Teesside Business School

Module: Global enviroment and business strategy Assignment:

Business strategies of Bang & Olufsen

Submitted to:
Jonathan Scott

Submitted by:
Syed Waqas Ahmed (J9127456) Ahsan jalil Muhammad farooq Pariwat Jailampang chandrashekarreddy purma

Introduction
the product which is a loudspeaker is eletroacoustical transducer which can convert an electric signal to a massive amount of sound, with the entire help of an electrical signal the loudspeaker pushes a medium, and after that they could be hear by the ear, there are some elements during the present,but the reliable is the modern audio systems they are more desirable in respect for most audible differences while comparing the systems , mostly loudspeaker systems need more than one driver, particularly for better or louder sound pressure level , or for the accuracy as well, the single drivers are used to redone the seprate frequency ranges. The drivers are named and called subwoofers, woofers (low frequencies), mid-range speakers (middle frequencies), tweeters (high frequencies) and sometimes supertweeters optimized for the highest audible frequencies. The terms for different speaker drivers differ depending on the application. In double-way loudspeakers, there is no "mid-range" driver, so the task of reproducing the mid-range sounds falls upon the woofer and tweeter. Home stereos use the designation "tweeter" for high frequencies whereas professional audio systems for concerts may designate high frequency drivers as "HF" or

"highs" or "horns". When multiple drivers are used in a system, a "filter network", called a crossover, separates the incoming signal into different frequency ranges, and routes them to the appropriate driver. A loudspeaker system with n separate frequency bands is described as "n-way speakers": a 2-way system will have woofer and tweeter speakers; a 3-way system is either a combination of woofer, mid-range and tweeter or subwoofer, woofer and tweeter.
The big names in this this field are Bose Harman & Kardon JBL Pioneer Bang and Olufsen

COMPANY PROFILE:
Bang & Olufsen Type Founded A/S Public (OMX: BO B) 1925

Founder(s)

Peter Bang, Svend Olufsen

Headquarters Chairman Chief executive officer

Struer, Denmark Jrgen Worning : Kalle Hvidt Nielsen

Products Revenue

Audio and visual products 4,376 million DKK (2006/07)

Net income

524 million DKK (2006/07)[1]

Employees Website

2,520 as in (2007) http://www.bang-olufsen.com

COMPANY PROFILE

The company aims in that way to achieve companys state of the mind and always at the top of the big ambition that an ordinary customer wants out of it, the company was founded by two founders peter bang and svend olufsen in the late 1920s, and was appeared with these words Enterprising is needed - a neverfailing will to create only the best to persistently find new ways of improvement, their vision has been passing through generations and today they are forwarding those inherited powers of innovation and surprisingly strong new ideas to make the market compatible and the company itself more innovative in any aspect of the working in the company is very interesting , people have dedicated themselves to do the precious work of its ownkind and provide the company stability in this competitive atmosphere, The company is providing a rarely common platform for the people to show their qualities of experimenting new technologies, making new techniques, making new skills within the company to pass through the times and to cover the future challenges, company claimed to deal with the finishing of the products in the smallest detail. The Bang & Olufsen brand can be clearly seen as an excellence, they do have all the abilities to juxtaposed things and do come up with an entirely new product which has never been seen nor either heard before at all, The Bang & Olufsens status and prestige are the both most favourite thing for itself as a brnd that not only made pfoducts but also made drems , the power which is only desiredable in the dreams that power is only for you to play with the company keeps generating surprises and keeps hitting the entirely new grounds, The Bang & Olufsen with all of its creativity and all of its extraordinary and endless efforts keep proving itself as a number one contender within its market competitors and that market is surrounded all over the world, .

