Bang and Olufsen Outsourced

568 replies
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Rmclachlan and TodDaniel – Completely agree with both of you. I always saw B&O as a non-mass market and low volume product. For me it was between professional and consumer. A category called Prosumer (for example some high end DSLRs like the D60 are Prosumer).

 

Folkdeejay – The beolab 6000/8000 and Beosound 1 are fairly new products compared to the ones I mentioned. People were comparing 80s/90s prices for LX/MX TVs and new Plasma and LED tvs so I compared 90s Ouverture to a Beosound 3200 as an example that price hadn't gone up that much especially compared to inflation for that particular design in a 10 year period. 

 

Exactly because the issues you talk about our out of B&Os control is the reason they should not outsource to China. It is essentially giving up control over their workforce. I am not an affluent 27 year old, I have been unemployed for over a year (hopefully to change soon) and have only bought used B&O products in the past, mostly 90/00s ones that I adore so much (with the exception of the Beosound 2  with earphones which I bought new for $500 in 2006 which I thought was an amazing deal at B&O in San Francisco). If I had the money I would buy new B&O products which I like but with the way it's currently going it won't be cool anymore to say that you own B&O as everyone will have something of theirs and it will get annoying for me personally.

 

I agree that most buyers are not like me, especially in places like America where you have a throwaway culture and everyone is fairly cheap. I'm sure the Play products will be a success and that the share prices will keep rising. This is only good for shareholders, not for the employees in China, and not for consumers who have to buy the products that are made there. I'm not a big fan of companies going public myself, it seems that so many do in order to raise capital and once they have done that they outsource even more to raise more because eventually it will get stagnant. Higher profit and more people buying = more popularity = higher share prices through people buying more shares, etc... It doesn't even matter what a company makes these days as long as the share prices go up and the boardmembers, execs and shareholders make money out of it. It's sad to think that companies that don't have shareprices sky rocketing are considered as doing badly in this world. A company even B&O was making a profit as it was paying everyone (including the execs who got millions) profit! They will never give up their millions and are forced to satisfy their shareholders and boardmembers more than anyone else unfortunately.

 

Puncher – There are craftsman in China as there are in Denmark and every other country in the world, however the attention to detail paid to certain items in certain countries is higher. Denmark has been known for decades as a cornerstone for audio equipment design, engineering and manufacture, hence why so many high quality audio companies are located there. China does not have this history, nor the apprenticeship schemes. If a group of Chinese craftsman would come to Struer, get trained under the workers there for a year or two, then go back to China under a factory owned and operated by B&O and under their supervision with the same tools and same quality of materials also manufactured in Struer, then it will perhaps be possible to make it close to the same quality but for 1/5 of the cost or less. However, nobody is willing to do this. As many have commented on the forum China is good at mass manufacturing, not hand assembly and low production that is needed for the quality and attention to detail of professional and higher end goods!

 

 

Burantek – A developed country is a country where the majority of the population don't live below the poverty line as in China. Where as in China the human development index is not nearly as low as it is. Just because a few engineers in China, probably thanks to the Soviet Unions help, had managed to develop a space program in China thanks to government funding, does not mean the country is not developing. One thing has NOTHING to do with the other. Most people in China still live in absolute poverty, that is exactly why they are willing to work for miniscule wages in slave like conditions. A developing country is one where there are practically no labour unions or laws, where the country is FAR from joining the OECD (Organisation for Economic Co-operation and Development). A developing country is one where the life expectancy rate is extremely low. There are many many many things that define a developing country and China meets nearly all of the criteria!

 

Nickyg63 – As far as I have read all Bentleys are handbuilt in Crewe, England. The VW engines might be made in Germany but the car itself is not. I may be wrong about this and if I am, I can say that German labour cost is above those of England so unless the process has become more mechanized I don't see how they are saving money on this move. Either way Germany is world renowned in manufacturing quality and not exactly outsourcing to China, and since VW owns Bentley, it would mean they are making the car in their own factory and not outsourcing at all.

 

Lotus Cars has always been in financial trouble but Lotus makes most of its money in consulting work. There is a statistic that states that 85% of cars on the road today use something that Lotus developed. Yes they use components from other cars but that is how they keep the car from costing $150,000 and costing only $50,000... However, they don't need to outsource production of the car to do so. I have yet to see a western car made in China for the western market...

