Steinway Swot

History

Steinway & Sons, the company founded in 1853, remains of one of the extravagant, best-known piano manufacturer throughout for more than a century, desires to expand its business that fit the competencies of the company. The company is doing well, but as the local market gets more saturated, they are thinking of broaden their businesses. This big-sized enterprise is acknowledged for its superior sound, and the excellence of its manufacturing and engineering. And following the great fact about Steinway, it was being rewarded Grand Gold Medal of Honor. It merges with the Selmer Company, a manufacturer of brasswind, woodwind, percussion and stringed instruments in 1995.

Current Situation

Today, Steinway has 8 company-owned retail stores and 23 dealers located in big cities such as New York, London, Berlin, and Hamburg. They offer 3 ranges of product, it is in the order from the lowest to highest:

1. Essex piano

2. Boston piano

3. Steinway piano

SWOT Analysis

In order to make a good strategy, we have to know how the company is doing right now, internal and external. Therefore, we need SWOT. There is some reason why we should use SWOT:

1. To draw out strength and weakness. What we're good and bad at currently.

2. To pull out all the opportunities and threats. To anticipate future development that can have an impact on the firm.

3. As a defense stance, for example: you are under attack and you want to fight back, you need SWOT analysis to do that.

Strengths:

* Steinway is a great brand name providing high quality product, having an excellent prestige depicted as an indication of high cultural taste and a sign of high achievement resulted in higher social class and status.

* Highly skilled human resources for innovation and quality, proven by its 120 patents. Best-known for handcrafting concert grand piano.

* Product Expansion without Cannibalization.

While the company's middle and lower end Boston and Essex lines are designed by Steinway, they are manufactured by other plants. Customers clearly know the difference between the three different lines. It also gives dealers more Steinway products to sell.

* Merging with Selmer, a number 1 US maker of band instruments.

The whole process contributes in the increase of company's revenue to 52 percent of the whole sales by selling band and orchestral instruments. The total sales reached $386m in 2006.

* Good relationship between the employees.

Nepotism in the company works very well. A lot of our employee that works currently came from the people who have already worked here before and they are such a great performers. And on the top of all, they stay for a long time and they love the company.

Weaknesses:

* The most expensive piano in the market.

The retail prices in 1996 ranged from $30.000 to $110.000 in the US. Primarily purchased by affluent individuals with incomes over $120.000 a year.

* High wages labor.

Because they are actually hand-crafting the product, so they have to hire specialized people to do it, and it's not cheap. Compare to Yamaha, which has the automated manufacturing machine.

* Long production time.

Steinway use old-fashioned method which is hand-crafted. Because the quality reason and very detailed, it is so time consuming compare to Yamaha who has automated manufacturing machine

* The market is very saturated as it is only purchased by the affluent people.

* Website is only for advertisement, no option of purchasing it online.

This circumstance makes it rather difficult for sales expansion because the Asian market is growing, not only in china and Japan but all over the south-east and north-east Asia.

.

Opportunities:

* Growing needs of prestigious item in Asia.

World-widely, many people become richer and aware more than ever of their status these days. Therefore, they will buy anything that can make them look bigger including piano in their house.

* With