Company Case Bose: Better Products through Research
In a recent survey by brand strategy firm Lippincott, the most trusted brand in
consumer electronics was not Apple. Nor was it Samsung, Sony, or Microsoft. It
was Bose, the still relatively small, privately held corporation that has been making
innovative audio devices for more than 50 years. Despite putting more than 30
million new sets of headphones alone on or in customers’ ears last year, Bose rang
up only about $4 billion in revenues versus Apple’s $234 billion. But when it
comes to the passion customers feel for their brands, the Massachusetts-based
technology company outshines even Apple. Bose forges that deep consumer
connection based on the brand’s design simplicity and brilliant functionality.
Bose adheres religiously to a set of values that have guided the company since its
origins. Most companies today focus heavily on building revenues, profits, and
stock prices. They try to outdo competitors by differentiating product lines with
features and attributes that other companies don’t have. Although Bose doesn’t
ignore such factors, its competitive advantage is rooted in its unique corporate
philosophy. “We are not in it strictly to make money,” says CEO Bob Maresca.
Given the company’s focus on research and product innovation, he points out that
“the business is almost a secondary consideration.
The Bose Philosophy
To understand Bose the company, you must first look at Bose the man. In the
1950s, founder Amar Bose was working on his third degree at the Massachusetts
Institute of Technology. He had a keen interest in research and studied various
areas of electrical engineering. He also had a strong interest in music. When he
purchased his first hi-fi system a model that he believed had the best specifications
he was disappointed in the system’s ability to reproduce realistic sound. So he
began heavily researching the problem to find his own solution. Thus began a
stream of research that would ultimately lead to the founding of the Bose
Corporation in 1964. It also led to the development of the long-standing Bose
slogan “Better Sound Through Research.” From those early days, Amar Bose
worked around certain core principles that have guided the philosophy of the
company.
In conducting his first research on speakers and sound, he did something that has
since been repeated time and time again at Bose. He ignored existing technologies
and started entirely from scratch, something not common in product development
strategies. In another departure from typical corporate strategies, Amar Bose put all
of the privately held company’s profits back into research and development, a
practice that reflected his avid love of research and his drive to produce the
highest-quality products. In doing so, he also bypassed the process of figuring out
what customers wanted, instead keeping his research confined to the laboratory
and centered on the technical specifications of creating a superior product. Today,
this approach is considered heresy in the innovation world. Amar pursued this
approach because he could. He often pointed out that publicly held companies have
long lists of constraints that don’t apply to privately held companies, noting that
“if I worked for another company, I would have been fired a long time ago,” For
this reason, Bose always vowed that he would never take the company public.
“Going public for me would have been the equivalent of losing the company. My
real interest is research that’s the excitement and I wouldn’t have been able to do
long-term projects with Wall Street breathing down my neck.”
Innovating the Bose Way
The company that started so humbly now has a breadth of product lines beyond its
core home audio line. Additional lines target a variety of applications that captured
Amar Bose’s creative attention over the years, including military, automotive,
homebuilding/ remodeling, aviation, and professional and commercial sound
systems. It even has a division that markets testing equipment to research
institutions, universities, medical device companies, and engineering companies
worldwide. The following are just a few of the products that illustrate the
innovative breakthroughs produced by the company. Speakers. Bose’s first product