 

Symmes – One cannot compare China's development to that of Japan's. Yes Japan did make bad quality products a little after the war but their economy was not built up on outsourcing and most companies did not make their products in Japan. In fact Japan was built up due to their own companies such as Sony, Panasonic, Denon, Nikon, Canon, Mamiya, etc... They created the fastest railway in the world, some of the most advanced robots and computers, they became internationally competitive by the 1970s and by the 1980s were producing some of the best camera's and some of the most innovative inventions. This is NOT the case with China's manufacturing where over 90% of their exports are actually designed and engineered by western companies and marketed as western products. China's way of development is not sustainable and only goes to widen the separation between rich and poor. Japan has perhaps the most middle class society with some of the best build quality in the world today and have had for the past few decades, China is the complete opposite.

Jonathan wrote:
Question for you: if there was a Chinese chef who was the best chef in the world, could produce every dish on your menu perfectly every time, could have every plate ready on time, and could do it at half the cost price you're paying now; would you hire him?

If his personality fit mine, he spoke English so I could talk to him, if I could pay him directly, if he had normal living conditions, and if I had complete control and interaction then I would still have to think about it. Unfortunately this is far from the situation with outsourcing in which people live in slave like conditions, you don't own the factory so you have no control or interaction with the workers or their wages or living conditions. You pay as little as 1/50 the cost of labour not half... If he could cook in "my kitchen" (aka my own factory) with the best equipment (high attention to detail) and organic locally grown ingredients (the best materials possible from local suppliers) I might agree but I would probably pay twice the amount to support local chefs in my area who could do the same as him but I would be supporting my local community by employing local staff as an employer to fulfill my corporate social responsiblity. Hey if I can afford to have a chef (or B&O equipment) then I won't be frugal about ths :-)

Dkatz wrote:

Jonathan wrote:
Question for you: if there was a Chinese chef who was the best chef in the world, could produce every dish on your menu perfectly every time, could have every plate ready on time, and could do it at half the cost price you're paying now; would you hire him?

If his personality fit mine, he spoke English so I could talk to him, if I could pay him directly, if he had normal living conditions, and if I had complete control and interaction then I would still have to think about it. Unfortunately this is far from the situation with outsourcing in which people live in slave like conditions, you don't own the factory so you have no control or interaction with the workers or their wages or living conditions. You pay as little as 1/50 the cost of labour not half... If he could cook in "my kitchen" (aka my own factory) with the best equipment (high attention to detail) and organic locally grown ingredients (the best materials possible from local suppliers) I might agree but I would probably pay twice the amount to support local chefs in my area who could do the same as him but I would be supporting my local community by employing local staff as an employer to fulfill my corporate social responsiblity. Hey if I can afford to have a chef (or B&O equipment) then I won't be frugal about ths :-)

Dkatz,

The Q was not posed to you...

Your raBidness of response and direct contradiction of so many of the tenents you have already expounded upon makes me question once again your original MO and point of contention in the first place!

Please... In one single, succinct statement -could you please state your definitive beef with B&o, outsourced...  the title of your thread?

burantek wrote:

Dkatz,

The Q was not posed to you...

Your raBidness of response and direct contradiction of so many of the tenents you have already expounded upon makes me question once again your original MO and point of contention in the first place!

Please... In one single, succinct statement -could you please state your definitive beef with B&o, outsourced...  the title of your thread?

My Rabidness of reponse is due to my passion with and hate of outsourcing to developing countries in general. All of the discussions we have been having have been about outsourcing and the pluses and minuses of this act that B&O has now started doing as well. Most of the discussions have been exactly about my beef with B&O outsourcing or any company for that matter.

 

My beef with B&O outsourcing is many reasons which I stated before such as: working conditions for employees, loss of control over the factory, mass consumerism of the brand and lowering the brands image, lowering of quality standards in those outsourced products, commercialisation that causes me to lose a lot what I believed in the brand such as quality and handbuilt in denmark, there are dozens of reasons why I am against it and I have mentioned them in nearly all my posts! The previous Q I thought was adressed to everyone, sorry if I was wrong but I really wanted to answer it.

Dkatz wrote:

burantek wrote:

Dkatz,

The Q was not posed to you...

