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Bose Corporation
Please see full case in attached file.
This is a master level report and case study analysis of Bose Corporation discussing about the company's marketing strategies and business philosophies.
Attached its case study and synopsis with questions. Basic requirements and guidance by lecturer have been written in red below each question.
Harvard referencing is crucial and effective application of diagram to show understanding is necessary for this report. Fair number of referencing is needed as well.
Bose: Competing By Being Truly Different (Please read the case as per attached)
Synopsis
The Bose Corporation has been around since the 1960s. It has come to be known for its high- end speakers and headphones. It is a brand with very high level of equity and is the most trusted brand of 22 best-known consumer technology brands. As the brainchild of its founder, the Bose Corporation has been very successful financially as well.
Yet Bose the company and Bose the man are very much intertwined. Amar Bose founded the company in the 1960s. He has kept it private in order to control the degree to which the company invests in and conducts research. This he considers the lifeblood of the company. Time and time again, he has ignored existing technologies and started entirely from scratch.
It is this philosophy that has lead to truly groundbreaking innovations. Bose Corporation has marketed speakers and headphones and will soon release an automotive suspension system that unlike anything else on the market.
Questions
- Based on the business philosophies of Amar Bose, how do you think the Bose Corporation goes about analyzing its competition?
- Describe Bose's competitor analysis i. identify competitors, accessing competitor's objectives, strategies, strengths and weaknesses and reaction patterns.
- Bose is product-focused company use competitors as channel to understand customer needs.
- Actually Bose is customer focus without knowing it.
- Which of the three approaches to marketing strategy best describe Bose's approach? ( words)
- Entrepreneurial, Formulated and Interpreneurial
- Bose is using Entrepreneurial and Intrepreneurial marketing strategy.
- Bose definitely not formulated marketing strategy
- Describe accordingly
- Using Michael Porter and Treacy and Wieserma frameworks presented in the text, which basic competitive marketing strategies does Bose pursue?
- Under Michael Porter, Bose could be adopting cost leadership or differentiation strategies. Use references to argue.
- Bose should be product leadership based on Treacy and Wieserma philosophy in competitive marketing strategy.
- What is Bose's competitive position in its industry? Do its marketing strategies match this position?
- Bose is market leader i. Customer focused ii. Product leadership iii. Larger market share
- Market leader strategies: i. Expand total market - use Ansoff model to expand to different markets. ii. Protect market share - promotions, sampling, free trial iii. Expand market share
- Explain Bose using which strategy based on the market leader strategies after explaining all three
- In your opinion, is Bose a customer-centric company?
- Define customer-centric
- Bose is not a customer-centric company due to its function focus in R&D and as market leader.
- But in fact Bose is focusing on customer without knowing it. In a way, Bose could also be considered as customer centric.
- This is a tricky question; a smart way of writing the argument will be needed. Use references as an argument for your statement. Avoid contradict statements.
PS: Throughout the report, diagram is very important and the relevant use of diagram is the ultimate determination of this report
Bose: Competing by Being Truly Different
- Based on the business philosophies of Amar Bose, how do you think the Bose Corporation goes about analyzing its competition?
From the article content, it is clear that Bose Corporation does spend time to analyze its competitors’ strategy because company’s philosophy from the beginning is ignoring competitors’ technologies and starting entirely from scratch. We see this on every product line of this company. As a matter of fact, Bose Company uses competitors’ strength (their technology) to understand customer needs; Actually, Bose Company considers the competitors’ strength (their technology) a weakness, meaning following a different path of innovation than their competitors.
- Which of the three approaches to marketing strategy best describe Bose’s approach?
There are three approaches for marketing strategy Entrepreneurial, Formulated and Interpreneurial. Entrepreneurial marketing strategy best describes Bose’s approach used in a closed connection with Interpreneurial strategy. Bose Company was started by Amer Bose who had
In the late 1980s, Bose salespeople went door to door to demonstrate the company's speakers, promoting what the company promised was rich sound without the bulkiness of other systems. "You had to hear it to believe it," says Bose President Bob Maresca. A lot of people heard -- and believed.
