BSTR/615

IBS Center for Management Research

Bose Corporation’s Competitive Advantages and its Shift to an

Online-Only Model
This case was written by Anil Anirudhan, under the direction of Sanjib Dutta and Debapratim Purkayastha, IBS Hyderabad. It
was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either
effective or ineffective handling of a management situation.

© 2020, IBS Center for Management Research. All rights reserved.

To order copies, call +91 9640901313 or write to IBS Center for Management Research (ICMR), IFHE Campus, Donthanapally,
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 BSTR/615

Bose Corporation’s Competitive Advantages and its

Shift to an Online-Only Model
“Originally, our retail stores gave people a way to experience, test, and talk to us
about multi-component, CD and DVD-based home entertainment systems. At the
time, it was a radical idea, but we focused on what our customers needed, and
where they needed it – and we’re doing the same thing now. It’s still difficult,
because the decision impacts some of our amazing store teams who make us proud
every day.”1
– Colette Burke, Vice President-Global Sales,
Bose Corporation, in January 2020
“The brand is very different today from where it started and stores could help tell
that story. I think this is a lost opportunity where they have decided it’s more cost
effective to give up on stores than to try and make them something that elevates
the brand.”2
– Ricardo Belmar, Senior Director-Retail Transformation,
Infovista, in January 2020
On January 15, 2020, Bose Corporation (Bose) a leading global manufacturer of high-end audio
systems, announced that it planned to close all 119 of its retail stores in North America, Europe,
Japan, and Australia. However, its remaining 130 stores – located in Southeast Asia, South Korea,
Greater China, United Arab Emirates, and India – would remain operational and would not be
affected by this decision.3
This strategic move by Bose was in response to the growing trend among customers to shop online
for its audio products such as speakers and headphones. Though Bose planned to close down its
stores, its customers had the choice to check out and purchase its products at retail stores such as
Target Corporationa, Best Buy Co., Inc.b, Applec, and the company’s Amazon storefrontd.
Some retail analysts were of the view that the high brand awareness that Bose products enjoyed
would lower the impact of the stores closure on overall sales. However, others pointed out that
Bose had always relied on the ‘wow’ factor to sell its products and that was aided by its retail
stores which displayed its products and provided an acoustic experience for the customers (Refer
to Exhibit I for an Image of Bose’s Store). The ‘wow’ factor was likely to be missing in the online
sales format with quite a number of competitor products vying for the attention of customers.4

a
Target Corporation is one of the largest retailers in the US and was founded in 1902.
b
Best Buy Co., Inc. is a consumer electronics retailer in the US and was founded in 1966.
c
Apple Inc. is a technology company based in the US. The company designs, develops, and sells consumer
electronics.
d
The Amazon storefront is an online model wherein the companies can display and sell their products on
the Amazon website. The storefronts offer exclusive visibility and display as per the requirements and
needs of the organizations.

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

The online market was extremely competitive with products from Sonose, Harman International
Industriesf, Sony Corporationg, Sennheiser Electronic GmbH & Coh, Apple, Bowers and Wilkins
Group Ltdi, Beats Electronics LLC.,j and other headphone manufacturers vying for a share of the
market. Commenting on Bose’s decision to shut down its retail stores, Harley Feldman, Co-
Founder and CMO at Seeonick, said, “The Bose move makes sense as they have partners where
shoppers can experience their headsets (and their competitors), they are sold online, and headsets
are not a new experience anymore. I am surprised that they did not keep open a few very high-
profile locations in places like New York City. Physical stores are less relevant as a pure
headphone outlet as phones stores and electronic stores are stocking headphones as part of their
audio offerings.”5

A NOTE ON BOSE

Bose was founded by Dr. Amar G. Bose (Amar Bose) in 1964 in the US. Earlier, when Amar Bose
was a student at MIT, he had purchased a top quality high priced stereo system as a reward for
himself for successfully completing his electrical engineering degree. He was, however,
disappointed with the sound of the speakers and began to research on psychoacoustics and
psychophysics to create a quality speaker with the perfect sound. His research led to many patents
to his credit and eventually to the formation of Bose.
Amar Bose started his company with a startup capital of US$10,000 given by his mentor and
advisor, an MIT professor, YW Lee. Amar Bose’s vision was to invent new technologies that
would truly benefit people and create a culture where innovation and teamwork would be valued
above all else (Refer to Exhibit II for the values and guiding principles of Bose).
The first speaker, the 2201 model manufactured in the initial years, was not up to the mark. After
further research, Bose came up with another product, the Bose 901 Direct/Reflecting speaker in
1968 for the home segment. This turned out to be a huge commercial success.6 Buoyed by the
success, Bose forayed into car stereos in 1970 and began to sell loudspeakers for musicians in
1972. In 1979, Bose entered into an agreement with automobile major General Motors for the
research and development of car stereos that would adapt to the acoustic interiors of the cars. An
approximate US$13 million was spent on the research, carried out over four years. It resulted in
the production of car stereos for various models of General Motors such as the Buick, Oldsmobile,
and Cadillac. The success of the car audio systems led to Bose eventually entering into
partnerships with Acura, Honda, Nissan, Mazda, Audi, and Mercedes Benz for design and
production of customized audio options for specific models of their cars.

