Steinway & Sons Buying A Legend (A) Case Solution

2. Value Curve

Steinway & Sons needs to reduce its costs that have been rising. In order to add value to the business, they must market their products more aggressively. They need to eliminate the limited scope they have and expand into newer and emerging markets. Lastly, they need to continue to raise quality in order to achieve sustained competitive advantage.

3. Discussion Questions: 

1. What are Steinway’s resources and capabilities? Are they strong? Strengthening? Weakening? How do you know?

Steinway’s resources and capabilities include the technical knowledge and expertise that enable it to produce high quality products. Moreover, the traditional production technique instead of the assembly line is another capability that distinguishes them. Moreover, the brand name is also a big advantage. These resources are weakening as there is a lack of diversity and costs are rising which is resulting in a financial burden for the company. So they are showing signs of weakening, and they must invest in innovation. 

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

These resource capabilities I believe are difficult to replicate since Steinway has been producing pianos through the craft method and competitors such as Yamaha are using more automated processes which don’t give the traditional touch to the product as Steinway manages to do so. Another factor is the employees that Steinway has retained as valuable assets. Combined, the products were all very distinct i.e. no two pianos sounded the same; something rivals can never match given the modern production techniques. 

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

Japanese companies such as Yamaha and Kawai have been market leaders in terms of imports. Competitors produced both vertical and grand pianos and were focused at taking away share from Steinway. Steinway has witnessed rising costs whereas Yamaha has been able to lower prices considerably. Yamaha was a leader in the world market for grand pianos and was taking away market share due to its robust production techniques which is not the strategy adopted by Steinway. This has been a major source of concern for Steinway.