Description
Fender vs. Gibson: Abstract
Gibson and Fender, two of the biggest success stories in the guitar industry, were founded in 1902 and 1946, respectively. After both companies introduced their version of the electric guitar, their stories became intertwined, and they began a race for innovation interspersed with periods of financial crisis, corporate takeovers, and poor strategic decisions. But, over time, they captured a 70% share of the market between them and became world-renowned, producing legendary guitars that changed the face of popular music, and thus of culture. In response to declining sales of electric guitars in the mid-2000s, the two companies adopted very different survival strategies. Gibson opted for diversification, purchasing companies that expanded its product line, while Fender chose to attract new audiences with high growth potential. Gibson’s overly ambitious strategy led it to bankruptcy, allowing Fender to retain its leadership status. Parts A, B, and C of this case present the two companies’ history, their innovations, their evolving product lines, and the consequences of their strategies.
Teaching objectives
- Contextualize the companies in terms of their history and competitors and conduct SWOT analyses (strengths, weaknesses, opportunities, and threats).
- Identify the companies’ target clienteles and positioning strategies.
- Discuss the strategies adopted to protect their competitive position and respond to changes in their business environment.
Main themes covered
- Competitive advantage
- Targeting
- Competition
- Diversification
Multi-part case
- Part A: Gibson: Tradition, Innovation, and Diversification
- Part B: Fender: Turbulence, Differentiation, and Adaptation (included when buying a teacher license only)
- Part C: Innovation in the Electric Guitar Industry (included when buying a teacher license only)
Additional information
Teachers’ notes are available for university teachers only. Please contact the HEC Montréal Case Centre.
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