Steinway & Sons Case Study
Autor: Mikki • March 4, 2018 • 1,168 Words (5 Pages) • 1,201 Views
...
Alternative Solutions:
There are other options than just introducing the Model K in the current process. Steinway could attempt to modernize its manufacturing process, and directly compete with Yamaha on the price points. This alternative is highly undesirable. Not only would it betray Steinway’s commitment to quality, it would be placing the company into a competitive field it is not suited for. After generations of creating the best of the best, it would require a fundamental shift for it to compete to be the cheapest. A different alternative would be for Steinway to simply not produce the Model K and for it to just continue as it is. Again, this isn’t a great alternative – Yamaha and other lower cost competitors are edging into the market, and without some action by Steinway it is likely that the company will begin losing market share.
Matrix evaluation:
Maintaining
Culture
Competitive
Connecting to
Total
Quality
Response
Customer
Model K
+.5
+1
+.5
+1
+3
“traditional”
Modernize
-1
-1
-1
0
-3
Process
No Model K
+1
+1
+.5
0
+2.5
Implementation Issues:
Obviously there are issues with implementing the new Model K. Capacity is a major limiting element at Steinway, they often have an almost yearlong order back log. This is due to the fact that it is very difficult and slow to train skilled workers to build the pianos, and many leave for their own careers after a few years. This makes it difficult for Steinway to expand production without significantly increasing costs. So, implementing the new Model K will demand a reduction in production of other pianos. This would also require that some workers who previously had worked on the very prestigious grand piano division, may be reassigned. This raises the issue that some employees may not appreciate being reassigned, a significant issue given the difficulty in replacing the quality talent.
---------------------------------------------------------------
Competition, Competitive advantage:
Introducing the Model K using the current manufacturing techniques will elicit a limited competitive response. The Model K, while a cheaper unit than current models, is still a quality focused product. The other competitors’ offerings are cheaper but of lower quality. The Model K may skim some sales off the top, but would not likely threaten the completion enough for concern. The Model K, thanks to Steinway’s strong brand image, and dedication to quality, will have a strong quality derived competitive advantage. It will easily fit in as a starter piano for professionals and schools. Cheap enough to be possible, and of sufficient quality to justify a higher price. Its introduction will also provide a boon for other piano sales, as the psychological switching cost from you first piano brand often leads to people staying with the same brand as their starter. Getting these customers early will help to keep them loyal Steinway customers. For these reasons, Steinway should produce and market the Model K in order to retain its edge in the market.
...