History
Peter Bang (1900-1957), son of Camillo Bang, a successful Danish businessman, showed great interest in radio technology from an early age. After graduating as an engineer in 1924, he spent six months working in a radio factory in the United States where he became familiar with the latest developments in the field. On his return to Denmark, he clubbed together with his student friend Svend Olufsen (1897-1949) whose parents made the attic of their manor house near Struer in Jutland available for experiments. When they officially opened their business in 1925, Bang concentrated on the technology while Olufsen dealt with the business interests. There were a number of successful developments in the 1930s and 1940s, including a sound recording system for the film industry, roofmounted loud-speakers for circus and army vehicles and the iconic Beolit 39 radio with a bakelite cabinet. Beolit 39 from 1938, B&O's first Radio in Bakelite Their work with radios and loudspeakers led them to the principle that their products should be capable of high fidelity musical reproduction: in Danishrlig musikgengivelse, meaning "honest music reproduction". They held the ideal that the music you experienced through their sets and speakers should reach your ears uninfluenced by the limitations of technology. To this end, psychoacoustics is an important factor in design and testing of B&O products as instrument-based testing. It was, however, many years before their business became significantly profitable. One huge setback, towards the end of the Second World War was that pro-Nazi saboteurs burnt down their factory at Gimsing in North-Western Jutland as punishment for the management's refusal to collaborate with the Germans. Undeterred, Bang and Olufsen rebuilt the factory and went on to develop a range of radio, radiogram and television sets in the 1950s which took on new design aspects when Ib Fabiansen joined the company in 1957. David Lewis, who became involved in B&O in 1965 went on to design most of the company's products after 1980. Products by B&O are often of different and distinctive design when compared to mainstream rivals. B&O hires designers rather than directly employing them in the company. Many of its products in the 1970s and 80s were designed by Jacob Jensen, whose design firm still operates today. From the 1980s onwards B&O's chief designer has been David Lewis. In the 1990s B&O opened dedicated B&O stores selling directly to users, instead of selling through retailers. Production of audio separates was discontinued in favor of mini-type audio systems sold, as was usual for B&O, at a price higher than the industry average. Due to the economic crisis of 2008 the company experienced a sharp decline in sales and announced significant losses. A restructuring plan included 300 layoffs in Denmark on 21 October 2008, and the abandonment of development of new mobile phones, MP3 players and stand-alone systems like DVD2 and HDR2. Instead the company will focus on its traditional strengths: high quality audio and video products as well as sound systems for the automotive industry. Bang & Olufsen manufactures a highly distinctive and exclusive range of televisions, music systems, loudspeakers, telephones, and multimedia products that combine technological excellence with emotional appeal. Bang & Olufsen products are sold by over 1,300 dealers in more than 100 countries in an extensive network of retail stores. Approximately 60% of these stores are B1-stores, which exclusively sell Bang & Olufsen products. The B1 stores account for 75% of the total turnover

Business-to-business partners:

Bang & Olufsen has in recent years entered into new business partnerships in many areas. For twenty years we have followed our customers from room to room as they fully equip their homes. We have now ensured that our systems follow customers into hotels when they are travelling and now even in their cars. In the last few years we have entered into and developed a series of working relationships with leading property developers to deliver audio and video products to exclusive property projects. We continue to offer total service before, after and during a sale, either directly or indirectly through our partners. BeoLab 9 BeoSound 4 BeoVision 8 Serenata BeoLiving Beo5 Hospitality industry: Bang & Olufsens partnerships with International hotel chains worldwide as well as with highly individual niche hotels guarantee quality entertainment solutions that add unique value and differentiation to world class, lifestyle hotel interior designs. Examples of major hotel chains where you can experience Bang & Olufsen are Hyatt International, Starwood Hotels & Resorts, Four Seasons and Mandarin Oriental. Automotive: Bang & Olufsen offers our automotive partners car audio systems with unprecedented sound quality and listening pleasure for the driver and passengers. Together with our traditional skills with manufacturing and aluminium finishing, our systems express a radical synthesis of emotional appeal and technological performance; an ambition that has long been the hallmark of Bang & Olufsen. Bang & Olufsens first major commercial partner was Audi, with the Advanced Sound System installed in the Audi A8/S8. Our working relationship with Audi has widened to cover a total of five Audi models. The Audi Q7 is now available with the Bang & Olufsen Advanced Sound System, while the new Audi A4 model and the Audi R8 and Audi A5/S5 models are available with the Bang & Olufsen Sound System. Yacht installations: Bang & Olufsen retailers have for many years offered customers entertainment systems for yachts. Architects and designers: Increasingly, custom installation of audio and video systems is a natural part of any home or business development project. Bang & Olufsen ensures that Architects and Interior Designers get the direct support they need, also with extensive online help. Other companies Bang & Olufsen ICEpower: Bang & Olufsen ICEpower in Lyngby, Denmark, is utilising ICEpower technology to create revolutionary power supplies, amplifiers and transducers for the automobile industry. ICEpower encompasses the whole signal path, from the audio source to the loudspeaker, and the technology also offers audio manufacturers and end-users a series of unique advantages, e.g. compact design, reliability, energy savings, competitive prices and of course - quality sound. These advantages have resulted in sales of ICEpower digital amplification platforms to mobile telephones, car audio systems, and high-end audio manufacturers.

