1. Douglas Hentges Austin Mapes David Murdock Cindal Peterson Molly Redden

2.  Plated an important role in society Without the electric guitar society may be very different  Birth of Rock and Roll  The music we know today would be very different if were not for companies like Fender  Music Innovation  The Introduction of the guitar allowed music to have a new front man of sound

3.  negative profit growth with the recent flux of the economy.  Barriers to entry of any market are always an issue  Intensity of competition between firms is high  The degree of product substitutability  The technological sophistication in the musical creation industry is moderately high.  Management capability in this industry is very low

5.  Harman International  Yamaha Corporation  Gibson

6.  Harman-Kardon Founded in 1953 by Sidney Harman and Bernard Kardon  Harman manufactures and sells high-end audio products and electronic systems for the home and automobiles  During the mid 1970s the company was the leader in the U.S. stereo industry

7.  In the early 80s more than half of Harman was sold to a Japanese company  The company began to fail, so Sidney Harman and other investors gathered $55 million to repurchase the company  This purchase created Harman International Industries  In 1986 the company went public on the NYSE

8.  Through restructuring management and new acquisitions, Harman International regained its status as a top competitor in the industry  3 main strategies: Manufacture all products in company-owned facilities Market products globally Honor and treat all employees with complete respect

9.  1983 – UREI and Infinity  1988 – Soundcraft  1990 – DOD Electronics Corp  1995 – Becker GmbH and established Harman China In the 1990s and 2000s established many associations with vehicle manufacturers. They also have associations with Apple, Dell, Compaq and IBM for computer audio equipment.

10.  Current CEO Dinesh Paliwal  Headquarters moved from Washington, D.C. to Stamford, CT  New engineering center in Bangalore, India  2009 net sales totaled $2.9 billion

11.  Yamaha Organ Manufacturing Company founded in 1889 by Toraksu Yamaha  8 years later YOMC became Nippon Gakki  In 1902, Nippon Gakki manufactured its first grand piano  During the World Wars, the company expanded its product line to plane propellers, fuel tanks and wing parts  They entered the electronics industry in 1959 with an all-transistor organ  Nippon Gakki changed its name to Yamaha Corporation in its 100 th year of operation

12.  Since 2004, sales have not fallen below $4 billion and in 2008 reached almost $5.5 billion  2009 net sales totaled $2.9 billion  Stock price is currently around ¥10.50  Forecasted total expenditures for fiscal year 2010 = $205 million

13.  Headquarters are in Hamamatsu Shizuoka, Japan  Current President and Representative Director is Mitsuru Umemura  20,068 employees, 106 subsidiaries and 12 affiliated companies

14.  Founded by Orville Gibson in 1902 in Kalamazoo, MI  First 5 stockholders were Orville Gibson, three lawyers, a music teacher and a salesman  The company introduced the solid body guitar when Les Paul partnered with Gibson in 1946  The company began to fail in the 1980s  Its recovery can be credited to Henry Juszkiewicz

15.  New technology cost the company almost $500,000  New management strategies to implement updated data-processing systems  Juszkiewicz marketed the fact that most of Gibson’s employees are musicians

16.  Purchased Baldwin pianos in 2001  Cooperate with U.S. Fish and Wildlife Service regarding wood procurement  Focus on environmentally-friendly wood purchases

17.  Fender’s specific product line makes Harman and Yamaha less of a threat  Fender has larger market share than Gibson and higher annual sales  Fender’s reputation in the industry and the quality of its instruments exceed the 3 competitors

18.  1938: Clarence “Leo” Fender opened Fender Radio Service  1945: K&F Manufacturing Corporation was born (Fender and Clayton Kauffman)  Year later Kauffman leaves and becomes Fender Manufacturing Corporation  1949: Prototypes for Fender Esquire®, Broadcaster® and Telecaster® were completed, and introduces the single-pickup Esquire® the next year  Over next four years the world’s first electric bass guitar was created (the Precision Bass®) and several other guitars were established and sold

