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Grundig

Grundig a German manufacturer of consumer electronics, domestic appliances and personal care


products. Established in 1945 by Max Grundig in Nuremberg. Since 2007, the Grundig brand has
become part of Turkey's Arçelik A.S., the third largest company in white goods industry in
Europe and belongs to the listed Koç Holding, a global conglomerate with more than 80,000
employees.

Fall of Grundig:

Grundig prided itself on its German craftsmanship and the quality of its televisions, but it
was quality that came at a price.

And, in the fiercely competitive electronics market, people became more and more reluctant to
pay over the odds for TV sets. Grundig is now paying its own heavy price for failing to keep
pace with fickle consumers. The company has begun bankruptcy proceedings after years of
losses and a breakdown in rescue talks with foreign investors.

Cheap rivals

It was set up as a radio repair and testing business by Max Grundig immediately after World War
II. He produced his own radios including one of the first portables, the 1949 Grundig Boy, and
the company became the biggest radio maker in Europe. It was the supplier of the first TV sets to
post-war German consumers and one of the first companies to build color televisions. It
branched out into hi-fi equipment and became one of Germany's best-known names. At the
height of its powers, in 1979, it had 30 factories around the world and 38,000 workers. Now it
employs just a tenth of that number. It fell victim to rival businesses in Asia. At first the likes of
Sony and Samsung were competing on price - cheaper televisions but of lower quality. Gradually
they began to compete on quality as well.

Cordless phones

Grundig's grip on the market was slipping and by 1980 it had cut thousands of jobs and was
making a loss. After a long search for a partner, the Dutch electronics firm Philips took control
of the business in 1984. But it failed to turn Grundig around and in the mid-1990s left the
company in the control of its banks until radio aerial maker Anton Kathrein bought the majority
stake in 2000. Although he thought the business was good value he failed to find other investors
who agreed. Grundig continued to make the radios and televisions that had always underpinned
its business and it produced satellite equipment, dvd players, digital radios and set-top boxes. It
also tried to move into new areas, such as cordless phones, spending a lot of money with little
success.

Breaking-up

By 2001 Grundig's losses had reached 150m euros (£103m; $162m). Last year it lost 75m euros.
Industry experts think the company should have moved more quickly to find a niche for itself in
the consumer electronics market. "People buy either cheap goods or top-range TV sets and
radios, but not mid-price ones," said Jochen Wiesinger, a spokesman for the industry association
GFU. In the current economic climate the trend is for people to be more concerned about price
than they are about brand. A lawyer has now been appointed to help determine whether Grundig
can be restructured or must be broken up. The chief executive, Eberhard Braun, believes that
only new investment can save the business. "Without an investor, we do not see the company as
capable of being restructured." Grundig has reached an agreement with its banks that will allow
it to continue its operations until at least July. There are profitable parts of the company such as
the car radio manufacturing operation and the satellite equipment business. And the brand name
itself could be valuable. Last year the majority owner and Chairman Mr. Kathrein said he
thought the Grundig name alone was worth 500m euros.