STEINWAYS STRATEGIC ORIENTATION

Dwiyani Rahmawati Marvin Mahadharma Aldira G. Meyer Tenny Oktarina

Company Overview
The finest piano maker in the world
1853 founded by the Steinway family 1995 bought by Messina & Kirkland 1996 become public company Piano is division of Steinway Musical Instruments Company

Products

Upright piano

Grand Piano

Market share over 80%

Brand as most valuable assets

2% of all keyboard unit sales in US profit 35%

Minto Pyramid Analysis

UDR
Financial performance below industry averages Craftspeople are coverted by competitor & set up own store

IDR

?
HOW

Increasing sales Keeping craftspeople

DIAGNOSING: - external environment - industry structure - technology used - measurement system - HR system

CREATE STRATEGY

Model for Diagnosing Systems at Organizational Level

Inputs Design Components Outputs

Technology
General Environmen t
Organization Effectiveness

Strategy

Structure

Industry Structure

HR Systems

Measurement Systems

Does strategic orientation fit with Inputs? Strategy Environment Fitness

Do components align with each other? Components Alignment

External Environment Analysis

Steinways external environment is only moderately uncertain and not very complex.
Political Legal Different regulations and requirement in each country of manufacturing & sales distribution Economic downturn in 2002, overall industry sales should also drop Closely monitoring countries political condition Need to exercise caution in overall activities Should be sensitive to the latest trend

Economic

Social

Trends in music and display are constantly changing

Breakthrough in design, materials, and construction technology Current product requirement is considered wasteful by enviromentalist

Technological Environmental

Choose to use classics method of production process

Industry Structure
Steinways industry is moderately competitive. Threat of entry Threat of subtitute Threat of supplier Threat of buyer

New entrants will have difficulties to enter the market since existing brands have strong brands and dealer networks.
Electronic keyboards cannot substitute entire elements of the grand piano Craftpeople and best raw materials are rare in market high bargaining power Small number of buyers albeit willing to pay more for best quality International competitors aiming for highend customers using similar marketing and manufacturing tactics to Steinways

Degree of Rivalry

Steinways Organization Components

CULTURE
STRATEGY TECHNOLOGY
ORG. MEASUREMENT HR SYSTEM STRUCTURE SYSTEM

SOPHISTICATED NICHE & DIFFERENTIATION

INTERDEPENDENT TECHNOLOGY

FUNCTIONAL STRUCTURE FOR PIANO SUBSIDIARY

FORMAL MEASUREMENT SYSTEM

DEVELOPED HR SYSTEM: Rewards, union relationship, retention program

Quality Responsi veness

ALIGNMENT