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SteinwayandSonsCo.

CaseStudy
Thisisagroupcasestudy.Provideyourreportasagroup
answeringthequestionsbelow.Yourreportshouldnotbe
morethan4pageslong.ReportisdueAprilon7th.
AQ1WhatarethekeychallengesthatSteinwayhavewhen
youcomparethemwiththeircompetition?Listthe
financialandnonfinancialchallenges.
sanQ2WhatmanagementmistakesdidSteinwaymakethat
broughtthemhardshipsinthe2008downturn?
parQ3.Howwouldyoucharacterizetheirphilanthropic
workandmusicalinstitutions?Didtheyhelpthecompany
andhow?
AQ4.Winningbynotcompetingstrategywasamajor
strategicdecision.Inthehindsightwhatdoyoumakeoutof
thestepscompanytook?
sanQ5BobDovesaid,Company(S&S)hasbuiltup
tremendousbrandnameandenjoysanunsurpassed
reputationforquality.Commentonthisgiventhequality
issuesmentionedinthecasestudy.
Par/sauQ6.Whyacompanyofhighculture,style,status
andclasscouldnotbefinanciallysuccessfulandhadtogo
throughmultipleacquisitions?

HereissomeinformationonS&Spastthe1997casestudy
period.
Afterthe2008economicdownturn,Steinwaygrandpiano
salesfellbyhalfand30%oftheunionemployeeswerelaid
offfromtheNewYorkfactorybetweenAugust2008and
November2009.[97]Salesweredown21%in2009inthe
UnitedStates.[97]Asof2010,salesbeganincreasingalittle
andin2011salesincreasedfurther.[98][99]
allQ7.WhatcouldSteinwayhavedonedifferentlytoshowbetter
financialperformance(reviewfinancials)?

InJune2013,privateequityfirmKohlberg&Company
offeredtobuySteinwayparentcompanySteinwayMusical
Instrumentsfor$438million.[106]OnAugust14,2013,
hedgefundPaulson&Co.madeahigherofferof$512
milliontotakethecompanyprivate,whichtheSteinway
MusicalInstrumentsboardrecommendedproceedingwith.
InSeptember2013,Paulson&Co.announcedthe
completionofacquisitionofSteinwayMusicalInstruments.
[107][108]

Sau Q8. Was the acquisition by a hedge fund


company avoidable? What are your thoughts
on S&S being run by a hedge fund?

All Q9. What specific lessons can you draw


from this case study? Provide concrete
supporting information to your position.

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