The Grundig Story

The Grundig Story
Case Code: BSTR200
Case Length: 16 Pages
Period: 1980-2005
Pub Date: 2006
Teaching Note: Not Available
Price: Rs.300
Organization: Grundig AG
Industry: Consumer Electronics
Countries: Germany, United Kingdom
Themes: Failure of Strategy, Bankruptcy
The Grundig Story
Abstract Case Intro 1 Case Intro 2 Excerpts

Background Note

Grundig was set up in 1945. The Second World War had thrown the German economy into disarray. There was immense damage to property and equipment of all types, including household radio sets. In the period after the war, there was a huge demand for repair services. Max Grundig (Max) was until this time, a radio dealer. He sensed that there was a lot of money to be made in repair and started production of devices used to repair radios from a makeshift workshop in Regnitz, a small village in West Germany. He launched Tubatest tube tester and Novatest testing device under the Grundig brand. The devices were instant hits and Max shifted into a new workshop at Jakobinerstra├če in the town of Fuerth.

In the post-war years, Germany was under the full control of the Allied forces and the production and sale of radios was not permitted. In 1946, Max launched the Hienzelmann - a radio kit which customers could put together (technically, the Hienzelmann was not a radio and hence evaded the ban).

The path-breaking product was a huge success with the public. By 1947, the demand for Hienzelmann was so high that production had to be shifted to larger premises at Kurgartenstra├če. In 1948, Grundig launched a complete radio - Weltklang which was appreciated for its first-rate reception. By 1949, the company was firmly on the growth path and shifted to its new premises which included a new office building and a three-storied factory complex. In the same year, the Grundig Boy - a portable cabinet radio - was launched, and it was a runaway success. In 1950, Very High Frequency (VHF) was introduced in Germany. Responding to the demand for VHF receivers, Grundig launched the 380W which had seven AM and eight FM circuits...

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