Innovation inside Bose Corporation
Never lose your
imagination. Always
dream of things that are
better and think about
ways to reach those
things. Dr. Amar Bose
(Bose Ltd, 2016).
Bose Corporation was
founded in 1964 by Dr.
Amar G Bose and now
stands at having a total
revenue of $3.4 B with
over 11,000 employees
worldwide. His passion
for classical music and
engineering background
kick started his research
into developing a better
sounding stereo system
than current ones on the
market. This came after
he purchased one whilst
as a student and was
disappointed with its
sound performance and
its inability to recreate
the feel of a live
performance. Years later
Bose Corporation was
then formed, with the
first consumer product
being launched in 1966
called the 901
Direct/Reflecting
speaker system. Bose
now produces a range of
different speakers,
headphones, in caraudio and automotive
suspension systems all
positioned in the highend market.
They have 4 main
principles that provide
the foundations of their
decisions, which are:
Innovation and
technology
that delivers
demonstrable benefits
to customers.
Teamwork and
collaboration
that inspires our best
people to stay and
others to join.
Growth
to reach more customers
with the benefits of our
technology and to
provide opportunity for
our employees.
Financial viability
of the business so that
we can self-fund
research, innovation and
growth over the long
run.
(Bose Ltd, 2016)
Competition
In todays audio sector
Bose has managed to
Ben Kaluza | N0618664 | BAMKT5 | 1499
cement its position as
one of the leading
brands amongst
consumers. This is due
to the long lasting
history of the company,
the manufacturing
quality, consistency and
branding. Bose currently
dominates the market
alongside Harman
international but also
has ongoing competition
from companies like
Sony, Sonos and Philips.
Using Porters 5 forces
model (Porter, 1985) the
buying power can be
seen as high due to
many different options
available with different
brands offering similar
products. There are lots
of alternatives on the
market but Bose has a
strong brand identity.
Bose tends to price its
products towards the
upper end of the
spectrum based on their
high quality and luxury
brand positioning. The
fact that the suppliers
have low power due to
the abundance of
electrical suppliers
enables Bose to
negotiate and buy high
quality components at
reasonable prices. This
1
is due to Bose having a
big global supply chain
and having also
developed a detailed
supplier performance
system. This innovative
strategy means that if
a supplier is
consistently
underperforming they
will simply be replaced
with another so Bose
can remain consistent
with their
manufacturing (Segars,
2001).
beginning to rise up
and challenge Bose in
wireless audio sector.
Similar to Bose they
offer high quality
products with
appropriate pricing.
One way that Bose
manages to fight such
competition is by
having many stores
worldwide to further
promote and sell their
products.
The threat of new
entrants is relatively
low due to large capital
requirements and
economies of scale.
Furthermore the audio
industry requires
specific technical
knowledge in being
able to create a new
product from scratch
with innovation. Also
(Schumpeter, 1942)
believed that larger
firms with wellestablished brand
names have a critical
advantage when
creating innovation as
R&D is risky and costly
undertaking. However
one relatively new
entrant Sonos, which
was founded in 2002 is
Having stores
worldwide allows Bose
to not only concentrate
on the product but to
also provide an
experience to the
customer. When you
walk into a Bose shop
they provide excellent
customer service and
technical knowledge
that attracts customers
and gives consumers
confidence in the
brand. Also when you
are interested in
purchasing a sound
system you are taken
into a specialized room
that showcases the
potential the product
has. This is an
ingenious marketing
strategy by Bose. This
The experience
being because the
room the customer is
taken into would have
been designed to have
the best possible
acoustics. Meaning the
sound system is able to
perform to the best of
its ability and influence
the customers
decision to purchase.
Innovation
Innovation can be
defined as all the
scientific,
technological,
organizational,
financial, and
commercial activities
necessary to create,
implement, and market
new or improved
products or processes
(OECD, 1997). Dr Bose
was the entrepreneur
self-starter with an
abundance of creativity
which led to the
development of
innovative products.
Porter argues that,
while successful
businesses will each
employ their own
strategy, they achieve
competitive advantage
through acts of
innovation (Porter,
1985). This
entrepreneur mindset
has developed through
the growth of the Bose
enterprise and crosses
over into everything
they do. This is to keep
their competitive edge
and position in the
market place.
