ODC | Piano | Strategic Management




including two brands(Steinway & less expensive Boston brand) & both upright & grand piano models. The company hand crafts its grand pianos in New York & Germany. Creating Steinway concert grand piano requires more than 12000 mostly handcrafted parts. .INTRODUCTION TO THE CASE Steinway & sons offers several different pianos.& sells them through more than 200 independent dealers.

Wood-drying operations convert moisture-rich lumber into useable raw material through air drying & computer-controlled kilns.” finishing & tone regulating.iron piano plate & rim to each other. ii.There are three major steps in the production processi. Piano-making operation include “bellying. Then seasoned for 10 weeks before being joined to other wooden parts. . iii. Parts-making operations involves bending of the piano rim that are formed of multiple layers of specially selected maple that are manually forced into a unified shape held in presses for several hr. The bellying process involves the careful fitting of the soundboard .

•Several Asian companies such as Yamaha.PROBLEMS: •Keeping workers has proved extremely difficult •Many of the workers could easily set up their own shop to repair or rebuild older Steinways pianos. Young Chang and Samick emerging as important competitors. . Kawai . •Increased electronic keyboard sales.

INPUTS: • General Environment of the company •Industry Structure DESIGN COMPONENTS: • Strategy •Technology •Structure •Measurement System •Human Resource System OUTPUT: •Organizational Effectiveness .

They are very picky while choosing the material for the pianos therefore . Use of the classic methods of production .INPUTS •GENERAL ENVIRONMENT OF THE COMPANY: Steinway’s external environment is only moderately uncertain and not very complex. The organization operates on a global basis.

The threat of entry is fairly low The threat of substitute product is fairly low The bargaining power of the suppliers is high Bargaining power of buyers varies with segment Rivalry among firms is severe .•COMPANY’S INDUSTRY STRUCTURE Steinway’s industry is moderately competitive and profit pressure can be mapped by looking at the five key forces.

The dealer network is an important part of Steinway’s strategy because of its role in the “Concert Bank” program. Attempt to meet their financial and other objectives by offering a unique and high quality product to sophisticated artists. .DESIGN COMPONENTS • STRATEGY: Primary strategy is a sophisticated niche and differentiation market.

The manufacturing process is craft based and dependent on the nature of the material. It is moderately interdependent because the major steps in the process are not linked in time. Making the “action sets” is independent of the “bellying” processes for example. .•TECHNOLOGY: Steinway’s core technology is highly uncertain and moderately interdependent.

. distribution and sales. The key functions are manufacturing.STRUCTURE: The corporate organization is division while the piano subsidiary appears to have functional structure.

System of keeping tracks of work-in-progress. and concert bank system inventories. 100% inspection (as opposed to statistical sampling)costs time and manpower is seen as critical to quality.MEASUREMENT SYSTEM: Formal measurement systems within the production process are clearly present. . finished goods.

Reward system includes both hourly and piece rate processes The organization maintains union relationships  Steinways undertakes : -workers retention programs -global hiring -provides compensations & benefits -training programs .HUMAN RESOURCES SYSTEM: Human resource system is highly developed.

CULTURE: The dominant focus is on: -the high end segment -craft nature of the production process -important of the concert bank program -long history of family influence all point to culture of quality -craftsmanship -responsiveness .

. The moderate complexity and uncertainty in the general environment argue for a strategy that is flexible enough to address the few critical dependencies but formal enough to control.OUTPUT ORGANIZATIONAL EFFECTIVENESS: The first concern is between the environmental inputs and the strategic orientation.

II. formal inspection system and responsiveness culture of the organization suits the best . There appears to be a good fit between the strategy and other design components. I.The second concern is the alignment of the design component . They intend to differentiate its product by serving the high-end segment with unique high quality pianos but a broad product line could dilute the focus. For this purpose the flexible structure. The differentiated strategic focus on creating sophisticated and unique product.

Feedback from customers were taken which ensures the artist demand and emerging trends in sound IV. II. The production process is craft based and the functional structure promotes specialization and professionalization of skills and knowledge. the marketing and production function was facilitated .Thirdly. Due to well developed Human Resource System. I. It built loyalty into customers and ensured future demand III. the technology is well aligned and support the structure.

Formulizing rather than changing the Steinway strategies II. measurement systems and human resource system .RECOMMENDATIONS: On the basis of diagnosis of Steinway organization two possible intervention are suggested: I. Increasing the integration and coordination of its structures.

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