Bang & Olufsen’s new strategy focuses on technology, car audio and online sales
High end Danish electronics maker Bang & Olufsen, known for their unique blend of technology and innovative designs, appointed Tue Mantonias his new CEO with a mission to make important changes within the company. Mantoni inherits a company in better shape than that found by its predecessor in the last year, reported a profit of DKK 40 million (5.37 million euros), compared with a loss of DKK 50 million the year before
Mantoni recently presented his strategic plan will set the tone of the group over the next five years. In an interview to Spanish media, Mantoni said: ”The company is now changing. To be honest, not enough has changed. There are decisions we should have taken five years ago, and many things we have not done well enough," he admits.
By 2012, we plan to launch a global online shop as well as several new stores in key markets such as China. "We are a luxury product and as such, we are not interested in a price war to attract a large number of new buyers. What we can do is to build customer loyalty and long term, relying on word of mouth, "he says. "B & O is and will always be a small business specializing in what they do best: good products that are sold at a thousand locations around the world and generate a good customer experience," continues the Danish executive.
"We have strengthened the support we provide to the dealers, it is they who have direct contact with consumers. Therefore, we believe we can grow the business, without diving into new business lines, "he says.
In contrast, another of the key points of the new strategic plan lies in strengthening the commitment to the development of audio and video quality and sound systems for the automotive industry. The first car speakers incorporated in 2008 in the Aston Martin DBS. Later, some models of Audi, BMW and Mercedes-Benz began offering these systems as a bonus. "In the last five months, we rejected the offer of two automotive firms," â€‹â€‹says Mantoni. Last year, this area already accounted for 16% of total group revenues, equivalent to about 61.6 million euros from the sale of 150,000 of these audio systems.
But the biggest changes in Bang & Olufsen has to do with the pace at which new products are developed. So far, the Nordic firm presented each year one or two developments. "Technology is advancing very quickly. We need to adapt to that pace, and provide updates that allow customers to have equipment always at the forefront, while maintaining a competitive value, "argues Mantoni. To this end, the executive anticipates that, "while keeping the bulk of manufacturing in Denmark, we will study the suitability of certain components purchased in China, India or in those countries that offer better service."
Currently, a 40-inch LED TV (model BeoVision 10) is sold for about 6,000 euros, while the digital player BeoSound 5 Encore costs more than 2,500 euros, to which we must add the price of the speakers.
"In an environment like this, we also need to be more open. Therefore, all new equipment will be compatible with products from other manufacturers, such as the iPhone, and iPhone home automation systems, "adds Mantoni. Also, following the path that other manufacturers have already started, Bang & Olufsen is now seeking to build alliances with producers to provide content to their devices.