GROUP CASE REPORT
STEINWAY&SONS: BUYING A LEGEND
I. INTRODUCTION
Kirkland and Messina had several problems facing them in their purchase of Steinway&Sons in 1995. For 140 years, Steinway has held the reputation for making the finest quality grand pianos in the world. However, the past 25 years has proven to be a challenge. First, the company has changed hands several times and product quality has become a concern. Second, the worldwide market for pianos has been in a steady decline, and competition for high-end grand pianos has increased. Moreover, they introduced a mid-priced line of grand pianos under the brand name ¡§Boston¡¨ in 1992, which represented a major shift in strategy for the company. Within this context, what should the new owners do to leverage the Steinway brand name to increase its profitability in order to receive a worthwhile return on a $100 million dollar investment? That will be the content of this analysis
II. GENERAL ANALYSIS
a. Who are Steinway&Sons¡¦ customers? (Customer analysis)
1. Individuals market: The Steinway customer is the middle-aged and above, affluent music lover. With over 90% of sales to individuals, this customer is Steinway¡¦s most important. They view quality of product as more important than price and Steinway is the most respected brand name in the industry.
2. Professional and institutional market: Most of the famous pianists of the world use Steinway. Although this segment is a minimal profit, if any, it is one of the most important and visible for the brand. The artists merge with the educational and institutional segments to form the other 10% of the Steinway business. Schools su ...