steinway & sons 1

Steinway & SonsSteinway & Sons((piano makers)piano makers)

Presented byPresented by NISHANT NISHANT

PARMARPARMAR

M.B.A. SEM- 2

Company BackgroundCompany Background

Established in new york city in 1853 by Established in new york city in 1853 by Henry Engelhard Steinway.Henry Engelhard Steinway.

The co. had long been recognized as The co. had long been recognized as the leader in the market for the high-the leader in the market for the high-quality pianos.quality pianos.

The firm had prospered very fast The firm had prospered very fast largely b’cos of its technical excellence.largely b’cos of its technical excellence.

After a year co. won gold medal at After a year co. won gold medal at Washington for its square pianos.Washington for its square pianos.


After another year co. won another After another year co. won another first prize at NY industrial first prize at NY industrial exhibition.exhibition.

The larger factory was constructed The larger factory was constructed on Forth avenue in new york.on Forth avenue in new york.

This promotion helpful in opening This promotion helpful in opening steinway hall in 1866 which helpful steinway hall in 1866 which helpful for NY city’s major concert for many for NY city’s major concert for many years.years.


Henry died in 1879 leaving the Henry died in 1879 leaving the leadership of the firm to his son leadership of the firm to his son William.William.

William meanwhile consolidating & William meanwhile consolidating & expanding operations.expanding operations.

A London sales branch was opened in A London sales branch was opened in 1875.1875.

A new factory was built in Hamburg A new factory was built in Hamburg in 1880.in 1880.


William embarked on his grandest William embarked on his grandest venture by purchasing 400-acre venture by purchasing 400-acre farmland on long island in 1871.farmland on long island in 1871.


In April 1972 co. became the member In April 1972 co. became the member of CBS Musical Instrument Division.of CBS Musical Instrument Division.

Which included fender guitars & Which included fender guitars & amplifiers, Leslie speakers, Rogers amplifiers, Leslie speakers, Rogers drums,etc.drums,etc.

In 1977 CBS appointed non family In 1977 CBS appointed non family president till late 1978.president till late 1978.

Than CBS appointed peter perez (mba Than CBS appointed peter perez (mba from indiana uni.) from indiana uni.)


peter perez was “people oriented” peter perez was “people oriented” He hoped eventually to expand co.’s He hoped eventually to expand co.’s

output by improving existing output by improving existing operations.operations.

The Steinway TraditionThe Steinway Tradition

Steinway pianos had been received Steinway pianos had been received enthusiastically by Knowledgeable enthusiastically by Knowledgeable musicians.musicians.

In the late 1970s 95% of aii classical In the late 1970s 95% of aii classical music concerts featuring a piano soloist music concerts featuring a piano soloist were performed on a Steinway ground.were performed on a Steinway ground.

All Steinways were still assembled by All Steinways were still assembled by craft methods ,with little use of craft methods ,with little use of assembly-line techniqueassembly-line technique


The long island plant produces 3500 The long island plant produces 3500 instruments in 1980 in which 2000 instruments in 1980 in which 2000 grand & pianos 1500 verticals.grand & pianos 1500 verticals.

At Hamburg plant produces 2000 At Hamburg plant produces 2000 pianos in which 1400 grand & rest pianos in which 1400 grand & rest were verticals.were verticals.

They brings their aid in purchase of They brings their aid in purchase of millions of dollars including Rosewood millions of dollars including Rosewood from Brazil, Mahogany from Africa from Brazil, Mahogany from Africa Sitka spruce from Alaska.Sitka spruce from Alaska.


R&D were also important at Steinway R&D were also important at Steinway new methods, material ,design new methods, material ,design features often originated with the firm.features often originated with the firm.

Steinway concert service maintained a Steinway concert service maintained a “bank” of pianos in cities across the “bank” of pianos in cities across the U.S for the use of Steinway. U.S for the use of Steinway.

