MGT3334 Broadwoods v Steinways PDF

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MGT3334 Strategic Management The External Environment 2020-21

Broadwoods and Steinways: Canoes versus Ironclads ©Angwin, Cummings and Smith, Chichester, England: Wiley

In 1843, Broadwoods, England, was the greatest instrument manufacturer in the world. Admired for its association with great composers, such as Ludwig van Beethoven, it had a highly skilled workforce and a reputation for producing the finest of pianos. But by 2000 Broadwoods was just a shell of a company, outsourcing all piano production to Asia and licensing piano tuner for instrument maintenance. What had gone wrong for this world-class firm? In 1851 there was a census which showed that Broadwoods was one of just 12 factories in London, employing over 300 people. The craftsmen fashioned and adjusted by hand all 3,800 pieces that went into making a Broadwoods piano. The instrument consisted of a wooden frame strengthened by sophisticated wooden braces and some metal tension bars. This allowed the piano frame to take up to 16 tons of force from its strings, of which there was one per note. The firm produced around 2,500 pianos a year, which was 15% of England’s total piano production. Broadwood’s’ own output was 2.5 times greater than its nearest rival. 1852 also saw the Great Exhibition being held at Crystal Palace, London, where manufacturers from all over the world displayed their finest wares and competitions were held to judge which were superior. England exhibited 66 pianos, France, with producers such as Pleyel, showed 45 pianos, and Germany displayed 26 pianos. The English efforts were rewarded with 12 medals, the French with nine, and the Germans with eight. Unfortunately, the records documenting the number of gold medals are missing but, in numeric terms, the English pianos appear dominant. At this time, two German brothers, Steinway, were attempting to introduce radical ideas on piano manufacture into Germany. However, the highly conservative and restrictive German guild system made it impossible for them to operate. They therefore decided to leave for America where they discovered a more sympathetic context and two innovations that were to revolutionise piano manufacture. To plow up vast areas of newly discovered land for agricultural purposes, the Americans had become highly skilled in casting plowshares from iron. In addition, to remove the local Indian inhabitants, and to survive in the Wild West, it was necessary to develop a sophisticated handgun, the key feature of which, from the Steinways’ perspective, was a highly reliable, accurate, and sensitive trigger mechanism. The Steinways adopted both of these innovations in the manufacture of their pianos. The cast iron technology allowed them to manufacture cast frames, and the handgun trigger arrangements allowed them to produce a 1

highly sensitive and accurate key and hammer mechanism – a good example of a weapon being turned into an art product! The advantage of the Steinways’ “American system,” as it became called, was that the cast iron frame could tolerate up to 30 tons of force from its strings. This allowed the use of much heavier strings, which would generate a far more powerful and richer tone a well as more compact pianos, which until this time had really been grand pianos on their side. The new hammer mechanism gave greater sensitivity to the pianist and its precise vertical movement greatly reduced clatter of key mechanisms associated with pianos of that era. Overall these innovations also allowed cost savings of some 30%. The next big piano exhibition was again in London in 1862. Although the jury was accustomed to preSteinway sounds, two gold medals were awarded to Steinway pianos, one gold medal to a copy of a Steinway, and one to a Broadwoods as a souvenir des travaux passes [roughly: souvenir of past works]. Nevertheless, the leading industry paper at the time, the London Musical Standard, wrote: “We [meaning the English piano industry] have no reason to dread competition in the manufacture of musical instruments.” In 1873 the tables were completely turned on the English at the next big exhibition, which was staged in Vienna. England exhibited 12 instruments, France 34 and German 129. The Steinways American system was now adopted by all successful European firms and its dominance was epitomised in an advertisement at the time “as a MODERN IRONCLAD WARSHIP to a CANOE.” In 1878 at another exhibition there was a modest square piano, which was barely noticed. It came from Japan and its makers were Yamaha. A reasonable indicator of Broadwoods’ performance in overseas markets can be seen in Australian import figures for English pianos from 1862 to 1902, among which Broadwoods was the most prominent manufacturer. In 1862, Australia imported 100 pianos from England and just five from Germany. By 1886, imports from each country were running at similar levels of 230 per year. However, by 1902 over 500 pianos were being imported from Germany alone, compared to just 35 from England. At this time, the managers of Broadwoods were described as “sleepers” not “thrusters,” and “gentlemen” rather than “players.” When one director died in 1881, he left a huge fortune of £424,000 and his obituary declared: “He took no share in the active portion of the business but was, however, an enthusiastic yachtsman.” A new member, appointed in 1890, was educated at Cambridge University and Eton College. He was a keen farmer, oarsman, and swimmer – “few could equal him at plunging.” He travelled extensively, “shot his tiger,” but apparently visited no piano factories.

Write notes on the external environment factors you picked out in the case 2

When looking at the external environment factors I can understand that the social context is that the Steinways found American society to be far more understanding of their ideas than the German craft system. Another factor which was picked out was the political and economic as there was decline of the empire at the turn of the century might be seen as the influential factor in the decline in Broadwoods export sales. Moreover, changes in technology in the agriculture and military industries began to be adopted in the piano industry radically changing the way in which the piano was constructed. It was possible to produce pianos with enhanced abilities at lower cost.

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