Your raBidness of response and direct contradiction of so many of the tenents you have already expounded upon makes me question once again your original MO and point of contention in the first place!

Please... In one single, succinct statement -could you please state your definitive beef with B&o, outsourced...  the title of your thread?

My Rabidness of reponse is due to my passion with and hate of outsourcing to developing countries in general. All of the discussions we have been having have been about outsourcing and the pluses and minuses of this act that B&O has now started doing as well. Most of the discussions have been exactly about my beef with B&O outsourcing or any company for that matter.

 

My beef with B&O outsourcing is many reasons which I stated before such as: working conditions for employees, loss of control over the factory, mass consumerism of the brand and lowering the brands image, lowering of quality standards in those outsourced products, commercialisation that causes me to lose a lot what I believed in the brand such as quality and handbuilt in denmark, there are dozens of reasons why I am against it and I have mentioned them in nearly all my posts! The previous Q I thought was adressed to everyone, sorry if I was wrong but I really wanted to answer it.

Fair enough... and as succinct as could be hoped for!

You have mentioned many points regarding your disdain for outsourcing, however, you did not mention your original (the point of this thread) beef as defined HERE.

Outsourcing, from anywhere to anywhere is an immensely considered undertaking... have you now changed your opinion that it is solely "to fill their pockets?"

Have you ever been directly involved in a GO/NO GO corporate decision regarding outsourcing?

burantek wrote:

Outsourcing, from anywhere to anywhere is an immensely considered undertaking... have you now changed your opinion that it is solely "to fill their pockets?"

Have you ever been directly involved in a GO/NO GO corporate decision regarding outsourcing?

There is more than one reason for outsourcing, filling the pockets of the CEO, boardmembers/execs, and satisfying only the shareholders in the process is the main reason for outsourcing as it's mostly about cheaper labour costs. There are other reasons for example finding the amount of workers that apple needs (200,000) working 12 hours a day six days a week living in dorms, etc... That would not fly in developed countries that is another major consideration.

Besides all the reasons I mentioned to you in this post and above, I also have another reason in that for me I feel ripped off if I am being charged $1000 for a BS8 or $800 for a Beolit 12 which are both made in China. For that price I can buy a good pair of speakers that are made in a developed country and will give me much better sound quality. It costs them almost nothing to make it yet they charge so much, in my opinion mearly for a label. B&O for me was always about made in Denmark craftsmanship, not cheap consumer mass production and therefore with this they've stained their reputation or brand name whatever you want to call it. They charged a "premium" price for a cheap product (both to produce and the way it feels and looks) when they could have charged a cheaper price for one but then they knew it would have stained their reputation even more, hence why I think they shouldn't have done it in the first place.

No, I have not been directly involved in a Go/No Go corporate decision regarding outsourcing. If I was you know what I would choose, I would find other ways of making money through consultancy, etc... or market my brand in an even higher image, not release cheap little products that devalue the brand in my opinion.

Dkatz wrote:
There is more than one reason for outsourcing, filling the pockets of the CEO, boardmembers/execs, and satisfying only the shareholders in the process is the main reason for outsourcing as it's mostly about cheaper labour costs.

How about staying alive and remaining a viable concern rather than ceasing to trade, as a reason!

There is a (very) limited future in selling £15K+ TV's for a living.

Jonathan wrote:

bayerische wrote:

moxxey wrote:

bayerische wrote:

Puncher wrote:

My conclusion would be that consumer electronics prices and house prices are not related.

 

Amen!

Can't this thread grind to a halt? It's a discussion going no-where. We have people saying the Chinese can't produce quality, but who the hell cares? The proof is in the pudding and the pudding is damned good - the Chinese BS8 and Beolit 12 are great.

Miele may produce their washing machines in Germany, but I can also tell you that Miele purchasers I know say that recent Miele products are not a patch on old Miele products, which were built like tanks. Even Miele are finding ways to cut costs, like all manufacturers.

I've never seen a discussion before, at such length, where the argument is over successful products. How on earth can any create an argument around this?

People here are putting out daft arguments about quality of manufacturing.....as if the BS8/Beolit 12 were failures and the reason was due to the manufacturing! Weird, just weird.

Moxxey,

 

For me personally it's not about that the Chinese couldn't produce quality products.

I know they can. A good example is the Chinese hifi. Allthough it might not always be so easy to convince the press that this is the case.