Many still do. Bose ranked as the most trusted consumer brand by far among 22 well-known tech companies, ahead of heavyweights like Apple (AAPL), Microsoft (MSFT), Dell (DELL), Intel (INTC), and Sony (SNE), according to a recent survey of 4,732 U. households by Forrester Research.
What's more, many people are likely to keep on believing in Bose, according to extrapolations made by Forrester. An estimated 17 million households plan to buy Bose products, compared with 7 million expecting to buy from Apple, Forrester says. This was the first time Bose was included in Forrester's trust survey, but the findings don't appear to be a fluke.
Market researcher NPD Group, in a survey of more than 600,000 people between April, 2005, and March, 2006, found that in home audio, Bose was less than a percentage point away from No. 1 Sony in terms of customers' repurchase intent. A bigger proportion of people who bought Bose gear said they were likely to purchase it again than did buyers of nearly every other brand.
FRUITY OVERTONES. What's bolstering Bose's marque? In recent years, it has been an association with Apple. The companies collaborated on a set of speakers for Apple's digital music player, the iPod, and in 2004, Bose released the $299 SoundDock Digital Music System. "They pioneered the all-in-one premium iPod speaker system," says Ross Rubin, an NPD Group analyst. Speakers turned out to be the best-selling category among iPod accessories, a fast-growing $5 billion market, according to Envisioneering Group.
The fact that Apple admitted licensing its iPod connector technology to Bose and, at first, offered the speakers exclusively in its own stores was a big vote of confidence from a company not known for forging alliances. "It was the first time [Apple CEO Steve] Jobs acknowledged an outside collaboration," says Richard Doherty, director of Envisioneering Group.
For Bose, that made a huge difference. "There's been an uptick in their image since the iPod has been connected to it," says Nick Shore, founder of branding consultancy Way Group in New York. "They feel almost like the Mercedes Benz of sound systems" (see BW Online, 2/15/06, "Delivering Two Kinds of Quality").
What Steve Jobs giveth, he can also take away. In February, Apple released its own brand of iPod speakers, generating concern Bose sales would suffer (see BW Online, 3/01/06, "Apple's Latest Audio Offensive"). But Apple's speakers are bigger, more expensive, and appeal to a different customer, says Rubin. The SoundDock is still featured prominently at Apple's stores and in Apple ads. "Our relationship with Apple has been good," says Maresca.
MARKETING MISTRUST. In fact, some analysts expect Bose will introduce more iPod- related gear in the next several months. "Bose is [in iPod accessories] for the long run," says Phil Hess, director of Bose's home entertainment division. "It's a segment we are going to focus on."
Another focus for Bose is marketing. The closely held company doesn't disclose spending figures. But detractors say a lavish ad and marketing budget keeps prices and visibility for Bose products higher than is warranted by their sound quality. Others say the company overemphasizes design to the detriment of audio.
Bose is unfazed by the brickbats. "Unless we believe we offer significantly better performance, we won't [make a product]," Maresca says. "We are careful to never over- promise." The company, like many rivals, offers a 30-day money-back guarantee on its products.
AMPLIFY THE BRAND. Besides, there's a lot to be said for Bose's sleek design, say several analysts. Bose's Wave music system's plastic cover has no molding marks -- no mean manufacturing feat. The company's Lifestyle home theater in a box has only two speakers, instead of the industry-standard four, making it easier to set up, explains Rubin. "They have components that look good, don't take up a lot of space, don't have controls all over the place," he says.
Then there are the stand-out features, such as automation. Bose uses research into how a human ear responds to sound to build automated tone control into products. Many other audio makers' gadgets require the user to use knobs and dials to adjust volume. With Bose, sound levels are adjusted by Bose's ADAPTiQ technology, which analyzes a room's acoustics and makes automatic adjustments aimed at improving sound performance of speakers.
