steinway and sons buying a legend case analysis
TRANSCRIPT
QUESTIONS FACING MESSINA
AND KIRKLAND
• Whether Steinway would continue its high-end, niche strategy of
being the world’s pre-eminent maker of high quality vertical and
grand pianos?
• Might it make more sense to forego this long-standing strategy
to pursue some bolder, more aggressive plan?
• Does it make sense for Steinway to sell a mid-priced line of
vertical and grand pianos?
1.Baldwin
oHigh-quality grand pianos
o In 1994-sold about 20,000 pianos-generating
revenues of $122 million
o Has a network of 700 dealers
o Respected by trained musicians
2.-Yamaha
o100-year old Corporation
o $1.0 billion in piano sales
o 35% share of the world market
o 50% share of the Japanese market
Unit Sales of piano producers in
1994
a. Baldwin- 20,000 pianos
b. Yamaha- 175,000 pianos
c. Kawai-100,000 pianos
d. Bosendorfer-400 grand pianos
e. Fazioli-60 grand pianos
Weakness
I. too much cost is consuming( half of Lumber is
being discarded)
II. The dealer network is reduced during Birmingham
III. Lack of diversity
Financial capabilities
i. Owners has changed many times
ii. Running in loss for two consecutive years 1992 &
1993
iii. Seasonal downturn in demand
Continue Boston piano by maintaining its
brand name
Expand into new Markets like Asia
Bring new products into the market like
Steinway Limited Editions, The Crown
Jewel Collection etc……..