Innovation of Bang & Olufsen

Design Driven Innovation – Bang & Olufsenan HBS case, powerpoint by Wesley Shu, Ph.D.

Bang & Olufsen

You can watch a B&O TV for hours – and then you turn it on.

The product itself is ‘experience’ – Wesley Shu

Issue

• Impact of iPod: extend into virtual space, not only physical form or function

• Extend to virtual space, where great design meant great software and network-based interaction with other products and services

Issue

• This differed from B&O’s traditional expertise

• The company formed Idealab• “supplementary innovation” – a way

of injecting new ideas into products from outside the traditional process

• Move away from designers’ near absolute control over products

• But how to decide the ‘right’ amount of change?

Survived from Asian competition 1960s• By allying with a group of

architects & designers

• By focusing on ideas and design behind its products

• Emphasizing high quality

Design Style

• Influenced by Bauhaus and Scandinavian preference for clean lines

Bauhaus

Scandinavian clean-line

Scandinavian clean-line

2001 strategy to overcome difficulties• Car stereo systems

• Mobile phone

• Hotel

• Luxury yachts

Vision (mission?) Statement

• Courage to constantly question the ordinary in search of surprising, long lasting experiences

• For Bang & Olufsen, design is far more than mere styling of existing products; rather it is the expression of an idea, the concept made conscious

Business M

odel

Self Position

• “We see competition more in the recreational car or home, high-end furniture or luxury travel… We relate more to a BMW than to the generic product ranges of electronics giants.”

• Very hard to imitate – technology and material to support the unique design (cf. Philip, Fisher)

Business M

odel

Customer

• Vital core customers

• 80% revenue came from 800 to 1,000 customers in the U.S.

• Customer relations are important – CRM.

• Not only design, but the way the product works

Business M

odel

Designer – never in-house!• Away from the influence of

its daily business

• Not need to understand their industrial limitations, e.g., manufacturability

Making B

an & O

lufsen P

roducts

Designer – never in-house!

“Designers have to be free to look in an unconditioned way at what’s happening in our society, how people live and furnish their homes…”

Making B

an & O

lufsen P

roducts

Who Are the Designer

• A senior designer – British

• 3 external designers

• Competitions

• Good designers have strong personality

Making B

an & O

lufsen P

roducts

Design Competition

“When flat screen TVs started to take off, B&O launched a competition among nine designers from different parts of the world for ideas on what the B&O flat screen concept should be.”

Making B

ang & O

lufsen P

roducts

Designer

• Then, B&O attracts more talented designers.

Making B

an & O

lufsen P

roducts

Process

• No standard process for product design and development

• Culturally evolved collaboration between designers, concept developers, engineers, and technicians

Making B

an & O

lufsen P

roducts

Process

• Close physical proximity to production departments

• Thesis by designers – antithesis by engineers – synthesis : one or two years

Making B

an & O

lufsen P

roducts

Concept Developers

• Bridge art towards the repetitive processes of an efficient industrialized manufacturing process

• Constantly question the ordinary

• Give hard time to manufacturing guys

Making B

an & O

lufsen P

roducts

Coming up with new ideas• From designers

• From engineers – new technology inspiring designers

• From perceived needs to fill out the product portfolio

Making B

an & O

lufsen P

roducts

Ideas from designers

• See how customers live, not ask what they want.

• Customers only know what’s already hot in the market.

• Go beyond customer expectation

Making B

an & O

lufsen P

roducts

Design – Prototyping

• Idea iterates until it has ‘substance’ – unique personality

Product D

evelopment Life

Cycle

Prototypes – product commitment• Decision was made with the heart,

not financial or technical considerations

Product D

evelopment Life

Cycle

Product commitment – development• A dedicated project team formed

• Designers remained involved

• Concepts or development process may change if a convincing new idea comes up.

Product D

evelopment Life

Cycle

Some Products

• BeoSound 9000– originally unmanufacturable– Took 5 years from the decision point

to manufacturing

• BeoLab 8000– Originally a crazy idea

• BeoCom 2– New technology & material to support

design, e.g., hydroforming used by Porsche

Product D

evelopment Life

Cycle

Conclusion

“If you wanted to express power and determination as a manager here, it would be difficult, but if you allow a certain degree of freedom you get a very creative environment.”

Product D

evelopment Life

Cycle

IdeaLab – B&O’s effort to digital world• Goal: untapped or uncontested

markets, network economy, media convergence (is iPod one?)

• The most challenging part is how to integrate into existing business environment

IdeaLab

Effort to integrate

• Find the way to communicate• Follow existing way of communication• Collocate chief graphic designer with

concept developers at IdeaLand• Demo facility without pushing designers

to visit• Supplementary functionality for existing

products• Patience! Usually took longer than

anticipate

IdeaLab

Some B&O Products

Some B&O ProductsBeoLab 5 Loudspeakers

Some B&O Products

Some B&O ProductsBeoVision 7 and BeoLab 8000

Som

e B

&O

Pro

ducts

Some B&O ProductsBeoLab 3

Some B&O ProductsB

eoCom

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