 

What I don't like with the outsourcing going on right now at B&O is...

Mark my words.

Next will be the high-end stuff as the Beolab 5's, Beovision XX etc.

I can assure you that the prices of these products will follow inflation or a bit more. They will not become cheaper from being "made in China".

Sure one can always defend this practise with "capitalism at work". But I don't buy that. In this case it might be a desperate move to "produce". Numbers is what needs to be produced. This is seen with too many companies. Shareholders need to be overly satisfied. Bonuses need to be given left and right. And to give these bonuses margin and big payouts need to be made to the shareholders. Keep them happy, and they applaude another bonus for the execs.

Writing this I realize I'm portraying myself almost as red colored politically. 

Nothing could be further from the truth. I'm a business owner myself. But I take great pride in firstly being Finnish, and owning a Finnish company, albeit a small one. We use Finnish products as far as possible. I employ a Finnish staff. I like to think I make my own small contribution to society.

I like to think I drive my company with pride and quality, not greed. 

 

Surely money is in the masses, in more ways than one. But I can't help to think a product as the BL5 couldn't be economically made in Denmark at close to 20K euros a pair. 

 

Something that would be interesting to see is that are the higher end products of B&O selling stronger or weaker year by year? I suspect weaker, as we see this move to B&O play products. Could price play a role here?

I know I've said this before, and I'm going to say it again.

The prices of the TV's...

They are ridiculous. I like my BV10, but it's not worth the price. 

 

If one of your strongest marketing ideas is the masterlink, and the interconnection with your products and ultimately the idea of having your whole home filled with one brand, why on earth is it so lacking?

 

On the positive note, we who own the fabulous BL5's, made in Denmark edition, maybe they will become collectable, as a Comex sub...? 😂😂😂

 

 

Question for you: if there was a Chinese chef who was the best chef in the world, could produce every dish on your menu perfectly every time, could have every plate ready on time, and could do it at half the cost price you're paying now; would you hire him?

What if he was Finnish?

 

Puncher wrote:

Dkatz wrote:
There is more than one reason for outsourcing, filling the pockets of the CEO, boardmembers/execs, and satisfying only the shareholders in the process is the main reason for outsourcing as it's mostly about cheaper labour costs.

How about staying alive and remaining a viable concern rather than ceasing to trade, as a reason!

There is a (very) limited future in selling £15K+ TV's for a living.

Exactly!

 

Yet, why do B&O continue to do this?

Looking at the contents of this 15K TV, it's impossible that it would be a justified price. Could there be an equation about selling less charging more?

If would be interesting to see how many top of the line Avants or MX-series TV's B&O used to sell before tha age of the 15K plasmas and LCD?

Let's say, completetly hypotetically;

MX7000 could have netted a profit of 500 euros per sold TV to B&O...

Beovision 7 could net 3000 euros to B&O.

That would mean you can still make the same profits by only selling 1 TV instead of 6 TV's.

 

As I said, this was completely hypotetical. However, There used to be a lot of B&O's in peoples homes. New stuff, not the old "junk".

 

Stereo's, TV's, speakers. Often a complete masterlink set. The people I remember having these sets don't have them anymore. They didn't upgrade to the new stuff.  Their financial position hasn't changed, or maybe it has, but then definitely to the better, as the mortgage is paid, children self supportive etc etc.

 

Besides the forum members I don't have a single friend or person I know having B&O. This wasn't the case in the 80-ties or 90-ties. 

As TV's are still under "development", and surely HD or 3D isn't the last thing we'll see for another 20 years, as Puncher said, who would invest that amount in a TV? 

A car is starting to look like a great investment in comparison. 😁

Dkatz - Besides all the reasons I mentioned to you in this post and above, I also have another reason in that for me I feel ripped off if I am being charged $1000 for a BS8 or $800 for a Beolit 12 which are both made in China. For that price I can buy a good pair of speakers that are made in a developed country and will give me much better sound quality. It costs them almost nothing to make it yet they charge so much, in my opinion mearly for a label. 

 

I totally agree!  My ears don't lie. I can tell within a few seconds whether a sound system is good or not. The BS8 as I said sounds absolutely rubbish to my ears and the fact that £299 micro systems sound so better better in every way.  BS8 - Horrible, cheaply made little rip off.

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