Shure Award Write Up

2016 North American Professional and Commercial Microphones

Company of the Year Award

2016

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 2 “We Accelerate Growth”

Contents

Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Visionary Innovation & Performance and Customer Impact ........................................ 4

Conclusion........................................................................................................... 8

Significance of Company of the Year ............................................................................. 9

Understanding Company of the Year ............................................................................. 9

Key Benchmarking Criteria .................................................................................. 10

Best Practice Award Analysis for Shure Inc .................................................................. 10

Decision Support Scorecard ................................................................................. 10

Visionary Innovation & Performance ..................................................................... 11

Customer Impact ............................................................................................... 11

Decision Support Matrix ...................................................................................... 12

The Intersection between 360-Degree Research and Best Practices Awards ..................... 13

Research Methodology ........................................................................................ 13

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 14

About Frost & Sullivan .............................................................................................. 15



Company of the Year Award Announcement

Frost & Sullivan has a global team of analysts and consultants continuously researching a

wide range of markets across multiple sectors and geographies. As part of this ongoing

research, we identify companies that are true industry leaders, delivering best practices in

growth, innovation, and leadership. These companies have a keen eye to the future, and

drive innovation that meets future needs before they become commonly visible; thereby

are often the first to market with new solutions.

They focus on delivering the best products at optimal prices to maximize customer value

and customer experience, and by doing so are growth leaders in their respective

industries. Identifying such companies involves extensive primary and secondary research

across the entire value chain of specific products and/or markets. Against the backdrop of

this research, Frost & Sullivan is pleased to recognize Shure Incorporated as the Company

of the Year in the professional and commercial microphones industry.

Background and Company Performance

Industry Challenges

The North American professional and commercial microphones industry has been facing

considerable challenges that are limiting its overall growth.

Continued price erosion, due to growing and evolving competition, is restraining overall

revenue. The North American professional and commercial microphones industry is highly

fragmented. Over 40 manufacturers target multiple segments with wired and wireless

microphone solutions. In realms such as the studio market, large commercial studios in

North America have been fading away in favor of home-based and decentralized project

studios. The exponential emergence of home-based studios has been accompanied by the

increased availability of new audio products at declining price points. In realms such as

the broadcast target market, on the other hand, the rise of the consumer and prosumer

segment has increased the role of low cost audio suppliers to the detriment of established

audio equipment brands. Due to the ever-growing availability of portable microphones and

the lack of adequate education/guidance on audio quality, many prosumers, content

creators and emerging artists are acquiring low cost audio products with “good enough”

capabilities at the expense of better performing studio microphone equipment.

At the business level, huddle rooms – small meeting spaces typically seating 2-6

attendees – have been on the rise, curtailing the opportunity behind audio and video

equipment deployed in larger conferencing spaces. In huddle rooms, cost-effective video

conferencing endpoints and tabletop audio conferencing devices with built-in microphone

capabilities have been efficiently eliminating the “huddling” aspect of small meeting

spaces rooms. In essence, built-in microphones within portable audio or video

conferencing endpoints reduce the need for microphone extension deployments.

Finally, inadequate strategic planning for new wireless spectrum allocation could

considerably deter wireless microphone sales for certain vendors. With the transition to



digital television, the FCC reorganized the broadcast spectrum in 2007 and allocated the

700 MHz band for mobile broadband and public safety communications use. This meant

that microphone vendors and users could not utilize the 700 MHz wireless spectrum after

June 2010. In March 2016 the FCC commenced a new auction for the 600 MHz band

starting at 698 MHz and moving downward, cutting spectrum availability further for

microphone manufacturers and users. The basic purpose of the auction has been to set

aside airwaves for next generation services, such as those offered by mobile telecom

providers. The new reallocation of wireless spectrum will inevitably result in reduced

bandwidth for wireless microphone operations and impact the business of both

manufacturers and end users who operate wireless microphones in the 600 MHz range.

Professional and commercial microphone vendors that proactively prepare for and

efficiently respond to evolving market trends, through innovative products, can most

effectively stay on the cutting edge to satisfy customer demands. Microphone vendors

with a more diversified offering will be more successful in sustaining a leadership position.

