Attending the IoW Festival in 1969 was a seminal moment in this young man’s life – Dylan The Who, Moody Blues, The Nice, Richie Havens, Joe Cocker, et al. So yesterday’s headline on The Economist website “Is this the end of the rock guitar?” plucked a few of my heart strings…
It is not the first such headline. In June last year the Washington Post had a long article entitled “Why my guitar gently weeps – the slow, secret death of the six string electric”. Both were prompted by news that the iconic manufacturers of electric guitars – makers such as Gibson and Fender – have been posting losses over the last few years. The simple fact appears to be that there is a significant slowing in demand for new guitars. The articles speculate that this is for a number of reasons:
- less “guitar-led” music in the charts
- fewer so-called “guitar heroes”
- a market awash with good quality second-hand guitars
So is this a classic case of a product life cycle going into decline? Is the electric guitar simply a modern version of the buggy whip and tin opener? If so, can operations management thinking resolve the challenge such a decline presents?
Well the classic response to decline in demand is product innovation. And this was what Gibson attempted by working on self-tuning “robot” guitars. In 2015 all Gibson guitars had this feature, and sales dropped like a stone. The guitars were more expensive and the added “new” feature was not something that customers wanted. In 2016 this feature became just an optional extra.
Fender on the other hand have gone down a different route, developing service innovation. They have developed a number of online tools to help people learn how to play the guitar; they partner with The Music Experience in setting up “try-out tents” at live music festivals; and support the School of Rock music education programme.
The other response is more strategic, shift from just making guitars into future growth products or categories. Gibson have also done this. In 2014 it acquired Philips audio division in order to get into consumer electronics, especially headphones, speakers and digital recorders. This also does not seem to have solved the firm’s financial problems (which is probably why Philips were happy to rid themselves of their division).
What would Dylan say?
“Once upon a time you dressed so fine
Threw the bums a dime in your prime, didn’t you?…
You used to laugh about
Everybody that was hanging out
Now you don’t talk so loud
Now you don’t seem so proud…”