PRODUCT AREAS
Loudspeakers: The use of patented digital ICEpower amplifier units, bass adaptation and control technologies, and exclusively licensed sound dispersion technologies place Bang & Olufsen loudspeakers among the best-performing in the world. All BeoLab loudspeakers are built on an Active Loudspeaker platform, meaning the amplifier is placed directly in the loudspeaker cabinet. Televisions: Bang & Olufsen offers a complete portfolio of flat-screen televisions from 23 to 65. All televisions utilise Bang & Olufsens VisionClear package of signal processing, picture optimising and room adapting technologies, to ensure the best possible picture in all situations. Music systems and digital media: Bang & Olufsen manufactures audio, DVD, digital and recordable media Systems that integrate beyond traditional home entertainment, bringing new digital media right into the living Room. These products offer elegance in design, great performance, and are a pleasure to operate. Telephones: The combination of skills with acoustics, a focus on user interaction and product integration, and the right industry partnerships ensures that Bang & Olufsen cordless and mobile telephones offer the best communication experience available. BeoLiving: Simply the finest and most complete entertainment experience possible at home. Total product integration in a home cinema room designed and adapted for your home with lighting, curtains, drop-down projection screen and all products controlled by just one remote control, the Beo4 or the Beo5. The BeoLiving concept is the ultimate Bang & Olufsen home installation tailored to the precise requirements of the customer. BeoLink: Move the experience around the home, not the equipment. BeoLink offers access to all CD, television, DVD and radio sources, as well as to digital media sources in any room in the house. All home entertainment sources anywhere around the house can then be controlled by the Beo4 or the Beo5. BeoLink was revolutionary when released over 20 years ago, and today remains the best for ensuring distribution of sound and picture, without deterioration in quality. One remote control: Just one remote control is all it takes to enjoy all Bang & Olufsen products. This is still the case if you link your products at home using BeoLink, or if you build the ultimate BeoLiving room. Product innovation and development: Bang & Olufsen has identified areas of core competence that are central to innovative product development and the engine of new business development. Areas in which we excel include picture, sound, user interaction, design, product integration, mechanical movements, materials and finish, and across all skill areas quality. The heart of Bang & Olufsens product development tradition lies in Struer, from the first idea leading to an entertainment concept or design to the torture testing of finished products. New ideas and concepts require new solutions and manufacturing processes, and every Bang & Olufsen product presents new challenges for our manufacturing processes. Some of the specialist production processes that take place in Struer include plastic moulding using Bang & Olufsen designed and manufactured tools, the milling, polishing, brushing, other specialist surface finishing of aluminium,and the silk-screen

and sublimation printing and UV-lacquering of plastic and aluminium parts. Bang & Olufsens aluminium anodising facility is one of the most advanced in the world. Both sub-assembly and final assembly of the products are carried out at our Struer facility and our new factory in the Czech republic.

New Product Development Process:

A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. A new product is influenced by the perceptions of marketers and consumers. It usually refers to a product which is new to the company or any product that is offered by a company which is relevantly different from the other products available in the market. Example: Square Group introduced Radhuni Masala Powder to the market whereas the company usually focused mainly on Pharmaceuticals before. New product development is the development of original product, product improvements, product modifications and introducing new products in a market through the firms own Research & Development team. The strategies that are followed in developing a new product are: 1. Idea Generation 2. Idea Screening 3. Concept Development & Testing 4. Marketing Strategy Development 5. Business Analysis 6. Product Development 7. Test Marketing 8. Commercialization

