Strategisk analyse og værdiansættelse af Bang & Olufsen

Winnie Lydiksen & Malene Christiansen

Student thesis: Diploma thesis

Abstract

Bang & Olufsen A/S has experienced difficulties during the economical crises, which has led to declining turnover and profit. Bang & Olufsen is a niche player in an exclusive market segment and is characterized by a very strong brand and broad geographical presence. The industry is characterized by rapid technological development, decreasing prices on electronics and a shift in consumer demands. Our valuation of Bang & Olufsen is based on three steps. First, the strategic analysis where we analyze the macro environment and the industry. The second level consists of a financial analysis of the historical performance, operation and financial risk of the company. The third and final step is the valuation of B&O on the basis of the strategic and financial analysis. The strategic analysis shows that many things have changed for Bang & Olufsen because of the crises and the sudden shift in consumer spending. B&O has failed to keep up with the rapid technological development. In 2011, Bang & Olufsen hired a new CEO and launched a new strategy ”Leaner, Faster, Stronger” with a focus on increased turnover and a minimization of cost. The new CEO also launched a new sub brand, B&O Play, and initiated a cooperation with Apple. The aim was to attract a segment of younger customers who require high quality products, but are not ready to pay the high prices of the original B&O products. Bang & Olufsen is focusing on business development in BRIC‐countries because the growth rates in these countries are noticeably higher than in the existing market areas of the company. The financial analysis showed that the problem for Bang & Olufsen has been a lack of cost adaption in the face of a declining turnover. The valuation of Bang & Olufsen is estimated with the DCF model. This model calculates the value base on the discounted free cash flow. The free cash flow is discounted with the estimated weighted average cost of capital (WACC). The free cash flow is found on the basis of a 5‐yearforecast and a terminal period estimating future revenues, investments and costs. The result of our valuation is a market value of 89,01 DKK.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2012
Number of pages88