What If One Company Made Everything?

From a marketing point of view, most high end audio manufacturers probably see a definite value in having more than just one component available for sale to their customers. The more components they make, the greater the opportunity for sales. This explains why speaker companies may also make cables, for instance. Or an electronics firm may make amps, preamps, transports, DACS and other components.

AR-one1.jpgCompanies like Hegel with their Master Sound Works©, Esoteric with their Sound Engine Technology© and others are examples of this approach. Cable companies are almost universal in promoting a "one cable manufacturer" concept.

There is logic in having as many of the components as possible from one manufacturer. Harmony. Consistency. Better sound. This is what the proponents claim. So what would happen if a manufacturer really tried to furnish every component from the wall outlet to the speakers?

First would be the R&D budget. The speaker engineers would tell management that their category is more important than the amp guys. The digital folks would say that because digital is so popular theirs is most important and want a larger share of the budget. The analog engineers would claim they need a greater share of the R&D funds to make the turntable sound more "warm." The engineers responsible for things like wall outlets, cable elevators and other assorted "tweaks" would always feel like they were being slighted. The cable guys would just complain.

AR-one2.jpgSecond is the manufacturing process. How much capital would it take to become an expert at manufacturing and assembling all components in an audio system? Woodworkers would be needed for the speakers. Pick and place equipment and surface mount technology would be required for building circuit boards. Equipment to make transformers, power supplies and the like would be required. If any of the components produced are going to look good, the company will need a huge investment in CNC machining equipment, sheet metal fabrication, paint and anodizing production lines and finishing equipment. Not to mention welding and assembly work cells, both automated and manual. In order to better manage inventory they would look to set up Kanban and Kaizen programs. They would implement world class manufacturing techniques. How much would all of this high tech equipment and manufacturing practices cost? What would it do to the price of the equipment? Outsourcing is an option but then control is basically lost.

AR-one4.jpgThen there is the problem with inventory. How do you manage inventory on, say for instance, $50,000.00 amps? How many do you expect to sell each year? How many assembled, ready to ship units do you keep on hand? How do you divide the inventory budget between speakers, electronics and cables? Inventory management is a huge investment that can only be fueled by very deep financial reserves. Imagine the line of credit the total system approach company would need from the bank.

Another factor is the market in which this company plans to target. Will they produce a more affordable, higher unit sales type of model or the ultra high end, ultra expensive type of product? How many people will realistically spend six figures and up for an audio system with one manufacturer? How many people will realistically buy their entire audio system from one manufacture regardless of the price? What would the cost of sales be to market this company? Would their gear even be price competitive?

The questions and difficulties go on and on...

Having an amp and preamp from one company is certainly not a bad idea. I would also agree with the cable companies that there is no downside to having the entire cable loom from one manufacturer. But the all things to all people is a difficult business practice at the very least.

I suspect this is the reason manufacturers do not even attempt to do so. It is just not a sound business practice or a realistic sales model. But who knows, perhaps one day some enterprising company may well give it a try. If so, I look forward to seeing what happens

comments powered by Disqus

Audiophile Review Sponsors