll The music we
know today would be very different if were not for companies like
Fender Music Innovation The Introduction of the guitar allowed
music to have a new front man of sound
Slide 3
negative profit growth with the recent flux of the economy.
Barriers to entry of any market are always an issue Intensity of
competition between firms is high The degree of product
substitutability The technological sophistication in the musical
creation industry is moderately high. Management capability in this
industry is very low
Slide 4
Slide 5
Harman International Yamaha Corporation Gibson
Slide 6
Harman-Kardon Founded in 1953 by Sidney Harman and Bernard
Kardon Harman manufactures and sells high-end audio products and
electronic systems for the home and automobiles During the mid
1970s the company was the leader in the U.S. stereo industry
Slide 7
In the early 80s more than half of Harman was sold to a
Japanese company The company began to fail, so Sidney Harman and
other investors gathered $55 million to repurchase the company This
purchase created Harman International Industries In 1986 the
company went public on the NYSE
Slide 8
Through restructuring management and new acquisitions, Harman
International regained its status as a top competitor in the
industry 3 main strategies: Manufacture all products in
company-owned facilities Market products globally Honor and treat
all employees with complete respect
Slide 9
1983 UREI and Infinity 1988 Soundcraft 1990 DOD Electronics
Corp 1995 Becker GmbH and established Harman China In the 1990s and
2000s established many associations with vehicle manufacturers.
They also have associations with Apple, Dell, Compaq and IBM for
computer audio equipment.
Slide 10
Current CEO Dinesh Paliwal Headquarters moved from Washington,
D.C. to Stamford, CT New engineering center in Bangalore, India
2009 net sales totaled $2.9 billion
Slide 11
Yamaha Organ Manufacturing Company founded in 1889 by Toraksu
Yamaha 8 years later YOMC became Nippon Gakki In 1902, Nippon Gakki
manufactured its first grand piano During the World Wars, the
company expanded its product line to plane propellers, fuel tanks
and wing parts They entered the electronics industry in 1959 with
an all-transistor organ Nippon Gakki changed its name to Yamaha
Corporation in its 100 th year of operation
Slide 12
Since 2004, sales have not fallen below $4 billion and in 2008
reached almost $5.5 billion 2009 net sales totaled $2.9 billion
Stock price is currently around 10.50 Forecasted total expenditures
for fiscal year 2010 = $205 million
Slide 13
Headquarters are in Hamamatsu Shizuoka, Japan Current President
and Representative Director is Mitsuru Umemura 20,068 employees,
106 subsidiaries and 12 affiliated companies
Slide 14
Founded by Orville Gibson in 1902 in Kalamazoo, MI First 5
stockholders were Orville Gibson, three lawyers, a music teacher
and a salesman The company introduced the solid body guitar when
Les Paul partnered with Gibson in 1946 The company began to fail in
the 1980s Its recovery can be credited to Henry Juszkiewicz
Slide 15
New technology cost the company almost $500,000 New management
strategies to implement updated data-processing systems Juszkiewicz
marketed the fact that most of Gibsons employees are musicians
Slide 16
Purchased Baldwin pianos in 2001 Cooperate with U.S. Fish and
Wildlife Service regarding wood procurement Focus on
environmentally-friendly wood purchases
Slide 17
Fenders specific product line makes Harman and Yamaha less of a
threat Fender has larger market share than Gibson and higher annual
sales Fenders reputation in the industry and the quality of its
instruments exceed the 3 competitors
Slide 18
1938: Clarence Leo Fender opened Fender Radio Service 1945:
K&F Manufacturing Corporation was born (Fender and Clayton
Kauffman) Year later Kauffman leaves and becomes Fender
Manufacturing Corporation 1949: Prototypes for Fender Esquire,
Broadcaster and Telecaster were completed, and introduces the
single-pickup Esquire the next year Over next four years the worlds
first electric bass guitar was created (the Precision Bass) and
several other guitars were established and sold
Slide 19
1954: Fender Stratocaster (most popular) 1965: Fender was sold
to Columbia Broadcasting Systems 1981: William Shultz named
President 1985: Fender bought back and renamed Fender Musical
Instruments Corporation 1991: Founder of Fender dies of Parkinson's
disease 2005: Bill Mendello named CEO Today, Fender is the leading
maker of solid- body electric guitars with an estimated 50% of the
U.S. Market
Slide 20
Currently has 12 subsidiaries 1965-Fender acquired Squier
1995-Guild Guitar Company 2002-Acquired Jackson Guitars
2002-Acquired Gretsch 2003-SWR Sound Corporation 2004-Tacoma
Guitars Finally, 2007 acquired Kaman Music Corporation
Slide 21
Est. in 1978 Supplier of Fender in the Southern Pacific
Expanded to include Jackson, Gretsch, Guild, and SWR amplifiers
Staff of authorized service technicians, and technical experts
Slide 22
Est. in 1982 Consists of Yamano Gakki and Kanda Shokai (the 2
companies) Musical instrument wholesalers Yamano has retail outlets
Shokai only distributes though other company retail outlets 3 main
Japanese manufacturing factories Fujigen Gakki, Tokai, and Dyna
Gakki Fender chose Fujigen, but in 1997 Tokai and Dyna Gakki took
over Some of the Gakki guitars that are manufactured are exported
but none of the Tokai guitars were are exported
Slide 23
Est. in 1997 Premier manufacturer of Fender guitars who
services all of Europe, Africa and the Middle East Factory has
average of 63 employees Logistics and distribution costs soared
Two-stage plan that included ending partial shipments, and only
shipping in bundled packages Worked with transportation companies
and merged into new warehouse (two existing ones) in Netherlands
2007: Started manufacturing Taylor Guitars Cheaper and targeted
lower income families
Slide 24
Distribution center in California All products sold around the
world pass through here All products are labeled, inspected, bar
coded, weighed, and scanned before being shipped off
Slide 25
5 Rules for Fender distribution: 1.) Have everything in stock
2.) Offer everything at fair price 3.) Provide same day shipping
4.) Offer reasonable credit policies to dealers 5.) Provide
after-sale service In 2003 moved into a larger plant in Ontario,
California Better technology and improved production accuracy and
efficiency
Slide 26
Automated Factories Transitioned from hand-crafted to automated
Product Cycle Patents Failure to obtain a patent for the
Stratocaster Components Wood Metal
Slide 27
Neck Fret Board Body Strings Frets Truss Rod Tuning Keys
Slide 28
Partnered with Greenpeace Music Wood project Developing Green
facilities and distribution systems
Slide 29
Headquarters Scottsdale, Arizona Main Production Plant Corona,
California
Slide 30
England France Japan Germany Mexico Spain Sweden The
Netherlands
Slide 31
2007 Musical Instruments Manufacturing Industry 550 firms 1 st
Yamaha $4,795,000,000 4 th Fender $ 672,000,000 5 th Harman $
560,600,000 9 th Gibson $ 325,000,000 The top twenty manufacturers
earned total revenue of $20.1 billion
Slide 32
Slide 33
2006 Leading Musical Product Suppliers 1 st Yamaha 9.37% 2 nd
Harman Professional 6.54% 3 rd Fender 5.62 % 6 th Gibson 2.88%
These market shares are based on sales by the top 125
suppliers.
Slide 34
Deprecation of the Dollar Foreign Products Cheaper Yamaha New
vs. Old Products School Programs