Maintaining a strong
commitment to
research is also a big
part of the companies
philosophy with its tag
line being Better
sound through
research in order to
keep influencing
peoples lives today.
One strategy that
Dr.Bose had when the
company was in its
early stages of
development was to
keep the company
private. This would
allow any money that
the company
generated to be
pumped back into
research. Therefore
enabling Bose to be
constantly creative and
innovative with their
products and rising
them to the top of the
audio market.
Speakers
In 1966 the first
consumer product the
2201 speaker was
launched, however it
proved unsuccessful
with poor sales.
Extensive research
then went into speaker
design and
psychoacoustics and
they learnt that the
next product needed to
be practical as well as
innovative. This then
lead to the
revolutionary 901
speaker, which
propelled Bose into
major commercial
success. After this,
Bose then continued to
develop and innovate
with speakers bringing
them to the top and
making them the most
respected name in
sound.
In todays current
market Bose
manufactures speakers
in different categories
such as wireless, home
cinema, stereo,
CD/radio, docking and
portable PA. One
market that has
emerged in recent
years has been the
wireless device market.
Bose being the
innovative company
they are took this
opportunity to lead the
way in producing high
quality wireless
speakers. Another
emerging market has
been due to the rise of
Apple in the last 10
years, which could be
considered as a
competitor to Bose.
However their music
playing devices have
lead companies like
Bose to respond to this
rise and produce
docking stations. Bose
now has the
SoundDock digital
music system, which
has become the sound
standard for iPods.
Headphones
In 1978 Dr. Bose
travelled on an
airplane of which he
was disappointed by
the way current
headphones were
distorted by the noise.
As represented by the
chain link model of
innovation (Kline, S.J,
1986) a new market
had arisen in Boses
eyes. He then got
down to research and
produced the first
prototype in 1986
which were tested
onboard a flight. More
research was then
completed and the
headphones went back
into redesign and the
first pair of noise
cancelling headphones
was released in 1989.
Bose now produces a
range of different inear and over-ear
headphones as well
tapping into the
wireless headphone
market as it has
emerged like the
wireless speaker
market. To promote
their headphones, Bose
just like many other
brands uses
sponsorship and
endorsements to push
their name out there.
In the last few years
Bose has seen itself
make deals with the
NFL and athletes like
Rory Mcilroy in order to
inspire customers to
buy Bose products.
Cooperate social
responsibility
Cooperate social
responsibility is
becoming increasingly
important in todays
society to create a
better public image, to
boost employee
engagement and to
create financial
stability.
In 2012 Bose launched
its energy efficient
series sound system.
This system is 30%
smaller, 40% lighter,
and uses 50% less
energy than
conventional Bose
sound systems, while
delivering premium,
high-quality audio
(Bose Ltd, 2016). The
research behind this
project looked at how
sound system
performance is
compromised by the
weight, power, and
space constraints of
todays more efficient,
environmentally
responsible vehicles.
This engineering
achievement maintains
Bose standards for
clarity, dynamic range
and accuracy, and
helps the Volt to
achieve up to 40 miles
of electric-only range
(Mitchell, 2009). Bose
has established
partnerships with car
manufacturers such as
Audi, Porsche, Nissan
and Mazda who are
providing a platform for
Bose to develop and
innovate in-car audio.
3 Ps (Fisk, 2010)
In recent years Bose
has achieved
developments in all 3
elements of their
sustainability
campaign:
People
In a new facility
in Malaysia Bose
built prayer
rooms, special
bathing rooms
and a cafeteria
that serves Halal
food for Muslim
employees.
Hosts events
about wellbeing
at its facilities in
Belgium, USA
and many
international
locations.
Planet
Using less plastic
and fully
compostable
materials in the
packing of the
Soundlink2 has
increased
recyclability by
85%.
Before Bose
would discard
products
returned but now
they recycle
them or resell
them at lower
prices.
Profit
Having no
stakeholders or
external funding
means financial
viability is key so
if Bose cant fund
it then they
wont do it.
(Hu, 2013)
For more information
on Bose products visit
their website or find
them on any of the
social media platforms
such as Facebook,
Twitter and Instagram.
