Market Development through Materials Substitution - Supplying Added Value to the Musical Instrument Industry

Sammanfattning: The Sandvik Group is a world leading company and their unique competence in materials technology has resulted in three core areas; Cutting Tools, Mining and Construction and Materials Technology (SMT). This thesis has been initiated by their third business area, SMT, who is looking into the possibility to enter a new industry by offering superior material solutions. The industry is the musical instrument market comprising a number of different instruments made of various materials. The thesis’ focus is put on the instruments consisting of parts made of metal alloys, since SMT is a world leading producer of high technology stainless steels and special alloy materials such as titanium. The thesis is a market analysis of the musical instrument industry. Various analyses are made with the purpose to find out if SMT successfully can become a supplier of high quality materials to the musical instrument industry. SMT offers their customers, in this case the instrument manufacturers, a close cooperation to enable developing materials that fulfil the customers’ demands and wishes. The potential parts should have evident problems with their current materials so that the possible solution developed by SMT gives an evident higher value for both the instrument manufacturer and the end customer. Since the musical instrument industry is a very wide business, a couple of different steps are made to gradually reduce the quantity of the instruments to enable focus put on the most interesting parts. The tools used for this are, different field studies, literature studies, questionnaires sent out to musicians, stores and manufacturers, and interviews both with manufacturers and people within SMT. It was found through the various analyses that SMT should invest in cooperation with a harmonica manufacturer. The harmonica consists of reed plates that are exposed to human saliva and oxygen leading to corrosion and wear. The market has currently a need for a more durable and more corrosion resistant material and that is perfectly in line with SMT’s core competencies. The market is however not as big as hoped and it is necessary for SMT to gain a large part of the manufacturer’s market. It is suggested that SMT should position themselves in the industry using the focused differentiation strategy. This since the cooperation they offer to their customers are outstanding due to the fact that they take the research expenditures and try to develop a tailormade material after the customer’s wishes. The possible new product therefore comprises a superior quality which makes it possible for SMT to set a higher price. It is furthermore recommended that SMT should be open for some other areas within the musical instrument industry. Regarding the trombone slide there is a belief that this could be a more profitable project even though the market is evidently smaller than for the reed plates. A trombone is a lot more expensive and the price should therefore be less sensitive to change. However, to enable a successful project on this product, process development must be undertaken in cooperation with a customer. As to other products more investigations need to be made in order to clarify whether or not it might be profitable to enter their markets, for example with drum hardware and frets for the guitar. Problems have been discovered in these areas but contacts with interested manufacturers have not been initiated.