e
Sonos is an American audio company. It was founded in 2002 and manufactures wireless speakers and
sound systems.
f
Harman International Industries, Inc. (Harman) is an American company with its headquarters in
Stamford, Connecticut, US. Harman is involved in the production and design of lifestyle audio
innovations and professional audio and lighting solutions
g
Sony Corporation is a Japanese multinational company founded in 1946. The company deals in video and
audio, digital cameras, smartphones, pictures, music, and financial services.
h
Sennheiser Electronic GmbH & Co is a German company founded in 1945. The company specializes in
the production of headphones, headsets, microphones, and ear buds.
i
Bowers and Wilkins Group Ltd is a British audio company founded in 1966. The company produces
wireless speakers, headphones, and home theater systems.
j
Beats Electronics LLC is an audio company founded in 2006 in the US. The company is a subsidiary of
Apple Inc. and produces audio products such as headphones, speakers, earphones, and accessories.
k
Seeonic is a software company based in the US and was founded in 2005. The company provides
inventory management software to manufacturers, distributors, and retailers.

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

Bose entered the Japanese market in the early 1970s with its foray into consumer audio systems. It
experienced failure initially in the country before finally tasting success. At the outset, Bose sold
its audio systems through a major distributor in Japan but that way, it managed to sell fewer than
100 speakers between 1970 and 1973. In 1975, it decided to start its own branch in the Japanese
market, but it still made little progress7. In 1980, annual sales were US$300,000 and they barely
covered expenses. Amar Bose then decided to go to Japan to study the market. He ended up hiring
a Japanese manager Sumi Sakura (Sakura). Sakura turned the company around and within four
years Bose registered sales of US$16 million. Sakura said, “I wanted the company to follow my
pattern, to live and breathe like a Japanese company. In Japan, you want to make it seem like your
product is for the professional user. If you sell a camera, you want it to be to a professional
photographer. Then the average consumer will want it. That’s how Japanese consumer thinks.”8
In 1984, Bose came up with the Acoustic Wave Music System which became popular due to its
compact design and big sound. The popular noise canceling headphones were introduced in 1986,
and they went on to become a major commercial success, being used by both the general public
and defense sector in the US and around the world. The noise canceling headphones were used by
commercial and air force pilots because of their ability to effectively cancel out the loud noise in
aircrafts and enabled the pilots to hear audio and communications clearly. For the US Army, Bose
introduced the ‘Bose Combat Vehicle Crewman Headset’ in 1993 for use in tanks and military
vehicles.9 In 1993, it introduced the Bose Wave radio which also was a huge success. An
Auditioner audio demonstrator was introduced in 1994 for architects, facility managers, and
builders. The demonstrator enabled them to hear the acoustics of a building’s proposed sound
system. In 1999, Bose launched online sales through its website.10
In 2010, Bose launched the Bose Ride system which was an electromagnetic based vibration-
canceling truck seat suspension. The system enabled truck drivers to have smooth rides without the
jarring and shaking and ensured that the drive was fatigue free with minimum strain.11
By the early 2000s, Bose was manufacturing audio systems for home, music professionals, space
programs, the automotive segment, auditoriums, stadiums, restaurants, and defense applications.
The company also manufactured a suspension system for heavy duty trucks (Refer to Exhibit III
for the product range of Bose). By the end of 2019, Bose had a presence in the Americas, Europe,
Africa, Asia Pacific, the Middle East, and the Caribbean.
Bose received numerous awards for continuous innovation and achievement in design including
the ‘International Design Team of the Year’ awarded by Red Dotl in 2008. In 2014, it was voted
as one of the ‘5 Most Innovative brands’ at the ‘Plus X Awards’m. These awards were given to
brands with the leading edge in quality and innovation in their products. In 2017, Bose received
the ‘Best of the Best’ design award by Red Dot.12 As of 2019, Bose had a turnover of US$ 4
billion and an employee base of 9,000 people.13