Steinway was far better represented in Steinway was far better represented in the market for grand pianos not for the market for grand pianos not for vertical pianos.vertical pianos.

problemsproblems In 1980 less than 2% of all pianos sold in In 1980 less than 2% of all pianos sold in

US were Steinway vertical pianos.US were Steinway vertical pianos. Co.’s position as a manufacturer of vertical Co.’s position as a manufacturer of vertical pianos was less established . It is b’cos of pianos was less established . It is b’cos of

limited production volumes, backlogs limited production volumes, backlogs (arrears of work) were common.(arrears of work) were common.

In 1980 co.’s revenues were In 1980 co.’s revenues were $50million,compared with piano industry $50million,compared with piano industry total sale of $424million .co.’s pretax profit total sale of $424million .co.’s pretax profit was near by only 15%.was near by only 15%.

The market and The market and CompetitionCompetition

In 1909 the total units produced was 3,64,545 In 1909 the total units produced was 3,64,545 in US.in US.

The decline of the production of 34,305 units The decline of the production of 34,305 units during the great depression in 1933.during the great depression in 1933.

years years no.of unit sold including no.of unit sold including importsimports

1940 1,36,3321940 1,36,332 1950 1,72,3311950 1,72,331 1960 1,98,2001960 1,98,200 1970 1,93,8141970 1,93,814 1980 2,23,000(approximately)1980 2,23,000(approximately)

The market and The market and CompetitionCompetition

In 1977 there were 16 In 1977 there were 16 establishments whose primary establishments whose primary business was the production of business was the production of pianos. pianos.

Total employed 4700 people. Wages Total employed 4700 people. Wages paid to them $32.9million.paid to them $32.9million.

About pianosAbout pianos

Two segments of pianos Two segments of pianos

1) Grand pianos1) Grand pianos

2) vertical pianos2) vertical pianos Grand pianos were larger & more Grand pianos were larger & more

expansive expansive It generally possessed a louder & more It generally possessed a louder & more

resonant tone.resonant tone. The market for Grand was much The market for Grand was much

smaller than for vertical.smaller than for vertical.

Domestic competitionDomestic competition

Main two competitors Main two competitors

1) Baldwin piano & Organ co.1) Baldwin piano & Organ co.(subsidiary of Baldwin-united (subsidiary of Baldwin-united co)co)

2)Kimball international (Austrian 2)Kimball international (Austrian subsidiary)subsidiary)

Approximately 800 dealers involved Approximately 800 dealers involved domestically (including 140 of domestically (including 140 of Steinway)Steinway)

Foreign competitionForeign competition

Yamaha & Kawai were two japanese Yamaha & Kawai were two japanese firms.firms.

In 1980 23000 pianos imported in u.s.In 1980 23000 pianos imported in u.s. Out of these 21700 were japaneseOut of these 21700 were japanese Yamaha total sales in u.s.was Yamaha total sales in u.s.was

$1.5billion$1.5billion

nearly produced 250,000 pianos in nearly produced 250,000 pianos in 1980 most of them were vertical & 1980 most of them were vertical & babygrandsbabygrands


Production Process was highly automated.Production Process was highly automated. Yamaha was only one piano makers in the Yamaha was only one piano makers in the

world to cast its own metal frames world to cast its own metal frames The price of japanese piano was quite low.The price of japanese piano was quite low. In 1980 it was range between $ 2155 to In 1980 it was range between $ 2155 to

$4485 in u.s. (grand begins at $4900)$4485 in u.s. (grand begins at $4900) In 1980 yamaha medium grand sold for In 1980 yamaha medium grand sold for

$6300 while steinway’s price at $10500$6300 while steinway’s price at $10500


Both yamaha and kawai hope to Both yamaha and kawai hope to overcome steinway’s dominance by overcome steinway’s dominance by devoting special attention to there devoting special attention to there top of the line vertical top of the line vertical pianos ,designing for musical school pianos ,designing for musical school and other institutional buyers and other institutional buyers

Steinway’s production Steinway’s production process.process.

Manufacturing operation at Manufacturing operation at steinway’s divided into two parts steinway’s divided into two parts

1) traditional woodworking operation 1) traditional woodworking operation related to furniture making related to furniture making

2) manufacturing and assembly 2) manufacturing and assembly activity peculiar to piano making activity peculiar to piano making

within the factory 40% of the direct within the factory 40% of the direct labour and 50% of the floor space labour and 50% of the floor space were allocated to furniture making were allocated to furniture making operation.operation.


