Steinway & Sons: Buying a Legend (A) Case Solution

2. Can Steinway’s resources and capabilities be easily replicated by competitors?

The capabilities of the technology can be replicated by competitors. An example is the replication of this capability by Yamaha. The replicable resources also include the infrastructure (manufacturing facilities) of the company. However, the company puts in a lot of time, effort, and capital in the development of a single piano. With high volumes sold and price as the differentiator for the competitors, this capability cannot be easily replicated.

3. Evaluate the competitive threats that Steinway faces from its competitors, especially Yamaha.

Steinway has a tough competition from Yamaha, which has a greater market share compared to Steinway. This is because the company offers greater product diversity in terms of price.

Also, Yamaha had a high market share in Asia as well. The company had duplicated the technology that Steinway had produced which was a major threat to the competitive advantage that Steinway held for the piano industry. Steinway had not tapped into the large potential markets in Asia, including Japan, South Korea, and China. This market was held by Yamaha, which was a threat to Steinway’s business.

4. Yamaha has been unsuccessful in breaking into Steinway’s competitive space. What recommendations would you give Yamaha?

Yamaha had managed to replicate the technology that Steinway had adopted to manufacture its pianos. It had managed to develop grand pianos, and their sales were far greater in number as compared to Steinway. However, the perception and brand development of Steinway is way superior to that of Yamaha. This is because of the perception about the quality of Steinway products that has been developed over the years. To Yamaha, the recommendation would be not to base the differentiation of their grand pianos based on price. This is because the reduced price develops a perception of inferior quality. Whereas, Steinway has maintained its price level giving the perception that it is high quality.

5. Is Steinway’s plan to leverage its capabilities through its Boston Piano line a good idea?

The Boston piano line is mid-priced and to gain market share, the company maintaining its product line to Boston line is a good idea. This is because of the competition having a diverse portfolio of products. To differentiate in this mid-priced category, Steinway should leverage on its capabilities to develop a competitive advantage for the company. This would mean that the company has a focused low cost strategy in which the price for only a single product line is lower compared to the other. Also, these pianos should be embedded with the Steinway label; the brand name is a valuable resource for the company. The value curve of reducing, eliminating, adding, and raising should be implemented. This would mean that the price be reduced, the new product line is raised in the market. This would help the company in the development of new markets.