BeoSound 8 Think of a room, any room. A bedroom, guest room, or open-plan kitchen? In a summerhouse, chic apartment, or family home? Now just add BeoSound 8 to fill up your room with Bang & Olufsen sound and style. If you keep your music on an iPad, iPhone, iPod or computer, you are all set to discover the iconic style and breathtaking sound quality that has made Bang & Olufsen one of the most sought-after names in home audio. Move BeoSound 8 from room to room or hang it on a wall. All you need is a power outlet, your music player of choice, and a desire for real sound quality. Secure your iPad, iPhone, or iPod firmly in the adjustable holder and prepare for a surprise. The sleek speaker design gives little clue about the fidelity and depth of the sound that is about to come your way. The conical shape of the speakers on BeoSound 8 has two functions. Design-wise, the shapes disappear to create an unobtrusive impression from most viewing angles and make placement easier. In terms of audio quality, they eliminate standing waves by avoiding parallel surfaces. It may sound very technical, but youll find that the proof is in the experience. Playing music from your own phone, computer, or media player gives you the advantage of a familiar navigation environment. In addition, you can now download an app version of the sleek and stylish BeoPlayer for your docked iPad, iPhone, or iPod. You can also adjust sound levels and skip tracks quickly and conveniently on BeoSound 8 itself. Music on a docked or USB linked device can be controlled via the dedicated round remote control or of course your existing Beo4 or Beo5 remote controls if you already own other Bang & Olufsen equipment. To match your personal taste and the room you place it in, BeoSound 8 comes in either black or white with aluminium details and matching power cord. When you feel the need to add a splash of colour to the room, the list of options includes six fabric speaker covers in lavender blue, purple, green, yellow, black and white.

Some Special Benefits of Beo Sound 8

Room adaptation switch

BeoSound 8 offers flexible placement options to fit easily in your living space. You can hang it on a wall using a custom wall bracket or place it on a side table, where the speakers will appear to float millimetres above the surface. The conical speaker backs are excellent if you prefer to place your

BeoSound 8 in a corner. But a loudspeakers performance is strongly influenced by its physical position in the room, and a corner placement can be especially difficult, as the walls will tend to play along, muddling the bass level in particular. Luckily, Bang & Olufsen has a solution.

BeoSound 8

Specifications

DESIGNER DIMENSION MATERIAL(S) COLOUR(S)

David Lewis W x H x D/ WEIGHT 66.1 x 23.9 x 16.4 cm/4.25 kg Painted plastic, Aluminium and Fabric Silver/white with white fabric front cover White/black with black fabric front cover

POWER CONSUMPTION LOUDSPEAKER(S)

Typical: 10 W; Standby: 0.4 W CABINET PRINCIPLE Sealed box EFFECTIVE FREQUENCY RANGE* 38.3 - 24,000 Hz

CONNECTIONS

iPod/iPhone/iPad connector, mini-USB Line-in via Phono

ACCESSORIES

BeoSound 8 remote control (included) Aluminium spikes (included) Wall bracket (included)

Fabric frames: Yellow, purple, green, lavender blue, black and white Fabric frames: Yellow, purple, green, lavender blue, black and white

SWOT ANALYSIS Strengths

1) Unique products, unique design and a very strong brand in Europe and increasingly in the U.S. 2) Beyond design, the very functionality of the b n o unique products including integration between B n o different products which lifts them from the competition 3) The quality of sound in the B and o products is a strength used as a competitive tool 4) Strong distribution network ensures the continued ready profiling and differentiation of B and o products 5) It is a core competency that is hard to copy at bno are very adept at treating aluminum surfaces.

Weaknesses
1) Although b&o products are unique among audio and TV products As the group in principle compete with all other manufacturers of luxury goods 2) The Group's products are comparatively cyclical consumption of luxury goods is declining when the economy develops weak or negative While the Group's cost structure is not very variable why declining sales, the hard through on the bottom line 3) Most of the Bang costs are in USD and EUR which is a weakness compared to an increasing proportion of revenue earned in other currencies

Opportunities
1) After having increased the margin through the conversion of Retail is now again time to generate growth Market conditions are hardly better for the group in Scandinavia UK and Continental Europe while the U.S. continues to lag a bit in terms of economic growth 2) The technical innovation is high and the trend is to launch new products more often This can help to promote the group's turnover 3) Bno marketing in the U.S. is still very limited and the market offers a huge growth potential for the Group 4) Development of new business areas like the new developments within for car stereos and mobile phones

Threats
1) As the technological development accelerates there is a risk that consumers are giving high priority update functionality rather than design 2) The new dealership strategy may prove to increase bno susceptibility to cyclical fluctuations if all stores must close the sale by failing 3) A few failed product launches can have an impact on the Group's turnover An example was the B n o launch of a variant 3 of the video machines in comparison with Betamax and VHS , where VHS ended up as the dominant technology The Group's growth is estimated to be helped by rising property prices and the use of frivrdi depressed or just stagnating house prices could adversely affect the Group's sales.

