BANG & OLUFSENDESIGN DRIVEN INNOVATION

- CASE ANALYSIS

SUMMARY

Established in 1925 by Peter Bang & Sven Olufsen in search of perfect radio

Idea based product of high quality & aesthetics. Products included: TVs, Audio systems, Speakers,

Telephones etc. High Price, Low Volume & High Margins Innovation w/o the fear of failure. Innovators & Designers had the full authority to tweak the

process any time. Two types if stores:

B1 Stores – high rent locations, owned by dealers. 72% Total Revenue

SIS – set in places where B1 was not feasible. 28% revenue.

COMPETITIVE SITUATION

Dealing in only High end products, low volume but having perfection.

Protected against imitators, because its too expensive and too complicated to copy B&O products.

Not targeting mass market, and therefore not facing much competition from big players like Sony.

Targeting only 3-5 % of customers, having passion for excellence.

B&O has catered itself to Niche Market.

COMPETITIVE ADVANTAGE

Enjoys Strong Customer loyalty , 25-30% revenue comes from existing customers.

B &O Products have gained the reputation of Exquisite Products, as some of them have made its way to Museum of Modern Arts, New York.

Unmatched Products with satisfaction.

B&O products lasts for 15-20 years i.e. Non-Comparable with Industry Average of 2 years.

FEAR FACTOR

Constant Innovation and Retention of Customers.

Low Volume Production (20,000/Year).

Currently Targeting only High end segment, in Economic Downturn they might loose the Market.

DESIGN DRIVEN APPROACH

No in-house designer to facilitate unconditional approach

No standard process for design and development, but the collaboration of Designer, Concept developer, Engineer and Technicians

Design is based on synthesis which is the iteration of thesis and antithesis

Ideas are accepted if it has substance followed by the product commitment (Financial and Technical considerations)

Product team will be formed if the product is feasible

Designers remained involved throughout development

Open to changes at any point of production

Most products are made to order, smaller product like phones and accessories are made for stock

MERITS AND DE-MERITS

ADVANTAGES

Effective design and quality

Unique Product

Imitation is difficult

Motivates and freedom to employees

DISADVANTAGES

Incurs more time and cost

Convenience for employees

Poor financial results

IS IT SUSTAINABLE?

No, design driven approach is not sustainable.

Not for the needs of the customer.

Fierce competition from big players like Apple and Sony

Consumer change to virtual environment.

Traditional development method.

No innovation in the development and design process

IDEALAB INITIATIVE

Created in early 2004 to explore extensions to B&O’s product development process with an emphasis on computer technologies.

People with different background – business, design, software – different countries.

The extension of products helped generate additional revenue for the firm.

IDEALAB – ASSESMENT

An important arm of B&O for generating newer ideas from existing products.

A source of supplementary revenue to sustain in difficult times.

Will help in tapping the untapped & uncontested market (Media convergence, Customer Behavior with Media etc.)

Inter-Cultural Heat needs to be kept in check.

Ideas can directly be presented to CTO & CEO if they didn’t appeal to Design team.

CHANGE IN DESIGN PROCESS

YesRadical approach has not been changed much.New Organization role – Producer with responsibilities

across platforms & projects.New solutions need not pass through traditional

process.Thesis – Antithesis – Synthesis better through

competitive conflict.Focus needs to be kept on basic philosophy of the

company.Acceptance of idea should be on the basis of quality

of idea rather than the person from whom the idea came and his cultural background.

GROUP 6 PRESENTATION

ANIL BEHAL (11EMPDM196)Anurag Singh (11EMPDM197)ISHAN GARG (11EMPDM200)BHARTI VERMA (11EMPDM198)DEEPAK RAJA (11EMPDM199)AMIT KANABAR (11EMPDM195)KUMAR GAURAV (11EMPDM201)