CREATING SUSTAINABLE COMPETITIVE ADVANTAGE

Bose’s products were the result of long-term research. It took 15 years of hard-core research for
the development of its path breaking technology in high end audio and for the noise cancellation
technology.14 According to Forbes’ Allen Adamson, “The brand’s pedigree in creating high-end

l
Red Dot was founded in 1954 in Germany. The Red Dot award is one of the world’s largest and most
renowned design competition. Every year more than 18,000 entries are received from companies,
organizations, and design professionals from over 70 countries.
m
The Plus X Award based in Germany is the world’s biggest innovation award for technology, sports, and
lifestyle. The various awards given by Plus X Award are The Seals of Approval, Best Product of the
Year, Most Innovative Brand of the Year, and Special Awards. The Plus X Award quality seal sets the
standard for the best products and is an unmistakable sign for brand quality.

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

audio equipment is well-known and well-respected. It’s made them leaders in the audio category.
Be it broadcasting sound, or canceling sound, their products are top class, examples of ingenuity
and innovation.”15
The technology used in the noise-canceling headphones for the consumer led to quite a few
successful innovative products such as the headphones for professional pilots in the military and
commercial space along with headsets for NFLn coaches. The profits generated were consistently
redirected toward research to create new breakthroughs in sound technology. Digital technology
was also used to improve the products, and this resulted in compact designs and miniaturization in
the headphones. Brian Maguire, Director (Noise reduction technology group) at Bose, said, “We
have been able to substantially miniaturize the technology. Digital technology has allowed us to
make large scale improvements not only in the total level of active noise cancelling performance
but also in the size of the package we are able to deliver to the end user.”16
The Bose Wave radio was a small remote-controlled clock radio designed for home use. With
innovative design and enhanced features, the Wave radio had rich, full sound which was not found
in other portable radios and had the additional option of being connected to television and CD
players that enhanced the sound quality of these devices. The quality of the Wave radio led to the
company registering sales of 200,000 units in the year 1998.17
Bose adopted the Total Quality Management (TQM)o concept. All the workers were cross-trained
to work in different positions with performance being the criteria for promotions. Creativity was
encouraged and its importance stressed at the manufacturing facilities at Bose. Sherwin Greenblatt,
Former President at Bose, said, “Our challenge is to prod people into being innovative and using
their creativity to do something that’s better. In the long run, this is the source of sustainable
advantage over our competition.”18

DELIVERING SUPERIOR CUSTOMER EXPERIENCE

Whenever Bose launched a new product, a demonstration was held at its stores to create a ‘wow’
feeling for its customers. It was observed that once the customer had had a live experience of
Bose’s products at its stores, he/she became hooked to it. Joel Rubinson, President at Rubinson
Partners, Inc.,p said, “One of the most impactful demos I ever saw was in a Bose store. The stores
do a lot more than sell products…they are experience stores that demonstrate the superiority of
Bose and the better lifestyle one can live as a result of buying their products”19
The customer service executives at Bose stores provided expert advice to the customers on the
purchase decision. Colette Burke, Vice President-Global Sales, Bose, said, “They take care of
every person who walks through our doors – whether that’s helping with a problem, giving expert
advice, or just letting someone take a break and listen to great music. Over the years, they have set
the standard for customer service.”20

PREMIUM PRICING

Bose relied on minimum advertising and its products catered to a niche target market. Most of the
products of Bose were priced more than that of its competitors such as Sony, Beats, Harman,
Bowers and Wilkins and Samsung. With excellent sound system and innovative features, most of
the products of Bose were high-end products with even the speakers and components priced high.

n
The National Football League (NFL) was founded in 1920 in the US. NFL is a professional American
football league in the US and organizes the football events.
o
Total Quality Management (TQM) is an extensive and structured organization management approach that
focuses on continuous quality improvement of products and services using continuous feedback.
p
Rubinson Partners, Inc. is a marketing and research consulting firm based in the US.

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

As most of the products of Bose were the result of extensive research done by its engineers, the
company owned a majority of the patents of the technologies it invented. The patents ownership
ensured that the company was in a position to set a high price for its products which were the first
to debut in the market.