Visionary Innovation & Performance and Customer Impact

With more than 90 years of experience, and with a well-established visionary strategy and

execution excellence, Shure Incorporated has set the worldwide standard for professional

and commercial microphones. Multiple factors are contributing to its success, including:

addressing unmet needs; successfully identifying key mega trends; effective implementation

of best practices; leveraging a strong brand equity; and providing a high customer

purchase and ownership experience.

Addressing Unmet Needs:

Implementing a robust process to continuously unearth customers’ unmet or under-served

needs and creating the products or solutions to address them effectively is a key criterion

where Shure excels. With a background in audio innovation since 1925, Shure created its

first microphone product in 1932, after gradually setting aside its radio parts catalog

business. Following a series of microphone product releases, Shure created the legendary

Unidyne® Model 55 Microphone, which became the most recognized microphone in the

world. In 1941, Shure secured a prominent contract to supply the United States Armed

Forces with microphones during World War II, and the T-17B Microphone became the

most widely used audio device by the U.S. Army and Navy. In 1951, Shure launched the

55S, a variant of the original Unidyne model, which, later became known as the “Elvis

mic” due to its frequent use by Elvis Presley himself. Continuously striving for product

innovation, Shure introduced its “Vagabond” system in 1953, one of the first wireless

microphone systems for performers.

In the following years Shure continued with its relentless desire to unearth unmet

customer needs with the launch of several successful microphone models into the market,

including the Unidyne III in 1959; the SM57 (the U.S. President main lectern microphone

since Lyndon B. Johnson); the iconic Shure SM58®, the bread-and-butter of the Rock and

Roll industry; the SM11, the world’s smallest dynamic lavalier microphone; and other

industry-first microphone models. In 1990 Shure re-entered the wireless microphone



market with the L-Series and dominated the wireless product category worldwide within a

decade.

Over the next 26 years the company continued to announce innovative wired and wireless

microphone products, conferencing systems, audio processors, earphones and

headphones, and software systems that fueled Shure’s expansion both nationally and

globally to become the undisputed microphone market leader within the institution,

corporate, house of worship, and live performance target segments and a strong

contender in the theatre, broadcast and studio target segments. Throughout the years

Shure has demonstrated the ability to not only identify, prioritize and pursue emerging

growth opportunities, but also lead the market in terms of industry innovation. Holding

more than 40 percent of the North American professional and commercial microphones

market, Shure has always pursued customer under-served needs with relentless vigour.

Successfully Identifying Key Mega Trends

Visionary market leaders most effectively identify unmet customer needs and incorporate

key market trends in their growth strategies. More specifically, their long-term success is

determined by the ability to identify and properly address mega trends.

Shure has consistently identified and successfully bet on key mega trends when developing

its portfolio. These mega trends include mobility, millennial population, social media, and

connectivity/convergence.

In terms of mobility, the world is becoming increasingly mobile and individuals are

relentlessly demanding evolving and flexible mobile communications solutions. The trend of

mobility is in line with a “wireless everything” society. This reality is also true in the

professional and commercial microphones space. In spite of the wireless spectrum allocation

challenges posed by the Federal Communications Commission (FCC), wireless microphone

revenue is expected to continue to grow as more businesses and users demand wireless

technologies across all sectors. Shure has been at the forefront of this trend, working on the

issue of spectrum allocation for many years now from both the public policy and technology

perspectives. Today, the company offers a wide array of sophisticated, spectrally efficient

wireless microphone systems in the VHF and UHF spectrum as well as alternatives operating

in the unlicensed 900 MHz, 2.4 GHz, and digital enhanced cordless telecommunications

(DECT) spectrum. Shure has led the industry transition to digital wireless technology, which

offers unique audio and spectral efficiency benefits, and the company offers Mac, PC, and

mobile software products that enable larger system users to monitor, control, and

coordinate wireless frequencies for maximum performance. The company fully understands

that customers will continue to demand sophisticated wireless products, in spite of new

spectrum allocations, and is fully committed to make it happen.

Two other mega trends that Shure has been addressing are the increasing growth of the

millennial population (individuals between 15 and 34 years of age) and the explosion of

social media usage. Millennials are causing revolutionary changes in terms of connectivity

and collaboration. They are a tech savvy population that has easy adapted to sophisticated

products and services and collaborative work culture. The large millennial worker population



and the increased usage of social media tools have been exacerbating the growth of

consumer and prosumer content creators. Exponential growth of social media, digital

collaboration, and video/Internet-enabled consumer technologies have created a new breed

of celebrities, teachers, mobile journalists, and aspiring online creators who are filming,

recording, transmitting and broadcasting YouTube-like clips, episodes, programs, sketches,

and life moments on a daily basis for an ever-expanding online audience. As more aspiring

content creators transform their hobbies into commercial venues, they will need to invest in

better, more professional broadcast and studio equipment, such as microphones. Shure has

been carefully monitoring this ever increasing target market and has created various

microphone solutions and educational modules geared towards this new and growing breed

of broadcasters and studio recorders.

