How commitment to craftsmanship leads to unique value: Steinway & sons' differentiation strategy

The positioning perspective in strategic management suggests that successful differentiation results from a firm's deliberate efforts to create something that is perceived as being unique. This usually involves looking beyond the proximate to pursue distant opportunities. However, a firm that pursues local opportunities eventually may be perceived as being unique especially when competitors decide to follow other strategic paths within the same industry. In the language of the NK modeling approach, a firm can attain successful differentiation by choosing to move to a different peak (i.e., pursue distant opportunities), or to stay on the same peak in which it is currently located (i.e., pursue local opportunities). While extant strategy research has expounded the first path to differentiation, the second path has remained underexplored. Relying on a data set that combines primary and secondary sources, we use an historical case study research design to explore how and why, over time, Steinway & Sons adhered to traditional craft manufacturing methods to develop pianos that most virtuoso concert pianists still prefer today. While this commitment to craft methods enhanced the perceived uniqueness of Steinway & Sons' pianos, it also constrained ability to adopt mass-production technologies even as other firms introduced them to reduce production costs and target piano mass markets. The case offers a counterpoint to the view that a successful differentiation strategy requires a firm to pursue distant opportunities by moving away from its current position on the competitive landscape.