COMPETITION

The competitors to Bose were companies such as Sonos, Bowers and Wilkins, Samsung, Sony,
Xiaomi, Beats and Harman. The advent of voice activated speakers from Amazon and Google
further increased the competition for the company. Apple had also emerged as a major competitor
with its Totally Wireless Headsets (TWS) which were extremely popular among millennials. As of
2018, Apple was in the top position with a 24% share of the headphones market worldwide
followed by Sony in second position with 22%. Panasonic was in third position followed by Bose
in the fourth.21 (Refer Exhibit IV for the Comparison of Bose and its Competitors).
In the third quarter of 2019, 43 million units of TWS were sold across the world and Apple had
taken the major share of 43% with 18.2 million AirPods. The second position had Xiaomi with
seven percent and the third position was taken up by Samsung with six percent.22 In the wireless
earphones categoryq, JBL was in the first position with eight percent, Sony in the second position
with six percent, and Skullcandy was in third position with six percent.23 The wireless headphone
categoryr had JBL with 13% in first position, Sony was in second position with ten percent, and
Bose was in the third position with eight percent.24
The competitors of Bose such as Samsung and Sony already had flagship stores in the US and JBL
and Harman had flagship stores in Madison Avenue in New York. In 2019, Sonos launched its first
flagship store in Manhattan, US, with private listening rooms.25

RETAIL GOES ONLINE

Since the early 2000s, the retail industry in the US and other countries had been facing massive
onslaughts from the online e-commerce companies and the year 2019 saw the highest number of
retail store closures.26 The industry was hit by the changing demographics and by online
onslaughts. The effects were such that there were a series of shutdowns of retail business and a
reduction in the number of retail stores, which led to the proliferation of both small and big online
sellers. According to Coresight Researchs, in 2019, the US retail market saw the closure of 9,302
retail stores, which was a 59 percent more than in 2018.27 (Refer Exhibit V for the Retail Stores
Closed in the US in 2019).
Analysts at UBSt had estimated that as of 2019, 16 percent of the retail sales in the US were done
online and this was expected to grow to 25 percent by 2025. These trends were likely to lead to the
closure of 75,000 stores in the US by 2026. Of these 75,000, electronic stores were expected to
account for 10,000 and clothing stores 20,000.28
With increased awareness about noise canceling headphones and networked speakers, customers
were purchasing Bose products online after reading reviews online rather than visiting the Bose
stores. With a lot of advice available on the internet, there was not much need for the technical
assistance provided at the stores.

q
Earphones are audio devices which can be fitted in the ear.
r
Headphones are audio devices which are worn over the ear and cover the entire ear.
s
Coresight Research Inc.is a research and advisory firm in the US. The organization provides analysis and
consulting in the areas of retail, technology, and fashion.
t
UBS Group AG (UBS) is a Swiss multinational investment bank and financial services company. It has its
headquarter in Zurich, Switzerland.

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

As there was a shift toward online shopping for Bose’s products,29 the company deemed it fit to
rely on the online model based on the strong ecommerce environment and the brand awareness it
enjoyed among consumers at the locations where it planned to close the stores. Also, most of the
sales for Bose had come from the sale of its headphones, smart and portable speakers, and
earphones that had been purchased online by most of its customers.30 A statement from Bose said,
“Today, Bose noise-cancelling headphones, truly wireless sport earbuds, portable speakers and
smart speakers are increasingly purchased through e-commerce, including Bose.com.”31

MAKING BOSE’S ONLINE MODEL WORK

With the stores closedown, Bose had to work on augmenting its online strategy. It had already
been carrying out online sales through its website since 1999. Most of the ecommerce net sales for
Bose from its online store Bose.com had been from the US and the global net sales for Bose in
2019 was US$ 192.9 million.32 This put Bose.com at #25 in the US Electronics and Media
ecommerce net sales in 2019, way behind the top three players, amazon.com, apple.com, and
bestbuy.com, with 40-45%, 10-15%, and 5-10% of the market share respectively.33 Bose used
social media aggressively to promote its products. The number of its Facebook followers grew
steadily from April 2017 to November 2019 with a decline in December 2019 and an increase
again being registered in January 202034 (Refer to Exhibit VI for Data on Bose’s Facebook
Followers from April 2017 to January 2020). On Twitter, Bose had a healthy following that grew
from 177,000 in April 2017 to 216,000 in January 202035 (Refer to Exhibit VII for Data on Bose’s
Twitter Followers from April 2017 to January 2020). One area that Bose had to focus on to
become a truly digital organization was hiring qualified digital and e-commerce professionals.
Bose teamed up with music artists, millennial influencers, and athletes to connect with the new
generation of millennials who were more comfortable doing online purchase. The young consumers
frequently consulted social media and millennial influencers for product information and to make their
purchase decisions. Bose used various hashtags such as #TeamBose, #SoundLink, #SoundWear, and
#SoundSport to boost brand affinity and brand awareness among the social media savvy young
consumers (Refer Exhibit VIII for the Detailed Information on the Various Hashtags Used by Bose).
The various influencers Bose had teamed up with were Lewis Hamilton the Formula One Racer;
Russell Wilson, a Seattle Seahawks Quarterback; Niall Horan, an Irish Music Artist; Mikaela
Shiffrin, an Olympic Gold Medalist and World Champion; Elianne Alexander, a Small Fitness
Influencer; and Kristen Taekman, a Fashion Blogger. Each influencer’s post was interactive with a
lot of options for the audience to utilize the various audio products of Bose while engaging in their
daily routines. As of 2018, there were 1.5 million views for the sponsored post’s video content.
The Instagram influencers had a total following of more than 37.8 million with 3.1 million likes
and 57.8 thousand comments.36
However, analysts felt that to compete with its rivals, Bose had to come up with an effective
pricing strategy and add more third-party resellers. It also had to increase its online presence with
the help of its loyal customers on online communities in Twitter, Facebook, and Instagram.
Anindya Ghose, Heinz Riehl Chair Professor of Business at Stern School of Business, New York
University, said, “Bose has to figure out an effective pricing strategy to combat its nearest
competitors and expand the number of resellers… It could also benefit more from customer
acquisition through targeted digital advertising (by diverting some of its cost savings from store
closings). Finally, it could try to leverage organic word-of-mouth from its existing loyal base of
customers through nurturing online communities.”37