Furniture making operation.Furniture making operation. after drying the furniture making operation after drying the furniture making operation

begins this include cutting piano case and begins this include cutting piano case and sounding board building the firm for grand sounding board building the firm for grand piano,and the fabrication of piano actions.piano,and the fabrication of piano actions.

Piano making operations.Piano making operations. Bellying –so called because workers both Bellying –so called because workers both

concentrated on the heart of the piano and concentrated on the heart of the piano and also perform many of this task while also perform many of this task while learning their stoamaches again the rim of learning their stoamaches again the rim of the piano was generally considered to the the piano was generally considered to the first of the piano making operation.first of the piano making operation.


Stringing was extremely tedious work, Stringing was extremely tedious work, involving the attachment of strings to pins involving the attachment of strings to pins and the hammering down of those pins, and and the hammering down of those pins, and operation requiring approximately 2hrs per operation requiring approximately 2hrs per piano.piano.

After stringing piano move to finishing stage After stringing piano move to finishing stage where grand and vertical piano were where grand and vertical piano were physically seperated for the first timephysically seperated for the first time

After the finishing stage –roughly akin to final After the finishing stage –roughly akin to final assembly the various component of the piano assembly the various component of the piano were assembled into working instruments were assembled into working instruments and then keyboard were fitted individually and then keyboard were fitted individually


Finally the instrument move to the Finally the instrument move to the polishing,tone regulating and polishing,tone regulating and rubbing department there woods rubbing department there woods were polished and signed and key were polished and signed and key were clean,and most important, were clean,and most important, pianos were voiced pianos were voiced

THE MODEL “K”`THE MODEL “K”` The original version of model K, 50inch The original version of model K, 50inch

vertical piano ,have been produced by vertical piano ,have been produced by Steinways in the U.S from 1903 until the Steinways in the U.S from 1903 until the late 1920s.late 1920s.

There were differences of opinion within There were differences of opinion within steinway about why the original line steinway about why the original line have been phased out,for it have been have been phased out,for it have been extremely popular and many extremely popular and many knowledgeable piano technicians knowledgeable piano technicians considered the model K the best vertical considered the model K the best vertical piano the firm had ever built. piano the firm had ever built.

THE MODEL “K”`THE MODEL “K”` Steinways interest in reintroducing a Steinways interest in reintroducing a

50inch vertical pianos was triggered by the 50inch vertical pianos was triggered by the action of others.action of others.

They begins to thinks seriously introducing They begins to thinks seriously introducing the 50 inch of upright of their own and the 50 inch of upright of their own and their thought turned immediately to the their thought turned immediately to the model K. but the thinks move slowly there model K. but the thinks move slowly there at steinways.the possibility of reintroducing at steinways.the possibility of reintroducing the model K was kicked around for 10 or 15 the model K was kicked around for 10 or 15 yrs with little real progress.yrs with little real progress.

THE MODEL “K”`THE MODEL “K”`

Occasional difficulties appear in working up Occasional difficulties appear in working up the new model K, for certain production the new model K, for certain production practices had changed since the model was practices had changed since the model was first produced.first produced.

Once the part specifications had been drawn Once the part specifications had been drawn up, a year was spent building prototypes. up, a year was spent building prototypes. Twelve prototypes were built in all. Twelve prototypes were built in all. Unancipated problems were ironed out at this Unancipated problems were ironed out at this time, and once the sixth or seventh time, and once the sixth or seventh prototypes had been completed, steinways prototypes had been completed, steinways engineers felt that few bugs remained.engineers felt that few bugs remained.


All protypes were constructed on the All protypes were constructed on the shop flooar,rather than in a separate shop flooar,rather than in a separate pattern shop.pattern shop.

At each of the piano making At each of the piano making operations the best worker had been operations the best worker had been singled out, and that stage of the singled out, and that stage of the model K’s production had been model K’s production had been assigned to him or her.assigned to him or her.