References
Bose Ltd. (2016) History of Bose. Available at: https://www.bose.co.uk/GB/en/aboutbose/A-history-of-Bose/ (Accessed: 14 April 2016).
Bose Ltd. (2016) Our values. Available at: https://www.bose.co.uk/GB/en/aboutbose/our-values/ (Accessed: 14 April 2016).
Hu, S. (2013) Bose V.P. Stresses sustainability. Available at:
http://www.sustainablecampus.cornell.edu/blogs/news/posts/bose-v-p-stressessustainability (Accessed: 4 April 2016).
Kline, S.J. and Rosenberg, N., (1986). An overview of innovation. The positive sum
strategy: Harnessing technology for economic growth,
Mitchell, B. (2009) Bose SoundTouch 10 wireless speaker. Available at:
http://www.ecoustics.com/products/bose-energy-efficient-series-sound/ (Accessed: 04
April 2016).
Organisation for Economic Co-operation and Development [OECD]. (1997). The
Measurement of Scientific and Technological Activities, Proposed Guidelines for
Collecting and Interpreting Technological Innovation Data (Oslo Manual).
Peter Fisk, (2010). People Planet Profit: How to Embrace Sustainability for Innovation
and Business Growth. 1 Edition. Kogan Page.
Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior
Performance. USA: Free Press.
Segars, A.H.Harkness, W.J. and Kettinger, W. (2001), Process management and supplychain integration at the Bose corporation, Interfaces, Vol. 31 No. 3, pp. 102-114.
Schumpeter, J. A. (1942). Capitalism, Socialism and Democracy. New York: Harper and
Row.
Appendix: SimVenture
Returning to the aims of the seminars, below write some comments in
relation to how you feel SimVenture has contributed to each specific aim.
I have gained experience on different types of business decisions on SimVenture by it
allowing me to make decisions on target segmentation, product design and selling
points. After experimenting with variations of all of them it is apparent that they are
all factors that can heavily influence profit when running the simulation. A change in
the product design would be related to longer term strategic goals to maximize profit
and sales. Four factors that could be changed to affect the design included quality,
performance, features and style. Short term tactical decisions that are made could
be related around the selling points of the product to showcase the new features.
SimVenture has developed my ability to make informed decisions allowing me to
simulate market research and then competition research. This then put me in a
position where I was able to analyze the data and make an informed decision and
choose my target segmentation. This ended up being cooperations with the rational
behind this decision being their order frequency and the amount they order. Also
when making changes to the design of the product, customer research, the target
market and major competitor all had to be considered. The design specification was
evaluated for each which then allowed me to make an informed decision about what
was more important when adjusting the design parameters. This would hopefully
then mean the profit and sales would be maximized as mentioned previously when
considering the long term goals.
After creating the control and running the business for 12 months SimVenture helped
me evaluate different aspects to determine the health of the business. The
companies bank balance after 12 months was -255. After having a successful first 6
months the company then started to decline in profits with fewer sales and too much
time spent idle. This was indicated by the profit graph in the performance report.
This would indicate that changes needed to be made to the business to make it more
successful.
The biggest decision that was made using SimVenture was the change of the product
design. This being because the affects that this would have on the business would
prove the most drastic as it influences who the product appeals to. Having said this it
would all depend on how much the design is changed. If the quality improves only
slightly and therefore the price goes up a small percentage then this may only be
In what specific ways do you feel that your experience of using SimVenture
has contributed to a better understanding of the qualities and
characteristics of being an Entrepreneur?
SimVenture has taught me that as an entrepreneur you need to have many qualities
to start, maintain and grow a business. Making the right decisions at the right time is
an absolute essential quality and knowing when to take a risk is also key. Adjusting
the product design many times has taught me this as pricing the product too high
could mean you just miss out on the target market. Pricing the product too low could
mean not enough profit is made on the target market. Pricing the product too low
could mean not enough profit is made on each computer and the business is not
sustainable. Being able to analyze data and feedback is also key as this is what
provides the foundation when an entrepreneur sticks with decisions or makes
changes.
SimVenture has also brought to my attention the amount of different functions there
are to a business and how an entrepreneur needs to be well informed about all of
