Strategic Management Assignment – A (GC0436)

Executive summary

This paper will be focused on the strategic policy of Bang & Olufsen, an audio-visual luxury equipment producer of Denmark. It is no doubt that the profitability and growth of the company depend on accurate strategies, especially for Bang & Olufsen. This paper will be identified that the functions and decisions of Bang & Olufsen that affect strategic activities. This paper also will be described as the external and internal factors that affect the business functions of Bang& Olufsen. In the case of external factor analysis; the PESTLE analysis will be applied and for the internal factor analysis, the. Finally; this paper will be described as Porter’s value chain model that helps to increase the value of the Bang & Olufsen. This paper will give adequate information about the threats and challenges of Bang & Olufsen and the process of mitigating the challenges.

Table of Contents

Executive summary.

1.0 Introduction.

2.0 Evaluate how the strategy adopted by Bang & Olufsen impacts the company’s decisions and activities

3.0 Analyse the external and internal factors of Bang & Olufsen and how the company responses to them

3.1 External factors and how Bang & Olufsen responds to them.

PESTLE Analysis.

2.1 Porter’s Five Forces.

4.0 Conclusion.

References.

1.0 Introduction

In Denmark and the UK market; Bang & Olufsen is an audio-visual luxury equipment producer and supplier. Arthur Stonehill (2012) stated that The profitability and growth of the company is a very attractive position because of its several strategies. Recently, this company has applied several strategies to overcome the problems and threats of the market (Bang & Olufsen, 2019). Due to the identification of the impact of the strategy on the functions and decisions of Bang & Olufsen, this paper is written. After it; this paper analyses the external and internal factors as well as Porter’s value chain model that help to increase the value of the Bang & Olufsen,

2.0 Evaluate how the strategy adopted by Bang & Olufsen impacts the company’s decisions and activities

In this modern age business; every firm requires maintaining the strategic capability by ensuring the efficient use of resources. Since Bang & Olufsen is an audio-visual luxury company; this firm has to focus on the competence of the use of the resource. Bang & Olufsen imposed concentration on modern innovation, special design, better performances, and strict quality (Bang & Olufsen, 2019). When the firm can be ensured these base requirement strategies, this firm can be able to attain a good market position in the audio-visual industry. Bang & Olufsen has 88 years’ previous experiences that make this company better than others.

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Strategic Management Assignment on The Bang & Olufsen

The profile of the company is good enough than others due to its strategic strategies (Bang & Olufsen A/S, 2019). The strategies of the Bang & Olufsen help to establish the image in both the domestic area as well as the international area(David, 2011). B&O has a strong brand image in the market and this company has applied the highest pricing strategy than competitors like Bose as well as Loewe. This pricing strategy helps to increase the firm’s profitability along with liquidity. In fact; this firm has faced threats in the market due to well brand organizations like Sony and Samsung. At present; these competitors have produced more stylish and innovative products that are better than B&O products. The price level of Sony and Samsung is also lower than the price level of Bang & Olufsen. Therefore; it is high time for Bang & Olufsen to reduce their product price for competing with the customers (Bang & Olufsen, 2019). In addition, with the lower price level; technological advancement is required to control the marketplace and the attraction of customers (David, 2011).

The economic situation is considered a basis to take strategic objectives. In the case of the recession period of Denmark and Europe; Bang & Olufsen has faced the threats of reducing customers’ acceptance because of the reduction in the purchasing power of the customers. In addition; the economic crisis position of Denmark influences the Danish firm in an inverse way (Bang & Olufsen, 2019). In his situation; Bang & Olufsen has to apply market demand strategies to control the market crisis. Therefore; the company can be applied the outsourcing method of production, lower price strategy, research, and development activities to produce new and innovative products and strategies of customers’ relationships (Bang & Olufsen, 2019). Although; outsourcing opportunity is not a suitable method, it helps to overcome the sudden economic downturns effects.

The customers’ service level is also important in this situation. Band & Olufsen has offered its product in the market at a reasonable rate for up to 12 years and this company has a longer period of the product line and product development strategyBang & Olufsen, 2019) Band & Olufsen has maintained a good relationship with the suppliers to maintain the smooth flow of production activities. Band & Olufsen has recruited skilled designers, technicians, and dealers to provide greater services to the customers. At present; Bang & Olufsen offers a unique and good environment in their stores by which customers are getting satisfied when they enter into stores(Bang & Olufsen, 2019).

In addition; Band & Olufsen produces unique configuration devices and audio-visual equipment to attract as well as retain potential customers. These strategies have brought a great effect on the performance of the Band & Olufsen decisions and activities.

3.0 Analyse the external and internal factors of Bang & Olufsen and how the company responses to them

3.1 External factors and how Bang & Olufsen responds to them

PESTLE Analysis

Every business organization has affected by external factors of the business environment especially B&O. In the case of B&O, the macro factors affect operational activities and profitability (Economist, 2008). The macro-environment factors of B&O are analyzed through PESTLE analysis.

Figure: PESTLE analysis Source: Davide Ravasi&Nelson Phillips (2017)

Political

Davide Ravasi&Nelson Phillips (2017) stated that In the case of political factors, government policy and political stability are the main consideration for business firms. Band & Olufsen has run its business activities in the Denmark and EU market. The political factors should be considered by Band & Olufsen to know the current position of the macro environment and take accurate decisions regarding business activities…………