Industry insiders believe Bose could leverage its growing branding power to expand into new product categories and markets. Today, Bose sells everything from the SoundDock on the low end to the $3,999 Lifestyle home entertainment system. The company has a decision to make: "Do [they] want to expand the market and compete more aggressively on price, or just sell to the existing, [high-end] customer base?" says Ted Schadler, a Forrester analyst. Bose potentially could move beyond sound systems into consumer electronics more broadly, he says.
UNORTHODOX ENTERPRISE. Many analysts expect the company to introduce a competitor to the Sonos Digital Music System that allows users to beam music wirelessly from the PC to a stereo, speakers, or home theater system (see BW Online, 5/8/06, "Sweeter Music From Sonos"). Given that Bose has already introduced the AL8 wireless link, allowing users to listen to their Lifestyle system remotely, a Sonos-like device would be a logical extension.
But the company's product strategy is set by its founder, Amar Bose, whose eccentricity is legendary. Still the CEO after more than 40 years, Bose, 76, invests all of the privately held outfit's profits back into research. "We are not in it strictly to make money," says Maresca. "Dr. Bose is extremely eclectic in his research interests. The business is almost a secondary consideration." That said, since 2004, when the company reported $1 billion in revenues, Bose's sales have risen 38%.
An electrical engineering professor at the Massachusetts Institute of Technology, Bose founded the company in 1964 out of frustration with the quality of speakers on the market. He is fond of saying, "if I worked for another company, I would have been fired a long time ago," according to published articles. Indeed, Maresca recalls how Bose invested tens of million of dollars over 19 years developing headset technology before making a profit. Now, headsets are a major part of the business.
Among the masses, Bose is one of the most respected, trusted and beloved brands when it comes to audio speakers and headphones. That’s their Core Target Market. But to serious Audiophiles, with a discerning ear, Bose is total crap, with inferior technology, shabby production standards and resulting poor value. This might be the equivalent about asking a Foodie what they think of Morton’s Steakhouse or Ruth’s Chris.
Bose has a great word of mouth reputation. I remember when I first heard of Bose, it was a guy at work, who seemed to know more than I did say definitively “Bose are the best speakers you could buy”. I immediately believed this to be true and have felt that way ever since. I proudly own Bose headphones, a Bose Docking Station and Bose Speakers in my car. I’m highly satisfied.
I’d love Bose Speakers for my TV, having drooled over the sound for years. So I went into a Bose store, listened to a few different options and they sounded amazing. So I looked on the Bose box, and there was no mention of Watts at all or really anything. My first thought was “wow, Bose is just such a great brand, they don’t really need to get into those tiny details like watts”. But I wanted to compare brands just to ensure I was spending good money. So I went on line and here’s the specs comparison:
That brings us to The Bose philosophy: Unlike other audio product manufacturers, Bose does not publish specifications relating to the measured electrical and objective acoustic performance of its products. This reluctance to publish information links back to the classic Amar Bose paper presented in 1968 “On the Design, Measurement and Evaluation of Loudspeakers”. In the paper, Bose rejects these measurements in favor of “more meaningful measurement and evaluation procedures”, and considers the human experience the best measure of performance.
For Bose, sound is an experience, not a statistic. Bose spends all their effort and dollars on perfecting the in-store sound demo so they can show off Bose’s great sound quality and let consumers be the judge of their sound. And yet it’s arguably tough for the average ear to distinguish. Bose invests a lot of money into their own retail stores
as well as the store-in-store concepts. That way, it can control the experience the consumer gets with its products–ensuring the consumers hear Bose at it’s best.
Bose has figured out how to make their brand work to their advantage–the proof is in the sound you hear in the store. There’s a certain magic that happens in store when listening to the Bose stereo system. Despite what Audiophiles say, Consumer feedback from the masses is definitively in favour of Bose with very high scores. And in a most recent poll, Bose is the #3 trusted brand in Consumer Electronics, so they must be doing something right. It’s tough for consumers to separate Product from Brand, even a brand like Apple has had success in this confusion where consumers think Apple has “great products”. To the masses, Bose is a great brand and has great products.
