Restructuring Of B&O Through Quality Initiatives

Vicky kr Anand
Vicky KumarYogesh
AnandKumar
Yogesh Kumar
 COMPANY PROFILE
Bang and Olufsen is a Danish Consumer electronics
company that designs and manufactures audio products,
television sets, and telephones.

Company was founded by Peter Bang and Svend Olufsen in

1925.

First product was Radio which worked on alternating

current at a time when most were run on batteries.

products are sold mainly by an extensive, independent retail

network in more than 100 countries.
 Company has worldwide reputation for idea based products of high quality and
artistic design.

Company has delivered the largest and most consistent design among the worlds
industrial companies portfolio.

Company says Brands are not made by marketing people but by consistent
delivery of a certain condition for many years.

Gained reputation during 2nd World War as a premium audio device maker.
 COMPETITION: Asian Market
Competition from Asian manufacturers forced many Danish players to close.
Fake products were being manufactured in china.
B&O survived by allying with architects and designers.
Focusing on its idea, design behind its product, and by emphasizing high quality.
Competition together brought weak product demand.
Formulated Break-Point93
Near Death experience- bought back 25% stakes from Phillips.
Company laid of one quarter of its employees and launched a new distribution
strategy.
Company to sell products through B&O retail outfits.
 PROBLEM IDENTIFICATION
Impact of IPod:
IPod extended market to a virtual space, where great design
meant great software and network based interaction.

Change in the technology in electronic market lead to new demands.

Different from B&Os traditional expertise.

Company formed idealab, a way of injecting new ideas from outside

traditional process.

Deciding right amount of change was difficult.

In 2008 company suffers a catastrophic loss of $126M or 37% year-on-year sales drop.
Subsequent drop of share value by $52 to $8.50
 Restructuring at B&O
Sorensen was hired as the CEO to specifically handle this situation
Rejected Idea lab concept.
New CEO Karl Kristian Hvidt Nilesen.
Keeping Consumer interest.
Analysed Problem
Organized restructuring.
 Methodology of Restructuring

Business Model Change

- Value proposition: Creative design based on cultural aspect.
- Supply Chain : Own retail store and then virtual world.
- Target Customers: No Change.

Technological Model Change

- Product & Service offering: Cutting edge , never seen before designs.
- Process Technology: Process standardization, radical design.
- Enabling Technology: Software networking solution.
 Value Proposition

Idea Lab was created in the early 2004.

Fusion of mechanical inventions with new digital technologies.

New graphical user interfaces, new ways of interacting in cyberspace.

Finding concepts in untapped and uncontested markets.

Making things more convenient and personal.

Integrate Idea Lab innovations to the traditional process.

 Supply Chain
60 Countries Via 11 National sales companies all are owned by B&O
 RESTURUCTURING MAKING B&O PRODUCTS

Designers not affected by other parts of organisation.

Free to explore unconditioned ways.

Divergent ideas and emerging new designers.

Relied on a culturally evolved collaboration between designers, concept

developers, engineers and technicians.
 MANUFACTURING RESTRUCTURING
Products were made to orders, based on specific customer.
Common variants kept in stock in the U.S.
Non stock items were delivered in about four weeks.
Set daily production objective for each manufacturing line.
The line between R&D and manufacturing was less sharp at B&O than at mass-
producing companies.
Production layouts were tailored to each product.
Workers met with line managers every morning to discuss previous day results and
solutions to improve.
THE NEW OUTLOOK
The acceptance of Idea lab took longer than anticipated.
Better networking and communicating.
New software solutions and implementations.
More explicit and enabling process.
Differentiation from the competitors and peers.
Input from people who understand the virtual world considered.
Conclusion
In order to sustain in this competitive World every organization have
to focus on every aspect of organizational structure and their
products as well as current scenario of market and socio-economical
trends.

Main reason behind B&O sales decline is they were lacking on virtual
technological front and advancement.

After restructuring B&O starts making profit in the year 2010.

 REFERENCES
http://www.bang-Olufsen.com/en
http://www.largestcompanies.com/company/Bang--Olufsen-
Operations-AS-153685
http://www.thecasesolutions.com/bang-olufsen-design-driven-
innovation-8336
http://www.Wikipedia.com
http://www.scribd.com