The growth of connectivity, convergence, and unified communications and collaboration in

the workplace has compelled Shure to focus attention on this growing corporate target

market. Not only are collaborative spaces growing within the corporate environment, but

more meetings are being held per company than ever before. During the 21st century, the

shift from large traditional audio and video conferencing hardware to desktop and mobile

experiences continues to considerably accelerate with the proliferation of innovative

collaboration solutions. In North America, collaboration services are increasingly being

deployed company-wide. Active host/full deployment type models are opening conferencing

services to more users than when previously these services were reserved for select groups

due to cost. The use of visual collaboration, in particular, has considerably grown and what

was once a checkbox on an RFP now holds serious weight in purchase decisions. As a

consequence of this growth, Shure has been actively offering innovative wired and wireless

microphone solutions, including the MXW and the MXA lines, which provide multiple

connection and power options (e.g. USB, CAT5), software integration capabilities, and

portability to satisfy evolving user demands. Corporate conference room aesthetics are also

an important consideration. For example, the Shure MXA Ceiling Array Microphone provides

complete audio coverage for the entire room from a multi-element system that mounts in

the space of a ceiling tile and carries power and audio on a single cable.

Shure’s success continues to be determined by the ability to identify and properly address

mega trends.

Implementation Best Practices

Since its early days in the professional and commercial microphone industry, Shure has

harnessed many best practices that have helped it to operate a successful business and

expand its user base. Early on Shure recognized the requirement to build processes and

tools that deliver consistent outcomes. The military specification quality standards that

earned Shure the US government E-Star of Excellence in WWII were not relaxed after the

war and remain as a foundation to this day. In the following decades, a growing number

of best practices have been used internally to improve business processes as well as

externally to guide customers and potential customers to better use and deploy Shure

technology. With more than 90 years of experience in all target segments, including

institutions, corporate, house of worship, theater, live performance, broadcast, and studio,

the company has effectively embraced the attributes of successful microphone designs



and applications and has accordingly provided full documentation, best practice material,

and diagnostic tools to a wide ecosystem of channel partners, institutions, and end users.

Shure’s Product Technical Support Department has built and maintains an extensive FAQs

database—featuring more than 4,500 entries—and published numerous industry-specific

educational publications. The mission of the company has always been to help the

customer to take full advantage of Shure products and solutions. In order to retain this

vision, Shure has established multiple internal practices to streamline product releases,

including continuous product hardware and software updates, testing tools across different

environments, continuous channel interaction, and ongoing customer feedback.

In its important role as the market leader of the industry, Shure strives to continuously

improve its processes and educate the market with best practices applicable for each

individual scenario.

Customer Purchase Experience

With one of the widest portfolio of professional and commercial microphone products,

Shure seeks to ensure customers feel they are buying the most optimal solution to

address their unique needs and constraints. Whether sound is amplified or recorded,

customers choose Shure solutions compelled by the company’s legendary brand

reputation, high-quality products, broad range of options, product customization

capabilities, and the company’s continuous commitment to technology innovation. In

North America, Shure continues to be the most purchased brand among musicians, audio

engineers, corporate and education facilities, houses of worship, government entities, and

sound contractors. Wired product lines such as the entry-level PG ALTA™ models, the

world-renowned industry standard SM line, premium Beta® classics, high-end KSM

microphones, customizable Microflex® installed models, and the portable digital recording

MOTIV™ line are chosen by thousands of customers on a daily basis. Shure’s expansive

wireless microphone portfolio addresses user needs and environments across all price and

performance tiers, with premium lines such as Axient® and UHF-R® visible daily in live

concert venues and television shows, as well as on special event broadcasts such as the

Super Bowl, The GRAMMY Awards, and the US political conventions. With a distinguished

set of products, a variety of deployment methods, and service levels, Shure strives to

ensure customers have what they need to conduct their activities. The iconic model SM58

celebrated its 50th anniversary in 2016 and continues to grow in unit sales year over year,

making it the most visible and trusted microphone in the world.

