Harman Portfolio Opportunity
Starting with Dr. Sidney Harman's acquisition of JBL in 1969, Harman International has a track record of expanding via acquisition. The company went public in 1986 and has used shareholder funding to strategically diversify its holdings.
The chart below maps the business structure of the Harman Consumer Systems Group, comprised of the Harman Consumer Group and the Harman Specialty Group divisions. It does not include Harman's professional groups in the automotive and music industries, nor does it fully address the large volume OEM business of Harman Consumer Systems Group's mobile brands. Yet these businesses do feed and strengthen Harman's consumer and specialty efforts.
Harman Consumer Group brands Harman Kardon, JBL and Infinity (both home and car) see wide distribution to national retailers, regional retailers, distributors, installers and some specialists. Distribution is very limited for the Specialty Group brands Mark Levinson, Revel and Lexicon; Mark Levinson, for example, only goes to 125 dealers in the United States.
"We have product that ranges from those connected to multimedia and to computers that start at $49 [to] stereo systems with the Mark Levinson brand upwards of $60,000 in price," says Gina Harman, president of the Harman Consumer Group. "We have processors that range from $5,000 to $50,000. With a wide range of applications, we can address a wide range of customers. We watch very carefully to make sure each of our brands offers the consumer a unique choice."
To maintain brand differentiation and focus, Harman's consumer and specialty divisions are responsible for their own marketing strategies and product development, although they share some engineering resources and have access to the larger Harman braintrust. For example, the Harman Kardon Consumer Group has its own staff at Harman/Becker's automotive engineering center in Germany to interact with the center's 1,300 engineers and transfer consumer applications to the consumer team.