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. Questions for Discussion Based on concepts discussed in this chapter, describe the factors that have contributed to Bose’s new product success.