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Innovation of Bang & Olufsen


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Innovation of Bang & Olufsen

  1. 1. Design Driven Innovation – Bang & Olufsen an HBS case, powerpoint by Wesley Shu, Ph.D.
  2. 2. Bang & Olufsen <ul><li>You can watch a B&O TV for hours – and then you turn it on. </li></ul><ul><li>The product itself is ‘experience’ – Wesley Shu </li></ul>
  3. 3. Issue <ul><li>Impact of iPod : extend into virtual space, not only physical form or function </li></ul><ul><li>Extend to virtual space, where great design meant great software and network-based interaction with other products and services </li></ul>
  4. 4. Issue <ul><li>This differed from B&O’s traditional expertise </li></ul><ul><li>The company formed Idealab </li></ul><ul><li>“ supplementary innovation” – a way of injecting new ideas into products from outside the traditional process </li></ul><ul><li>Move away from designers’ near absolute control over products </li></ul><ul><li>But how to decide the ‘right’ amount of change? </li></ul>
  5. 5. Survived from Asian competition 1960s <ul><li>By allying with a group of architects & designers </li></ul><ul><li>By focusing on ideas and design behind its products </li></ul><ul><li>Emphasizing high quality </li></ul>
  6. 6. Design Style <ul><li>Influenced by Bauhaus and Scandinavian preference for clean lines </li></ul>
  7. 7. Bauhaus
  8. 8. Scandinavian clean-line
  9. 9. Scandinavian clean-line
  10. 10. 2001 strategy to overcome difficulties <ul><li>Car stereo systems </li></ul><ul><li>Mobile phone </li></ul><ul><li>Hotel </li></ul><ul><li>Luxury yachts </li></ul>
  11. 11. Vision (mission?) Statement <ul><li>Courage to constantly question the ordinary in search of surprising, long lasting experiences </li></ul><ul><li>For Bang & Olufsen, design is far more than mere styling of existing products; rather it is the expression of an idea, the concept made conscious </li></ul>Business Model
  12. 12. Self Position <ul><li>“ We see competition more in the recreational car or home, high-end furniture or luxury travel… We relate more to a BMW than to the generic product ranges of electronics giants.” </li></ul><ul><li>Very hard to imitate – technology and material to support the unique design (cf. Philip, Fisher) </li></ul>Business Model
  13. 13. Customer <ul><li>Vital core customers </li></ul><ul><li>80% revenue came from 800 to 1,000 customers in the U.S. </li></ul><ul><li>Customer relations are important – CRM. </li></ul><ul><li>Not only design, but the way the product works </li></ul>Business Model
  14. 14. Designer – never in-house! <ul><li>Away from the influence of its daily business </li></ul><ul><li>Not need to understand their industrial limitations, e.g., manufacturability </li></ul>Making Ban & Olufsen Products
  15. 15. Designer – never in-house! <ul><li>“ Designers have to be free to look in an unconditioned way at what’s happening in our society, how people live and furnish their homes…” </li></ul>Making Ban & Olufsen Products
  16. 16. Who Are the Designer <ul><li>A senior designer – British </li></ul><ul><li>3 external designers </li></ul><ul><li>Competitions </li></ul><ul><li>Good designers have strong personality </li></ul>Making Ban & Olufsen Products
  17. 17. Design Competition <ul><li>“ When flat screen TVs started to take off, B&O launched a competition among nine designers from different parts of the world for ideas on what the B&O flat screen concept should be.” </li></ul>Making Bang & Olufsen Products
  18. 18. Designer <ul><li>Then, B&O attracts more talented designers. </li></ul>Making Ban & Olufsen Products
  19. 19. Process <ul><li>No standard process for product design and development </li></ul><ul><li>Culturally evolved collaboration between designers, concept developers, engineers, and technicians </li></ul>Making Ban & Olufsen Products
  20. 20. Process <ul><li>Close physical proximity to production departments </li></ul><ul><li>Thesis by designers – antithesis by engineers – synthesis : one or two years </li></ul>Making Ban & Olufsen Products
  21. 21. Concept Developers <ul><li>Bridge art towards the repetitive processes of an efficient industrialized manufacturing process </li></ul><ul><li>Constantly question the ordinary </li></ul><ul><li>Give hard time to manufacturing guys </li></ul>Making Ban & Olufsen Products
  22. 22. Coming up with new ideas <ul><li>From designers </li></ul><ul><li>From engineers – new technology inspiring designers </li></ul><ul><li>From perceived needs to fill out the product portfolio </li></ul>Making Ban & Olufsen Products
  23. 23. Ideas from designers <ul><li>See how customers live, not ask what they want. </li></ul><ul><li>Customers only know what’s already hot in the market. </li></ul><ul><li>Go beyond customer expectation </li></ul>Making Ban & Olufsen Products
  24. 24. Design – Prototyping <ul><li>Idea iterates until it has ‘substance’ – unique personality </li></ul>Product Development Life Cycle
  25. 25. Prototypes – product commitment <ul><li>Decision was made with the heart, not financial or technical considerations </li></ul>Product Development Life Cycle
  26. 26. Product commitment – development <ul><li>A dedicated project team formed </li></ul><ul><li>Designers remained involved </li></ul><ul><li>Concepts or development process may change if a convincing new idea comes up. </li></ul>Product Development Life Cycle
  27. 27. Some Products <ul><li>BeoSound 9000 </li></ul><ul><ul><li>originally unmanufacturable </li></ul></ul><ul><ul><li>Took 5 years from the decision point to manufacturing </li></ul></ul><ul><li>BeoLab 8000 </li></ul><ul><ul><li>Originally a crazy idea </li></ul></ul><ul><li>BeoCom 2 </li></ul><ul><ul><li>New technology & material to support design, e.g., hydroforming used by Porsche </li></ul></ul>Product Development Life Cycle
  28. 28. Conclusion <ul><li>“ If you wanted to express power and determination as a manager here, it would be difficult, but if you allow a certain degree of freedom you get a very creative environment.” </li></ul>Product Development Life Cycle
  29. 29. IdeaLab – B&O’s effort to digital world <ul><li>Goal: untapped or uncontested markets, network economy, media convergence (is iPod one?) </li></ul><ul><li>The most challenging part is how to integrate into existing business environment </li></ul>IdeaLab
  30. 30. Effort to integrate <ul><li>Find the way to communicate </li></ul><ul><li>Follow existing way of communication </li></ul><ul><li>Collocate chief graphic designer with concept developers at IdeaLand </li></ul><ul><li>Demo facility without pushing designers to visit </li></ul><ul><li>Supplementary functionality for existing products </li></ul><ul><li>Patience! Usually took longer than anticipate </li></ul>IdeaLab
  31. 31. Some B&O Products
  32. 32. Some B&O Products BeoLab 5 Loudspeakers
  33. 33. Some B&O Products
  34. 34. Some B&O Products BeoVision 7 and BeoLab 8000
  35. 35. Some B&O Products
  36. 36. Some B&O Products BeoLab 3
  37. 37. Some B&O Products BeoCom 2