4. Steinway and sons is an American-
German piano company, founded in
1853 in Manhattan, New York City,
by German immigrant Heinrich
Engelhard Steinweg.
6. - Messina and Kirkland purchased Steinway from the
Birminghams in 1994 for $100 million.
- Now they had a 23% share in the company.
- The unit sale of Steinway grand pianos had slipped from
3576 in 1990 to 2698 in 1994 when the purchase was
made.
- Yamaha, a japanese piano powerhouse, continued its
efforts to challenge Steinway as the maker of the world’s
finest concert grand piano.
9. Whether Steinway would continue its high-end, niche strategy of being the
world’s pre-eminent maker of high quality vertical and grand pianos?
Alternatively, might it make more sense to forego this long-standing
strategy to pursue some bolder, more aggressive plan?
What to do with the recently introduced line of Boston Pianos?
Did it make sense for Steinway to sell a mid-priced line of vertical and
grand pianos?
Second, if it did make sense, might there be other ways to leverage the
Steinway brand name to further enhance revenues?
Finally, what role should Messina and Kirkland play in the running of
Steinway?
11. The company must now target the medium or low-
end potential customers. Lower prices leads to higher
sales. Even though they have come up with new
range of Boston Pianos which are relatively cheaper,
the company needs a wide variety of products for this
section.
But it must never give up its high end niche products
for which Steinway is particularly popular.
12. The company must expand in new
emerging markets such as Asia and
Africa. The demand in these regions is
rising and Steinway must use such an
opportunity to its profits.
14. Trends
The first involved a sustained
downturn in the piano industry, with
global sales dropping by 40% since
1980. In the United States, piano
sales dropped even farther, from
233,000 units in 1980 to less than
100,000 units in 1994.
15. Trends
The second major trend in the
industry was the consolidation of
the piano manufacturing industries
in the United States and Europe.
16. Trends
The third major trend was the emergence of
several Asian manufacturers. In particular, four
Asian companies combined for 75% of global
sales by the 1990s. These included two
Japanese companies, Yamaha (~ 200,000 units)
and Kawai (~ 100,000 units), and two South
Korean companies, Young Chang and Samick (~
75,000 to 100,000 units each).
17. Trends
The fourth major trend in the piano industry
was the opening of new and potentially large
markets. Whereas the traditional piano
markets in the world were the United States
and Western Europe, countries such as Japan,
South Korea and China now represented huge
opportunities for the world’s piano makers.
21. The company must work on decreasing its
manufacturing costs to reap as much profits
as possible to invest into expansion.
Technology must be used anywhere it can
be in the manufacturing process.
22. Instead of being threatened of
USED STEINWAY PIANOS, the
company can start programmes
for their use by taking them in or
using them in the production of
NEW ONES.
23. Created by Shipra Singh, PGDAV College,
University of Delhi, during a marketing
internship under Prof. Sameer Mathur,
IIM Lucknow.
