Steinway & Sons

－－ Group3 ASPEN: 孙斐

郗群

吴乐群

吴健鹏
 Part I: What’s it ?
In an age of mass production, Steinway & Sons
remains a testament to individual craftsmanship,
each year producing a limited number of
handmade pianos, considered by many to be the
finest in the world.
Mission – set the standard for excellence in
Piano manufacture.
 Legend of S&S imperishable
• The Early Years
1839. won first honor
1850. set sail to New York
1853. Steinway & Sons
1855. entered AIE; won a gold medal
1866. open Steinway Hall
1867. extend reputation and sales abroad
1871. Heinrich died
1870s. Open a huge factory
1875. London showroom
1880. a factory in Hamburg
End of the 19th century, on the verge of bankruptcy
1896. William died. His nephew try to sell it.
 Legend of S&S imperishable
• 20th Century Changes
1930s. Lost part of market
World War II. Halted for military
After the war. Consolidate\ Renew \ Sell Steinway Hall
1960s. High variety but low profits
1972. sold to CBS
1985. sold to Boston group
1995. sold to Selmer co.
1998. acquired kluge
1999.purchase O.S. Kelly; repurchase Steinway Hall
2003 net sale $180 million.
 Tradition of Superior Quality

• Customers
• Loyal Customers- 95 % exclusively on Steinway pianos;
listed more than 900 “Steinway Artists”
• unique “piano bank,”
• Production
• Quality handcraftsmanship and innovative techniques were
part of the tradition
• 120 patented during its first 40 years, becoming the basis
for the so-called Steinway system, the eventual standard for
piano manufacture
 Tradition of Superior Quality
• did not relax this quest for excellence-1920s, Steinway
modified its manufacturing process, improving its rib
shaping process and veneer techniques
• By the end of the 1930s, Steinway stopped producing iron
plates and ivory keys, choosing instead to replaced ivory
keys with a polymeric
material, successfully reducing costs without reducing
quality.
 Creating a Steinway
• Meticulous craftsmanship and attention to detail could not
always keep pace with the demand for its grand pianos
• Raw material
• searched the globe for the world’s finest wood; each
Steinway piano used
• wood from a single tree.
• toughest customer for wood suppliers, nearly 50% of
wood ended up in the scrap bin.
 The Competition
• Baldwin. the largest American piano builder,
• Yamaha. Japan had become the largest piano-
producing nation (1/3 of the world’s output).
• New Products for a New Era of Distribution
• introduced a third line of pianos,
• rebuilt pianos under the brand Heirloom
Collection.
• change within Steinway’s distribution
 Part II: SWOT

Opportunities

Weakness

Strength

Threats Business School of Shantou

10 University
 Strength

 Brand
 Quality
 Strategy
 Innovative technique
 Market leader in high quality piano
 Good service
 Vertical Integration and Strategy alliance

Business School of Shantou

11 University
Weakness

 High cost
 Slow production speed
 Narrow market niche
 Outdate technology
 Operation process
Opportunities

 New production
technology
 Middle market
 Globalization
 Increasing demand
Threats

 Competitor’s low price competence

 Production technology revolution
 Cut the cost in the case of ensure quality
Part III: Recommendations

—— Based on SWOT
analysis.
 Internal strength
issues Brand; Quality; Strategy;
Innovative technique;
External Market leader in high
quality piano; Good
issues service; Vertical
Integration and Strategy
alliance
opportunities SO
New production technology ; using new technology to
improving quantity; enter
Middle market;
into the middle market
Globalization; with brand and quality
Increasing demand. advantages...
threats ST
Competitor’s low price Give up the low class
;competence products, focusing on both
the high and middle class;
Production technology
the great brand is the core
revolution; Cut the cost in the
competence to fight
case of ensure quality.
back…
weakness
High cost;
Slow production speed;
Narrow market niche;
Outdate technology;
Operation process.
WO
Low down the cost and cut
down the cycle-time via using
new production technology to
meet the increasing demand;
assembly line is recommended
WT
Put money on the point–
update the technology; project
shop just for the famous
musician and assembly line
should be adopted…
SO
using new technology to
improving quantity; enter
into the middle market
with brand and quality
advantages...
WO
Low down the cost and cut
down the cycle-time via using
new production technology to
meet the increasing demand;
assembly line is recommended
ST
Give up the low class
products, focusing on both
the high and middle class;
the great brand is the core
competence to fight
back…
WT
Put money on the point–
update the technology; project
shop just for the famous
musician and assembly line
should be adopted…
Quantitative analysis

 -- helping decide to choose which process.

 Sample 1: mill slot then drill hole
Quantitative analysis

 Sample 2: drill hole then mill slot.

Quantitative analysis

 Describing statistics
Quantitative analysis

 Conclusion

-- we would suggest Ronald

Penatzer ( General Manager of
Manufacturing Operations) choose
the second process.
The end

Thank you
For
your attention!