To the horror of Bang & Olufsen’s shareholders, their shares plummeted yet again on Wednesday morning.
The rapid fall in value is due to Bang & Olufsen downgrading their expectations on Tuesday night, the fourth time within the space of a year.
As a result of the fall in prices, Bang & Olufsen has lost approximately 300 million Danish Kroner of its market value. The new market value is now placed at 1.4 billion Danish Kroner.
Bang & Olufsen therefore expects a decline in revenue in the 2019/20 financial year. A decline in revenue of between 13 and 18 percent, estimates the company.
The New Strategy
”The strategic direction is unchanged, but it is clear that there must be a fundamental change in sales and marketing efforts and a culture created where we are closer to customers and partners,” says CEO of Bang & Olufsen, Kristian Teär.
Teär further states that sales numbers from the partners selling Bang & Olufsen products to consumers have not been satisfactory.
The Actual Problem
The core of the problem for Bang & Olufsen according to Per Hansen, Investment Economist at Nordnet, is that the company's competitors have caught up with them.
Hansen believes that Bang & Olufsen no longer has the cutting-edge competencies that customers have been willing to pay extra for.
Hansen estimates that the company has two potential paths it can take.
Either Bang & Olufsen has to try to regain its place in the market independently and through a lot of hard work, or the company must rely on partnerships with other companies.
”At this point, I do not think that it is realistic that Bang & Olufsen can remain independent on their own.” Hansen said and added, “Bang & Olufsen must be part of something bigger.”
We believe that information should be free and will therefore never put up a paywall.
If you like reading our reports about the Scandinavian business scene and would like to donate towards the upkeep of the site, we would be very grateful. Click here to donate.
Startups | 🕐 04. Mar. 2020
Business | 🕐 13. Mar. 2020
Business | 🕐 18. Mar. 2020
Culture | 🕐 14. Mar. 2019
Tech | 🕐 02. Dec. 2019
Tech | 🕐 22. Nov. 2019
Startups | 🕐 25. Nov. 2019
Startups | 🕐 14. Nov. 2019
Startups | 🕐 21. Nov. 2019