ANALYSTS TEAR INTO THE STRATEGIC DECISION

Bose’s decision to close down its retail stores in some global markets evoked a mixed response
from analysts and retail market experts. Retail analyst Craig Patterson (Patterson) opined that
closure of the stores pointed to the fact that the company was deviating from the direct-to-
customer trend. The direct-to-customer trend had made the brands open more stores to directly

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

engage with the customers and provide a total customer brand experience. Most of the successful
brands had opted for more store openings rather than closing down the existing ones. Patterson
expressed his opinion that Bose’s strategy of closing down stores was likely to result in a decrease
in online sales. A report by the International Council of Shopping Centersu had mentioned that
operating physical stores resulted in increased web traffic, led to increased brand awareness, and
increased sales as a result of the ‘Halo Effect’v.38 Michael Kehoe, Retail Specialist, Alberta,
Canada, said, “A lot has been said over the past few years about the pace at which online shopping
is changing buyer behaviors and about the long term impact on physical retail. There is a direct
and positive correlation between having both a physical and a digital presence.”39
Some analysts opined that as the organization was an established entity with a long-time presence
in the market and high brand awareness, the decision to go online was advantageous rather than
detrimental. Mark A. Cohen (Cohen), Director of Retail Studies at Graduate School of Business,
Columbia University, said, “Bose shuttering its retail stores will not likely affect its sales very
much and will likely improve its profitability. As a long-standing industry leader in audio
technology, especially in headphones and portable speakers, The Bose brand reputation likely
lessens whatever need the company felt in the past in opening its own stores as a means of
providing customers with physical product trail.”40
However, the strategic move was criticized by some analysts. They were of the opinion that Bose’s
decision to close down its stores was a mistake. In the long run it was likely to have a detrimental
effect on sales; moreover as per some retail specialists, Bose was expected to return to its brick and
mortar model with flagship stores.41 The flagship stores were more suitable for informing
customers about the history of Bose and its research and innovation in sound technology and
provide the customers with a first-hand live experience of the products. Ricardo Belmar (Belmar),
Senior Director – Retail Transformation at Infovistaw, opined that the brand image of Bose at
present was different from its brand image when it commenced operations. The stores were apt to
replay the story of its transformation and growth and its uniqueness. Belmar further stated that
Bose had lost an opportunity with its decision to close the stores as a cost-effective measure rather
than utilize its stores for brand elevation.

LOOKING AHEAD

It remained to be seen how the strategic move by Bose to close its retail stores would impact its
sales performance and also whether customers would continue to purchase its products online.
Even though ecommerce was fast replacing the sales in the traditional retail store, would the
customers go in for the online purchase without ‘experiencing’ the Bose products in person?
Said Suresh Changanti, Co-Founder & Executive Partner at VectorScientx, “Retail is never going
to be a significant sales channel for Bose, but a very critical awareness channel. All customer
journeys start with awareness, so Bose is going to miss that important foundational step. They will
not have a close ear to the ground to introduce new products or pilot new innovations in test
markets... For Bose’s sake, I hope they will strengthen partnerships with likes of Best Buy, Costco,
etc., to showcase their products and have a good retail strategy.”42

u
The International Council of Shopping Centers is a global trade association of the shopping center
industry. The organization is based in the US and was founded in 1957.
v
The Halo Effect is the tendency for an impression created in one area to influence another. In retail, halo
effect is measured through the impact of physical stores on consumers and brand awareness – in ways
that can boost or diminish web traffic and online sales.
w
Infovista, based in the US, provides technological services in network management. The company has
expertise in data analytics and caters to the retail, manufacturing, logistics, and banking segments.
x
VectorScient is a US-based company into predictive marketing intelligence and predictive demand analytics.