BOSE
sound positioning by Barry Silverstein September 3, 2007
Not people. Not dogs. Not even leftover pineapple slices at a third-rate buffet. Nothing ages faster than technology. Today’s popular music listening devices will be tomorrow’s junk, occupying miscellaneous kitchen drawers and torn, cardboard boxes shoved into dark closet spaces. As technological advances come and go, so do the fortunes of the companies who manufacture them. So it’s worth revisiting one of the industry’s most formidable survivors: BOSE. Just how is it doing now?
Short answer: very well. BOSE Corporation is one of the few Massachusetts technology companies founded in the mid-1960s that’s not only still around—it’s healthy and growing. It continues to carry the name of its founder—Amar G. Bose—who, forty-five years later, is still the company’s chairman and
considerable success with a marketing method that is often restricted to low-dollar merchandise.
One of the reasons BOSE is successful at targeted marketing is the fact that it enters and dominates
select niches. BOSE:
custom-designs sound systems for auditoriums, hotels, restaurants, and other performance venues and business uses.
creates automotive sound systems for select car models. BOSE offers a line of professional audio systems to musicians.
offers a variety of high-quality sound systems and home theater speaker systems for consumers.
manufactures acoustic noise-canceling and audio headphones for consumers and airline pilots and passengers.
Each of the qualities outlined above—technology, design, and marketing—has become a strong,
differentiating brand attribute for BOSE. A March 2006 study by Forrester Research indicated that BOSE
was among the three most trusted brand names in consumer electronics in the US. Because BOSE
products are premium priced and never discounted, they are sometimes assailed by industry critics and
in online customer forums for being over-priced. Given advances in sound technology and product
quality by competitors who aggressively price their products, the criticism may be justified. Nevertheless,
continued consumer loyalty demonstrates that the superior quality and design of BOSE systems are
worth the price.
BOSE understands that to enjoy longevity and sustained profitability companies must do more than
simply maintain the status quo. BOSE has learned how to adapt without losing its values, which has
strengthened an already strong brand. It continues to take the high road, manufacturing only high-end
technologically sophisticated products for select niche markets. As a result, the BOSE brand continues
to be associated with superior quality. Which makes the BOSE brand a pretty sound investment.
A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a good quality product or service at a lower cost than your competitors. These low costs should translate to profit margins that are higher than the industry average. Some of the conditions that should exist to support a cost leadership strategy include an on-going availability of operating capital, good process engineering skills, close management of labor, products designed for ease of manufacturing and low cost distribution.
A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as being unique "throughout the industry". The emphasis can be on brand image, proprietary technology, special features, superior service, a strong distributor network or other aspects that might be specific to your industry. This uniqueness should also translate to profit margins that are higher than the industry average. In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation.
A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more 'intense' form of either the cost leadership or differentiation strategy. It is designed to address a "focused" segment of the marketplace, product form or cost management process and is usually employed when it isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation. It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition, profit margins can be very high.
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Fundamental Business Strategies
from "The Discipline of Market Leaders" by Treacy and Wiersema
Companies must chose from among one of these three fundamental strategies if they are to build a workable organization.
A. OPERATIONAL EXCELLENCE (to deliver quality, price and ease of purchase and use)
Processes for end-to-end product supply and basic service that are optimized and streamlined to minimize cost and provide hassle-free service
Operations that are standardized, simplified, tightly controlled and centrally planned, leaving few decisions to rank-and-file employees Management systems that focus on integrated, reliable, high-speed transactions and compliance to norms A culture that abhors waste and rewards efficiency
B. PRODUCT LEADERSHIP (creating the best products or services)
A focus on the core processes of invention, product development, and market exploitation
Bose Corporation
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