October 22, 2008 // Franchising.com // Bang & Olufsen President and CEO Karl Kristian Hvidt Nielsen pledged renewed focus on product development and sales when he presented the new corporate strategy today.
Bang & Olufsen will increase its focus on developing and manufacturing its trademark, cutting edge audio and video products. At the same time, the Danish-based corporation will streamline its global sales organization to ensure that a visit to a Bang & Olufsen store is never less than a highly professional and exceptional listening and viewing experience.
These were the key messages when Bang & Olufsen President and CEO Karl Kristian Hvidt Nielsen presented the new corporate strategy at a press conference in Copenhagen.
"We will focus on further developing the core audio and video product portfolio which has made the company what it is today. We will, however, also focus on the development of bespoke audio systems for performance cars, which in recent years have contributed to strengthening the global competitiveness of the Bang & Olufsen brand," said Karl Kristian Hvidt Nielsen.
The CEO added that the increased focus on the core business means that Bang & Olufsen will not be involved in the development of mobile phones, co-branded products or stand-alone boxes such as DVD2 and HDR2.
"We need to get back on the track that produced iconic products such as the BeoSound 9000 music system and the BeoLab 8000 loudspeaker as well as strong concepts such as the MX television line and the BeoVision 7 TVs. These are the classic products and product lines that we are all proud of, and in the future we should focus on producing equally iconic products," stated Karl Kristian Hvidt Nielsen, adding that, already next month, Bang & Olufsen will launch a new classic in the making.
This innovative product combines traditional Bang & Olufsen values such as superb sound quality, understated beauty and real craftsmanship with leading edge digital technology which is increasingly integrated into the company's products. "I am confident that this products is utterly unique and unlike anything seen before," said Karl Kristian Hvidt Nielsen.
The CEO stressed that Bang & Olufsen will also be looking to develop its BeoLiving concept further to offer customers seamless integration and one-remote control of sound, picture, lights, air conditioning, gates, burglar alarms and all other electrical installations in the home. "We already offer customers a unique one-remote concept which we need to develop and refine further to achieve complete home integration," he stated.
At the same time, Bang & Olufsen will be reorganizing its worldwide distribution network, which includes more than 1,200 stores.
"First and foremost, we will be streamlining our sales organization. We currently have seven regional sales offices, which we will be turning into one global sales organization in order to focus one hundred percent on the dealerships and sales in our stores. That is what it is all about, nothing else," stated Karl Kristian Hvidt Nielsen.
The restructuring is to increase professionalism in the stores and make for a uniformly high customer experience. "We want to raise the bar to ensure that all customers who come to our stores are treated to a professional and memorable experience focusing on the highest possible quality picture and sound," explained Karl Kristian Hvidt Nielsen.
In the coming years, Bang & Olufsen will also hone its focus on high growth markets. "In the next one to two years, we aim to more than double the number of Bang & Olufsen stores in growth markets such as Russia and China. At the same time, we are sticking to an aggressive growth strategy for other expanding markets. It is only common sense that a global corporation like Bang & Olufsen should focus its resources on emerging markets and on opening new stores in these markets," said Karl Kristian Hvidt Nielsen.
At the presentation of the new corporate strategy, the chief executive officer also presented a cost saving programme aimed at returning Bang & Olufsen to profitability after a couple of quarters in the red. The retrenchment programme will cut projected costs by 160 million DKK, partly by cutting some 300 jobs, which, in turn, involves laying-off 165 employees.
"No one enjoys laying people off. On the other hand, I have to do what is necessary and best for Bang & Olufsen. It is with deep regret that we have to let so many employees go, but there is no alternative," stated Karl Kristian Hvidt Nielsen, who added that Bang & Olufsen will do its utmost to help employees affected by the lay-offs.
Karl Kristian Hvidt Nielsen also presented the new Bang & Olufsen top management. The President and CEO will still be the sole member of the board of management, but the top management team will include the following experienced executives:
As soon as possible, an internationally experienced brand marketing executive and a highly qualified product development executive to head up the R&D department will be also appointed.
"I have now got myself a really strong and very experienced team of top managers to whom working for Bang & Olufsen is not only a job but also a passion to which they are extremely dedicated. And, in fact, that is true of the vast majority of the people who work for Bang & Olufsen," said Karl Kristian Hvidt Nielsen.
The CEO concluded on the positive note that consumers too remain passionate about Bang & Olufsen. Having been selected as the most prestigious audio brand as well as the most prestigious video brand by the US-based Luxury Institute earlier this year, Bang & Olufsen was also voted Best Car-HiFi brand by the readers of leading German car magazine auto motor und sport in the Best Brand 2008 survey. Most recently, Bang & Olufsen finished fourth in the annual Coolbrands survey of the coolest, most stylish and innovative brands in the world.