Bang & Olufsen Strategies:

1. Focuses on product development in order for Bang & Olufsen to concentrate on fewer product categories, i.e. primarily audio and video products. 2. Builds one common digital technology platform as the future technological foundation for the Group's products across its product portfolio. 3. Ensures more effective support for, and development of, Bang & Olufsen's dealer network by creating one general global sales organisation. 4. Increases the number of shops in growth markets. 5. Adjusts costs by DKK 160 million to achieve short-term profitability. 6. Appoints a new management team for the Group. Bang & Olufsen will focus on the development of audio and video products as well as sound systems for cars. These areas have traditionally driven the Group's activities and have been its most important turnover generator as well as contributing to the creation of the unique Bang & Olufsen brand across the world. Bang & Olufsen, therefore, will no longer develop products within categories such as mobile telephony, mp3 players and stand-alone systems like DVD2 and HDR2. The Group will also cease its involvement with new co-branded products. Existing products will, of course, continue to be fully supported. Instead, focus will be on reinforcing the Group's unique brand through the creation of innovative high quality audio and video products as well as sound systems for the automotive industry. The forthcoming digital audio product, scheduled for launch in November, is an excellent example of one such innovative product. With the BeoLiving concept, Bang & Olufsen offers an unrivalled concept in terms of total solutions for sound and picture and other technical installations in the home. The Group intends to develop and refine this concept even further into real Home Integration. This will allow users, through their Bang & Olufsen remote control, to control everything from sound and picture to curtains and air-conditioning etc, an area that is showing considerable growth around the world. As a natural progression, Bang & Olufsen also intends to focus more on solutions and products adapted to individual customers requirements. The management will also maintain the successful development of exclusive sound systems for cars. Sales of these systems are seeing a highly positive development and have reached a stage where management regards the segment as part of the Group's core business. Through more efficient utilisation of existing technologies and the targetted development of one general, future digital technology platform, Bang & Olufsen will not only achieve faster, but also more efficient product development. In the course of two to three years, this new digital technology platform will lay the foundation for all newly developed Bang & Olufsen products. Until then, the consolidation of the current technology platforms will ensure faster and more efficient development of high quality products from 2009.

Bang & Olufsen will continue to expand its current shop concept. With immediate effect, the management will initiate a process aimed at creating a more efficient global sales organisation. Until now, the Group's seven regional sales organisations worldwide have operated as independent units with their own back office and service functions. To ensure a consistent approach and respect for the whole, the management is centralising global responsibilities and, as a result, implementing a range of efficiency measures. The strategy plan comprises two further main components: The management intends to direct greater focus on the dealerships so that dealers with the strongest growth potential will take centre stage. Other dealers will also be given renewed attention when resources are available. There will also be focus on establishing a uniform sales system with clear guidelines, action plans and follow-up tools. The management intends to upgrade, and, more importantly, professionalise, the sales system. These measures will include a further development of the present sales staff into an international sales team of dynamic retail consultants with expertise within sales promotion, based on experiences with the best sales promoting initiatives within the global organisation. The ambition is for all Bang & Olufsen shops around the world to offer their customers a memorable experience of sound, picture, quality, professionalism and service-mindedness. The management intends to open more B1-shops in world markets with the strongest economic growth. Over the next two years, the aim is to more than double the number of B1 shops in key growth markets e.g. Russia and China. Other growth markets will also be subject to an aggressive growth policy. Bang & Olufsen is implementing a DKK 160 million cost reduction programme for the current financial year compared to the activities envisaged at the beginning of the year. The purpose is to adjust the cost level to the Groups new and lower turnover level of recent months. Bang & Olufsen, however, will remain a dynamic organisation and the Group will maintain its high activity levels for product development despite the adjustments. As part of the cost reductions, the Group has, as of today, abolished in the region of 300 jobs. As a result, 165 employees have been made redundant while the remaining positions will remain unfilled etc. Other elements in the savings plan include reductions in the purchase of external services. To secure the successful implementation of the new strategy plan, the Board of Directors and the Group's CEO have appointed a new management team which, together with the CEO, will assume responsibility for transforming the plan into action, rapidly, efficiently and accurately. Bang & Olufsen's Management Board will consist solely of President & CEO Karl Kristian Hvidt Nielsen who took up his position on August 1 this year. The management layer below the Management Board will comprise: Senior Vice President, Finance & Accounting, Randi Toftlund, Senior Vice President, Operations, John Bennett-Therkildsen and Senior Vice President, Sales, Michael Aagaard Andersen. The Management team will be also be supplemented by a further two positions: A high-capacity individual with expertise in international brand marketing and