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

Exhibit I:
A Bose Retail Store

Source: https://www.ecommercenext.org/bose-is-moving-to-e-commerce-by-closing-more-than-100-retail-
stores-in-the-us/

Exhibit II:
The Guiding Principles and Values of Bose
Guiding Principles:
• Innovation and technology
that deliver demonstrable benefits to customers.
• Teamwork and collaboration
that inspire 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.
Values:
These are the qualities that each and every employee knows is expected of them, and the
qualities that make up the foundation of Bose culture.
• We conduct business with integrity.
We must demonstrate the highest standard of business ethics in our dealings with our
customers, suppliers, and each other. We must gain the support and trust of others and build
our reputation through individual integrity and respect. Bose employees are expected to be
open and honest in all business matters and to act consistently with the values we share as a
company.
Contd…

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

Contd…
• We pursue excellence in everything we do.
Excellence is our way of life. It has always been integral to our business. We expect our
products, people, practices, and leadership to exemplify it. Our attitude is to always
challenge ourselves and each other to be better.
• We encourage innovation in all aspects of our work.
Research, innovation, and invention are the essence of our company. Our success results
from exploring new methods and ideas beyond conventional boundaries. Innovation must be
driven across the company into every aspect of our work. We must foster an environment
that encourages individuals to stretch their imaginations and abilities and gives them the
freedom to pursue their ideas.
• We have a passion for what we do and what Bose stands for.
Our passion and enthusiasm for what we do enable us to achieve the high standards of
performance and innovation we have set for ourselves. We believe that people who are
focused, internally motivated, and energized by what they do spread their enthusiasm to
others. We derive great benefits from individuals who champion their ideas and from
leaders who inspire us to higher levels of achievement.
• We treat others with respect.
Mutual respect and trust form the foundation for effective working relationships. We
recognize that cooperation with each other and between groups is vital to our success. This
means that each and every one of us must communicate openly, value different opinions,
and treat each other with fairness and respect.
• Together, we create value for our customers.
We must work in concert with our colleagues to ensure that all our contributions add value
for the customer. We have a customer perspective; we always try to understand their needs;
we create products and services of lasting quality that delight them in unexpected ways.
Source: https://www.bose.com/en_us/about_bose/our_values.html

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

Exhibit III:
Product Range of Bose
Product Category Product Features
Noise Canceling Blocks out the distractions, Acoustic noise
Headphones canceling technology.
Wireless Bluetooth Switch seamlessly between two Bluetooth
headphones devices, no wires, change volume, switch
tracks, take/end calls.
Sports and exercise Durable and weather resistant, comfort, and
Headphones
phones stability,
Hearphones Focused conversation, group conversation,
preferred television volume. Sound control.
Aviation headsets Light weight, compact, comfortable, soft
cushions, minimal clamping force, 30%
greater noise reduction.
Portable speakers Wireless, compact, water resistant.
Smart home Voice control, connectivity, multi-room
connect, compatibility, sleek design.
Home theater sound Voice control functionality.
systems
Soundbars Built-in voice assistants and Wi-Fi, smart
Speakers speaker.
Wave home stereo Wave guide speaker technology, compact,
systems accurate sound.
SoundWear companion Hands free, ears free, wearable technology,
speaker long battery life, sweat and weather resistant,
Bluetooth connectivity,
Computer speakers Simple, elegant.
Audio sunglasses Bose frames Sunglasses with built-in speakers, metal
hinges, nylon rims.
Bose Automotive Audio for Cars Music, active sound management, sound
placement, seat-centric experience,
Military Active noise reduction Noise reduction, clearer audio, reduces stress
Applications military headsets and fatigue.
Bose Work Conferencing systems Simplified conferencing experience, premium
Solutions performance, echo-canceling, and innovative
loudspeakers.
Source: https://www.bose.com/en_us/index.html

