OK, I did another thought exercise. Don't ask me where I got the numbers. It's a hypothesis. If you don't like these numbers, do propose more valid ones. Besides, this is a thought exercise for discussion, not a Havard Business Review case study.

So, if Steinway customers average $300,000 annual income, which is top 3% according to the Wall Street Journal, then the TAM (total addressable market) for Steinway in the US is about 9,000,000 individuals. If we use 4 people per household, that's 2.25 million households that potentially could become a Steinway household. If 10% of these households buy Steinways, then they could sell up to 225,000 pianos. If each household buys one every 50 years, that's 4,500 pianos a year Steinway could sell.

So the fact that Steinway sold only 1,000 pianos last year in the US suggests only 2% of US households that could afford a Steinway are buying a Steinway. If your marketshare is only 2% of your TAM, how long can you keep up that product line?

Of course, if Boston and Essex is killing it, then Steinway would be able to subsidize its Steinway products with its Boston and Essex products. I don't have any idea how well Boston and Essex are doing.

I am a Steinway customer, and I wish them well. I just don't see how they could survive as an independent company. It would make business sense for Samick to take over the Boston line, close the NY factory, and move production to Hamburg, or vice versa. The 2% of that top 3% of the US income bracket are not price sensitive to the difference between NY and Hamburg products. This whole TN thing makes absolutely no sense. If you are marketing to the upscale you need to be associated with certain cities, NY, Paris, London, period.

If you dig through some of their annual reports, (maybe a year ago?) they mention that Boston was not doing so well. It's expensive to build in Japan was the thought.

I worked for a few Fortune 100 firms and there are several non-invasive ways of determining a customer's net income / net worth ... and I agree w/ the line of thought that Steinways are just pricing themselves out of the market ... that said, I bought a Steinway K-52 upright for my home and a Mason and Hamlin upright for my 2nd house each in the last 3 years ... Both American made pianos and I had a preference to an American made piano ... the Mason was 60% the cost of the Steinway and if I had to do it again, I'd buy two Masons they are a better value in my opinion

In this day where digital pianos are the volume sellers, Steinway must be more competitive and (in my opinion) they should stay American based as it is a deciding factor for many

The same could be said of Rolls Royce, Ferrari, and the high-end German piano manufacture's who "survived" despite two world wars that devistated their entire market.

Does the fact that Steinway has "survived" for 150 years give you a hint that your suppositions are poor?

Perhaps you should argue that bumble bees can't fly.

Wow. My in-state tuition at Berkeley in 1973 was $637.50/year. My brother's tuition at an Ivy League university was $4,000/year.

Neither Rolls Royce nor Ferrari were independent for a very long time. Rolls Royce were at times owned by Ford and VW while Ferrari is owned by Fiat. This is the model for most high end niche brand today. High end niche brands need to seek shelter under the wing of a large mass market company. If that's surviving, then Steinway will probably survive. Steinway by Pearl River, haha. Just kidding.

Disclaimer: I have no idea whether Steinway’s management is considering any kind of move or not. Offhand I can think of several reasons to support arguments both for and against such a move. But this is not among them.

Skilled and dedicated workforces are not found; they are made. Competent people are hired, they are trained well and they are paid and treated with reasonable respect. I have no doubt that Steinway pianos—perhaps with some minor revisions to the assembly process—could be built just as competently in Tennessee as they are in NYC. Of course there would be problems with the transition; there always are with transitions of this sort, but they can be managed and minimized.

And, while I am a vocal advocate of efficient and useful public transportation systems, it is unlikely that the lack of such a system would be a critical factor were assembly to be relocated to an area like Gallatin, Tennessee. It’s been close to 25 years since I’ve driven through the area but I rather doubt the cost of owning and operating a private car is as high in Gallatin as it is in NYC. Nor is it likely that traffic congestion is quite the same problem.

ddf

And, while I am a vocal advocate of efficient and useful public transportation systems, it is unlikely that the lack of such a system would be a critical factor were assembly to be relocated to an area like Gallatin, Tennessee. It’s been close to 25 years since I’ve driven through the area but I rather doubt the cost of owning and operating a private car is as high in Gallatin as it is in NYC. Nor is it likely that traffic congestion is quite the same problem.
ddf
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Hmm, we park them in the fields around here, if we want. Or in the yard. Heck, most people I know have had reason to drive in their yards at some time or another...
And traffic jams in Gallatin ?? Whoo hop, I heard that one guy last week had to sit through TWO green lights before he could get through the intersection, so who knows what the world is coming to?.
Regards,

What?...he couldn't get the old beater restarted?

ddf