 A highly-qualified expert who can meet the challenge of taking overall charge of Bang & Olufsen's product development. Based on his qualifications and experience, President and CEO Karl Kristian Hvidt Nielsen will personally head up - and ensure the ongoing progress of - product development until the right person has been appointed. Seen in isolation, the strategy plan does not change Bang & Olufsens expectations for the current financial year. Traditionally, the Group's turnover for November and December is substantially above average. This, combined with the recent turbulence in financial markets has increased uncertainties. As a result, the Group will not give an estimate for the full 2008/09 financial year until the publication of the interim report for the half year on January 15, 2009.

Speed of sound

See list of international PR contacts

Finance BANG & OLUFSEN A/S 8 OCTOBER 2010

Profit and loss account
Bang & Olufsen a/s
(DKK million) Group 1/6 - 31/8 2010/11 Net turnover Production costs Gross profit 2 Development costs Distribution and marketing costs Administration costs etc. Operating loss Result of investments in associates after tax 3 4 Financial income Financial costs Financial items, net Result before tax Tax on result for the period Result for the period 561.7 (336.9) 224.8 (75.4) (160.1) (18.6) (29.3) (2.9) 2.4 (4.9) (2.5) (34.7) 8.0 (26.7) 1/6 - 31/8 2009/10 565.0 (339.7) 225.3 (89.6) (169.6) (18.6) (52.5) (1.1) 6.3 (5.5) 0.8 (52.8) 10.2 (42.6)

Attributable to: Shareholders of the parent company Minority interests (26.7) (26.7) (42.7) 0.1 (42.6)

Earnings per share Earnings per share, DKK Diluted earnings per share, DKK (0.7) (0.7) (1.2) (1.2)

Balance sheet Assets

Bang & Olufsen a/s
(DKK million) Group 31/8 - 10 Notes Intangible assets Goodwill Acquired rights Completed development projects Development projects in progress Total intangible assets Tangible assets Land and buildings Plant and machinery Other equipment Leasehold improvements Tangible assets in progress and prepayment for tangible assets Total tangible assets Investment property Financial assets Investments in associates Other financial receivables Total financial assets Deferred tax assets Total non-current assets Inventories Receivables Trade receivables Receivables from associates Income tax receivables Other receivables Prepayments Total receivables Cash Non-current assets classified as held for sale Total current assets Total assets 44.8 43.8 214.9 248.8 552.3 44.7 46.0 249.1 206.7 546.5 44.7 49.5 209.1 188.5 491.8 31/5 - 10 31/8 - 09

239.2 196.4 32.2 21.4 60.9 550.1 44.5

240.9 209.4 34.9 23.2 52.1 560.5 45.4

253.4 213.9 44.4 29.3 60.2 601.2 48.2

5.3 39.7 45.0 151.0 1,342.9 606.6

5.3 41.4 46.7 140.4 1,339.5 563.6

8.3 50.5 58.8 119.0 1,319.0 616.0

342.7 1.3 21.1 26.0 22.4 413.5 147.4 1,167.5 2,510.4

417.9 1.5 21.2 27.6 22.4 490.6 253.6 1,307.8 2,647.3

379.8 1.0 22.3 23.2 28.3 454.6 156.7 15.7 1,243.0 2,562.0

Group 31/8 - 10 Notes Equity Share capital Share premium Translation reserve Reserve for cash flow hedges Retained earnings Equity attributable to shareholders of the parent company Minority interests Total equity Non-current liabilities Pensions Deferred tax Provisions Mortgage loans Loans from banks etc. Other non-current liabilities Total non-current liabilities Current liabilities Mortgage loans Loans from banks etc. Overdraft facilities Provisions Trade payables Income tax Other payables Deferred income Total current liabilities Total liabilities Total equity and liabilities 362.4 232.1 21.6 (22.0) 871.3 1,465.4 1.5 1,466.9 362.4 232.1 13.1 (5.0) 892.1 1,494.7 1.5 1,496.2 362.4 232.1 (36.2) (0.1) 918.5 1,476.7 2.4 1,479.1 31/5 - 10 31/8 - 09