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

Exhibit IV:
Comparison of Bose and its Competitors
Countries
Company Key Areas Founded in Headquarters Employees Revenue
Present
Bose Research, 1964 Framingham, 51 9,375 $4B
Produce, Develop, US
and Retail audio
products,
speakers, for
professionals
worldwide.
Sonos Manufacture 2002 Santa Barbara, 50 1,446 $1.3B
Consumer US
electronics, and
wireless audio
products.
Harman Design and 1980 Stamford, US. N/A 30,000 $8.7B
engineer audio
products for
consumers,
automobiles and
enterprises.
Sennheiser Develop, 1945 Wedemark, 131 2,800 $812.9M
manufacture Germany
headsets,
headphones,
integrated systems
and microphones.
Beats Manufacturers 2006 California, NA 700 $1.5B
Headphones, United States
Bluetooth-enabled
accessories,
Speakers
Source: https://craft.co/bose/competitors; https://www.owler.com/company/bose

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

Exhibit V:
The Retail Stores Closed in the US in 2019
2500

2100
2000
NO OF STORES

1500
781

1000
749

564

512

371

359

332
500

261

222

210

210

174

160

159

154

125

122

108

106
0

RENT‐A‐CENTER
ASCENA  RE TAI L

T H E  K I T C H E N C O L L E C T I O N

S A M U E L S  J E W E L E R S

FOOT LOCKER
SHOPKO

SEARS

DE S TI NA TI ON MAT ERNIT Y

GAP

GAMESTOP
FRED'S

FAMILY DOLLAR

WALGREENS
P A Y L E S S  S H O E   S O L U R C E

C H A RL O T T E E  R U S S E

CHARMING CHARLIE

SLGNET JEWELERS
AVENUE
GYMBOREE

GNC

NAME OF THE RETAILER

Source: https://edition.cnn.com/2019/12/19/business/2019-store-closings-payless-gymboree/index.html

Exhibit VI:
Bose’s Facebook Followers from April 2017 to January 2020
Number of Followers (In Millions)

4.4
4.18 4.15 4.16
4.2 4.08 4.11
4.01 4.05
3.95
4
3.8
3.8
3.62
3.6 3.52

3.4

3.2

3
January 2020
April 2017

August 2017

December 2017

April 2018

August 2018

December 2018

April 2019

August 2019

November 2019

December 2019

Source: https://media.thinknum.com/articles/can-bose-survive-without-physical-stores-sales-data-cast-doubt-on-
future/

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

Exhibit VII:
Bose’s Twitter Followers from April 2017 to January 2020
Number of Followers (In Thousands)

250
209 212 213 215
201 205
189 196 197
200 177 182

150

100

50

January 2020
August 2018

April 2019

August 2019

November 2019
April 2017

August 2017

April 2018

December 2018

December 2019
December 2017

Source: https://media.thinknum.com/articles/can-bose-survive-without-physical-stores-sales-data-cast-doubt- on-

future/

Exhibit VIII:
Detailed Information on the Various Hashtags Used by Bose
Hashtag Detailed Information
#TeamBose To connect to athletes and fans alike to stress Bose’s commitment to enriching
the fan’s experience of watching the competition and also demonstrate how
the athletes train by having the best-in-class audio equipments.
#SoundLink To connect to ardent music listeners while on the go and looking for quality
sound performance through speakers.
#SoundWear To connect to users looking for deep and rich sound experience without
distraction from the daily tasks at hand.
#SoundSport To connect to those with active lifestyles and who look for secure,
comfortable, and durable in-ear headphones with exceptional listening
capabilities.
Source: https://mediakix.com/blog/bose-instagram-millennial-influencers-marketing-case-study/

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

End Notes:

1
Chris Welch, “Bose is Closing All of its Retail Stores in North America, Europe, Japan, and Australia,”
www.theverge.com, January 15, 2020.
2
Tom Ryan, “Is Bose Doing the Smart Thing in Closing its Stores,” www.retailwire.com, January 20,
2020.
3
“Bose to Close Retail Stores in North America, Europe, Australia, Japan,” www.cnbctv18.com, January
16, 2020.
4
Joshua Fruhlinger, “Can Bose Survive Without Physical Stores? Here's the Data,”
www.media.thinknum.com, January 25, 2020.
5
Tom Ryan, “Is Bose Doing the Smart Thing in Closing its Stores,” www.retailwire.com, January 20,
2020.
6
Glenn Rifkin, “Amar G. Bose, Acoustic Engineer and Inventor, Dies at 83,” www.nytimes.com, July 12,
2013.
7
Joel Kotkin, “Americans Are Selling the Japanese Everything from Shampoo to Catering Trucks. The
Trick is to Play by Their Rules,” www.inc.com, December 1, 1984.
8
Ibid.
9
Frank Beacham, “How a “Genius” Engineer Designed the First Noise Cancelling Headsets,”
www.thebroadcastbridge.com, February 19, 2015.
10
“Bose Corporation - Company Profile, Information, Business Description, History, Background
Information on Bose Corporation,” www.referenceforbusiness.com, accessed on March 10, 2020.
11
“Bose Corporation Introduces the Bose Ride-System for Heavy Duty Trucking,” www.businesswire.com,
January 27, 2010.
12
https://www.bose.com/en_us/about_bose/innovations_achievements.html
13
Enrique Dans, “Another One Bites the Dust: Bose Closes Half of its Stores,” www.forbes.com, January
17, 2020.
14
Shafi Khan, “Why BOSE Speakers are so Expensive (A Detailed Study),” www.medium.com, December
26, 2017.
15
Allen Adamson, “Bose Frames Are a Smart Example of How Savvy Marketers Zoom Out to Stay
Ahead,” www.forbes.com/, May 26, 2019.
16
Frank Beacham, “How a “Genius” Engineer Designed the First Noise Cancelling Headsets,”
www.thebroadcastbridge.com, February 19, 2015.
17
“Bose Corporation - Company Profile, Information, Business Description, History, Background
Information on Bose Corporation,” www.referenceforbusiness.com, (accessed on March 10, 2020.)
18
“Bose Corporation - Company Profile, Information, Business Description, History, Background
Information on Bose Corporation,” www.referenceforbusiness.com, (accessed on March 10, 2020.)
19
Tom Ryan, “Is Bose Doing the Smart Thing in Closing its Stores,” www.retailwire.com, January 20,
2020
20
Jacqueline Schneider, “Heritage Audio Brand Bose Closes Nearly Half of Physical Locations Embracing
Online Consumer Buying Trends,” www.forbes.com, January 22, 2020
21
Mark Mulligan, “Guess which is the Leading Headphone Brand,” www.midiaresearch.com, November 1,
2018.
22
Scott Scrivens, “The True Wireless Earbuds Market Exploded Last Year, Predictably Dominated by
Apple’s Airpods,” www.andriodpolice.com, January 2, 2020.
23
Ibid
24
Ibid

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 Bose Corporation’s Competitive Advantages and its Shift to an Online-Only Model

25
Tom Ryan, “Is Bose Doing the Smart Thing in Closing its Stores,” www.retailwire.com, January 20,
2020.
26
Nathaniel Meyersohn, “More than 9,300 Stores Closed in 2019,” www.edition.cnn.com, December 19,
2019.
27
Jordan Valinsky, “Bose is Closing More Than 100 Stores Worldwide,” www.edition.cnn.com, January
16, 2020.
28
Lauren Thomas, “75,000 More Stores Needs to Close Across the US, UBS Estimates, as Online Sales
and Amazon grow,” www.cnbc.com, April 9, 2019.
29
Jordan Valinsky, “Bose is Closing More Than 100 Stores Worldwide,” www.edition.cnn.com, January
16, 2020.
30
Robin-Leigh Chetty, “Why Bose is Shutting Down its retail Presence in Certain Regions this Year,”
www.htxt.co.za, January 16, 2020.
31
Trevor Mogg, “Bose to Close All of its US Retail Stores in Pivot to Online Shopping,”
www.digitaltrends.com, January 16, 2020.
32
https://ecommercedb.com/en/store/bose.com.
33
Ibid
34
Joshua Fruhlinger, “Can Bose Survive Without Physical Stores? Here’s the Data,”
www.media.thinknum.com, January 25, 2020.
35
Ibid
36
“Case Study: Bose Teams Up with Athletes, Music Artists, and Millennial Influencers,”
www.mediakix.com, accessed on March 25 2020.
37
Marcia Layton Turner, “Why Bose’s Move to Close Stores Should Actually Boost Profits,”
www.forbes.com, January 24, 2020.
38
Craig Patterson, “Bose to Shutter Canadian Stores Amid Brick-and-Mortar Retail Retreat,”
www.retailinsider.com, January 17, 2020
39
Mario Toneguzzi, “Study finds Physical Stores Drive Increases in Online Traffic and Brand Awareness,”
www.retail-insider.com, January 3, 2019.
40
Marcia Layton Turner, “Why Bose’s Move to Close Stores Should Actually Boost Profits,”
www.forbes.com, January 24, 2020.
41
Tom Ryan, “Is Bose Doing the Smart Thing in Closing its Stores,” www.retailwire.com, January 20,
2020.
42
Ibid

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