Annual production of 200 to 250 Annual production of 200 to 250 units was anticipated for the model units was anticipated for the model K. prices were expected to be K. prices were expected to be between $ 7000 and $ 7700 between $ 7000 and $ 7700 depending on the wood employee.depending on the wood employee.

Competing on the eight Competing on the eight dimensions of quality.dimensions of quality.

A survey in 1981 nearly 50% of A survey in 1981 nearly 50% of U.S.consumer believe that quality of U.S.consumer believe that quality of U.S product has dropped during the U.S product has dropped during the previous 5yrs.more recent survey have previous 5yrs.more recent survey have found that a quarters of consumers are found that a quarters of consumers are “not at all “ confident that U.S industry “not at all “ confident that U.S industry can be dependent on to deliver reliable can be dependent on to deliver reliable productsproducts

Eight dimension of Eight dimension of quality.quality.

1 PERFOMANCE.1 PERFOMANCE. 2 FEATURES.2 FEATURES. 3 RELIABILITY.3 RELIABILITY. 4 CONFORMANCE.4 CONFORMANCE. 5 DURABILITY5 DURABILITY 6 SERVICEABILITY6 SERVICEABILITY 7 AETHETICS.7 AETHETICS. 8 PERCEIVED QUALITY.8 PERCEIVED QUALITY.

PERFORMANCEPERFORMANCE

Performance refers to a products Performance refers to a products primary operating characteristics primary operating characteristics

For e.g performance of automobile For e.g performance of automobile includes traits like includes traits like acceleration,handling speed and acceleration,handling speed and comfortcomfort

Another e.gf performace of piano Another e.gf performace of piano includes clarity and pitch of soundincludes clarity and pitch of sound

FEATURESFEATURES It is a second dimension of quality that is It is a second dimension of quality that is

often a secondary aspect of performance.often a secondary aspect of performance. Features are the bells and whistles of Features are the bells and whistles of

product & services ,those characteristics product & services ,those characteristics that supplement their basic functions.that supplement their basic functions.

Example- free drinks on a Example- free drinks on a plane ,permanent press cycles on plane ,permanent press cycles on awashing machine.awashing machine.

A good quality of string to be used for a A good quality of string to be used for a goodgood

sound. sound.

RELIABILITYRELIABILITY

It reflects the probability of aproduct It reflects the probability of aproduct malfunctioning or failing within a malfunctioning or failing within a specified time period specified time period

The common measures of reliability is the The common measures of reliability is the duration between the first time of repair duration between the first time of repair required, the mean time between failures required, the mean time between failures and the failure rate per unit time.and the failure rate per unit time.

For eg. The maintenance required in For eg. The maintenance required in automobiles tells about the reliability of automobiles tells about the reliability of that vehicle.that vehicle.

CONFORMANCECONFORMANCE

IT is the degree to which a products IT is the degree to which a products design and operating characteristics design and operating characteristics meet established standards .meet established standards .

These specifications are normally These specifications are normally expressed as a target or expressed as a target or center ,deviance from the center is center ,deviance from the center is permitted within a specified range.permitted within a specified range.

DURABILITYDURABILITY

A measure of product life durability A measure of product life durability has both economic and technical has both economic and technical dimension .dimension .

Technical durability can be defined as Technical durability can be defined as the amount of use one gets from a the amount of use one gets from a product before it detoriates .product before it detoriates .

Economic dimension includes the Economic dimension includes the monetary feasibility of the product monetary feasibility of the product with respect to the buyers and sellers.with respect to the buyers and sellers.

SERVICEABILITYSERVICEABILITY

Serviceability includes the speed, Serviceability includes the speed, courtesy, competence and ease of courtesy, competence and ease of repair.repair.

Companies differ widely in their Companies differ widely in their approaches to complain handling and in approaches to complain handling and in the importance they attach this the importance they attach this elements of serviceability. Some do their elements of serviceability. Some do their best to solve the complain and other find best to solve the complain and other find excuses to avoid this kind of excuses to avoid this kind of serviceabilityserviceability

steinway & sons 1

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