19.  1954: Fender Stratocaster (most popular)  1965: Fender was sold to Columbia Broadcasting Systems  1981: William Shultz named President  1985: Fender bought back and renamed Fender Musical Instruments Corporation  1991: Founder of Fender dies of Parkinson's’ disease  2005: Bill Mendello named CEO  Today, Fender is the leading maker of solid- body electric guitars with an estimated 50% of the U.S. Market

20.  Currently has 12 subsidiaries  1965-Fender acquired Squier  1995-Guild Guitar Company  2002-Acquired Jackson Guitars  2002-Acquired Gretsch  2003-SWR Sound Corporation  2004-Tacoma Guitars  Finally, 2007 acquired Kaman Music Corporation

21.  Est. in 1978  Supplier of Fender in the Southern Pacific  Expanded to include Jackson, Gretsch, Guild, and SWR amplifiers  Staff of authorized service technicians, and technical experts

22.  Est. in 1982  Consists of Yamano Gakki and Kanda Shokai (the 2 companies)  Musical instrument wholesalers  Yamano has retail outlets  Shokai only distributes though other company retail outlets  3 main Japanese manufacturing factories Fujigen Gakki, Tokai, and Dyna Gakki Fender chose Fujigen, but in 1997 Tokai and Dyna Gakki took over  Some of the Gakki guitars that are manufactured are exported but none of the Tokai guitars were are exported

23.  Est. in 1997  Premier manufacturer of Fender guitars who services all of Europe, Africa and the Middle East  Factory has average of 63 employees  Logistics and distribution costs soared Two-stage plan that included ending partial shipments, and only shipping in bundled packages  Worked with transportation companies and merged into new warehouse (two existing ones) in Netherlands  2007: Started manufacturing Taylor Guitars Cheaper and targeted lower income families

24.  Distribution center in California  All products sold around the world pass through here  All products are labeled, inspected, bar coded, weighed, and scanned before being shipped off

25.  5 Rules for Fender distribution: 1.) Have everything in stock 2.) Offer everything at fair price 3.) Provide same day shipping 4.) Offer reasonable credit policies to dealers 5.) Provide after-sale service  In 2003 moved into a larger plant in Ontario, California Better technology and improved production accuracy and efficiency

26.  Automated Factories Transitioned from hand-crafted to automated  Product Cycle  Patents Failure to obtain a patent for the Stratocaster  Components Wood Metal

27. Neck Fret Board Body Strings Frets Truss Rod Tuning Keys

28.  Partnered with Greenpeace “Music Wood” project  Developing “Green” facilities and distribution systems

29.  Headquarters Scottsdale, Arizona  Main Production Plant Corona, California

30.  England  France  Japan  Germany  Mexico  Spain  Sweden  The Netherlands

31.  2007 Musical Instruments Manufacturing Industry— 550 firms 1 st Yamaha $4,795,000,000 4 th Fender $ 672,000,000 5 th Harman $ 560,600,000 9 th Gibson $ 325,000,000  The top twenty manufacturers earned total revenue of $20.1 billion

33.  2006 Leading Musical Product Suppliers 1 st Yamaha 9.37% 2 nd Harman Professional 6.54% 3 rd Fender 5.62 % 6 th Gibson 2.88%  These market shares are based on sales by the top 125 suppliers.

34.  Deprecation of the Dollar Foreign Products Cheaper  Yamaha New vs. Old Products School Programs

35.  Multinational  Fender Corporations  Strategic Advantages

36.  Managerial Factors  Competitive Factors

37.  Corporate Image and Social Responsibility  Strategic Analysis  Flexibility  Attract and Retain Employees  Technology

39.  Product Strength  Customer Loyalty  Barriers to Entry  Advantage Taken of Market Potential

42.  Guitar Education  Fender Representatives  Global Communication Structure