7.8 4.9 84.7 224.7 51.0 0.4 373.5

7.8 6.2 78.2 225.8 52.8 6.9 377.7

7.0 4.3 76.4 229.2 93.8 6.7 417.4

4.6 42.8 5.3 52.5 184.0 19.2 312.6 49.0 670.0 1,043.5 2,510.4

4.6 42.8 11.9 52.7 259.4 20.0 323.3 58.7 773.4 1,151.1 2,647.3

6.5 32.6 1.9 59.6 194.2 23.7 285.1 61.9 665.5 1,082.9 2,562.0

As expected, the Group's turnover for the first quarter of the 2010/11 financial year was DKK 562 million against DKK 565 million for the same period last year. Historically, the first quarter is not indicative for the year as a whole and the Group is committed to grow the business and has initiated a number of additional activities to be implemented up to the high season. Result before tax for the first quarter was negative at DKK 35 million against a negative

result last year of DKK 53 million. The Group's gross margin for the first quarter of the 2010/11 financial year was 40.0 per cent against a gross margin of 39.9 per cent for the same period last year. The Automotive business area continued to advance in the first quarter of the 2010/11 financial year in that turnover totalled DKK 91 million against DKK 49 million for the same period last year. After the end of the first quarter, Bang & Olufsen signed a contract with German BMW for the development of first-class sound systems for a range of BMW vehicles over the coming years. Bang & Olufsen maintains the expectations that the 2010/11 financial year as a whole will result in a positive development in turnover and a positive result before tax based on a gross margin not deviating significantly from the level achieved in the 2009/10 financial year. Expectations for the 2010/11 financial year

Q1 2 Product portfolio The Group's objective for the 2010/11 financial year is to support the growth ambitions for the branded business through a continued high activity level within product development. The Group therefore expects that approximately 25 per cent of the Group's turnover within the audio and video business will be derived from new products, with new defined as sales in the first 12 months after the launch. Distribution development Based on the recent positive turnover development in the mature shops, the Group plans to intensify the efforts to recruit new outlets. The Group expects that the total number of B1-shops will not be significantly different at the end of the 2010/11 financial year compared to the end of the 2009/10 financial year. Expectations for the Group result for 2010/11 Based on a continuing high activity level within product development and an increased marketing effort, Bang & Olufsen expects that the 2010/11 financial year as a whole will result in a positive development in turnover and a positive result before tax based on a gross margin not deviating significantly from the level achieved in the 2009/10 financial year.

FINDINGS
Bang and Olufsen (B & O) is a Denmark based high-end audio-video equipment manufacturer. The company has a tradition of creating the best and the first styles of products in its 80 year history. The company has been targeting fashion connoisseurs and sells its high-tech televisions, telephones, DVD players, loudspeakers, digital music players, and other products through some 1,500 stores around the world with UK and Denmark being the companys largest markets. B&O also has subsidiaries that manufacture medical equipment, telephones, and audio components. Following in line with the Danish reputation in revolutionary design and innovative products, B & O has won global acclaim as one of the leaders in innovation and product development. The company has been catering to a very niche market segment and has even collaborated with some high volume manufacturers like Samsung Electronics of South Korea. A number of its products have earned a place in the Museum of Modern Art, New York and the company enjoys a strong loyalty from its existing customer base. Although an external look at B & O shows a picture of strength and high performance, all is not well at the company. The companys future may not result in the same growth and profit that it has seen in the years leading up to 2004 (Austin, R. D. & Beyersdorfer, D., 2007). B & O is faced with uncertainty as it encounters troubles due to higher costs, competition, economic crisis, and management problems. A lot has to do with the way in which B & O manages its innovation and how it approaches its innovation strategy.

CONCLUSION and suggestions

From the above critical analysis of the group s business using various strategic models, it is crucial for bang & Olufsen to implement these recommended strategies if its ever going to remain in the business, due to the tensed competition coming from core competitors like IKEA ,PC WORLD, MEGA STORE and curry s, these strategic recommendations once properly implemented will result in the company gaining some competitive advantages over competitor mentioned above.

 Reduce price; the company could at least gain 20% market shares and an addition of 25% by increase in gross earnings if the group can strive to reduce its product prices like competitors  Increase market budget; the company should spend more on marketing tools to create more awareness of its products  Expand its operation; bang & olufsen is based in the European market they should expand their business to Asia  Introduce more innovative products; bang & olufsen has been hailed excellent from the start to the end over the years  Enhance an effective distribution machinery; bang & olufsen should expand its distribution network  Adopt diversification strategy; bang & olufsen needs to diversify into other products like PC S, mobiles and cable network

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