Customer Ownership Experience

Shure customers have always expressed their high satisfaction and positive experience

when acquiring the company’s professional and commercial microphone products. Case

studies of satisfied customers within different target segments and environments abound

with individuals and organizations praising Shure products for enabling efficient audio

amplification and recording. Having received a special GRAMMY award for the company’s

technical contribution to the music industry, Shure has amassed unpaid endorsements

from more than 500 artists, including The Who, Demi Lovato, Iggy Pop, Jennifer Lopez,

Henry Rollins, and Maroon 5, among others. To keep its users happy throughout the



lifetime of its products, Shure offers not only end-to-end product support and expert

advice, but also provides various product incentives and promotions, enabling individuals

and businesses to stay current when it comes to audio equipment.

Brand Equity

In the audio communications environment, Shure has done a commendable job to become

the leading professional and commercial microphones brand name. The Unidyne series

itself has marked Shure’s brand for over 75 years as the most iconic microphone product

used in North America. The White House has used Shure microphones for every U.S.

President since Franklin Delano Roosevelt. For over 40 years, the Presidential lectern has

been equipped with two SM57 microphones on a custom mount. The Unidyne line has

been used by countless political figures and legendary recording artists, including Ella

Fitzgerald, Elvis Presley, Frank Sinatra, Harry S. Truman, John F. Kennedy, Martin Luther

King Jr., and even Fidel Castro. Today, channel and customer perception of Shure is

synonymous with high-quality products, superior audio, innovative technologies, and solid

customer support. Brand awareness amongst business users and individuals is unmatched

within the industry. Buyers know to ask for Shure by name. The company tagline

“Legendary Performance” speaks to Shure’s unrivaled reputation for product reliability as

well as its association with many of the most memorable moments in cultural and political

history for nearly a century.

Conclusion

Shure continues to hold a strong leadership position in the professional and commercial

microphones market. The company’s pursuit to address unmet customer needs, its solid

implementation strategy, differentiated and innovative portfolio that target key evolving

trends, tight customer focus, and strong brand recognition in the professional and

commercial microphones market are among the factors that have helped the company to

excel in this industry and stand out from the competition.

With its strong overall performance, Shure has earned Frost & Sullivan’s 2016 Company of

the Year Award.

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Significance of Company of the Year

To win the Company of the Year award (i.e., to be recognized as a leader not only in your

industry, but among your non-industry peers as well) requires a company to demonstrate

excellence in growth, innovation, and leadership. This kind of excellence typically

translates into superior performance in three key areas: demand generation, brand

development, and competitive positioning. These areas serve as the foundation of a

company’s future success and prepare it to deliver on the two criteria that define the

Company of the Year Award (Visionary Innovation & Performance and Customer Impact).

Understanding Company of the Year

As discussed above, driving demand, brand strength, and competitive differentiation all

play a critical role in delivering unique value to customers. This three-fold focus, however,

must ideally be complemented by an equally rigorous focus on visionary innovation to

enhance customer value and impact.



Key Benchmarking Criteria

For the Company of the Year Award, Frost & Sullivan analysts independently evaluated

two key factors—Visionary Innovation & Performance and Customer Impact—according to

the criteria identified below.

Visionary Innovation & Performance

Criterion 1: Addressing Unmet Needs

Criterion 2: Visionary Scenarios through Mega Trends

Criterion 3: Implementation Best Practices

Criterion 4: Blue Ocean Strategy

Criterion 5: Financial Performance

Customer Impact

Criterion 1: Price/Performance Value

Criterion 2: Customer Purchase Experience

Criterion 3: Customer Ownership Experience

Criterion 4: Customer Service Experience

Criterion 5: Brand Equity

Best Practice Award Analysis for Shure Inc.

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Visionary Innovation & Performance and

Customer Impact (i.e., the overarching categories for all 10 benchmarking criteria; the

definitions for each criteria are provided beneath the scorecard). The research team

confirms the veracity of this weighted scorecard through sensitivity analysis, which

confirms that small changes to the ratings for a specific criterion do not lead to a

significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key players

as Competitor 2 and Competitor 3.

DECISION SUPPORT SCORECARD FOR COMPANY OF THE YEAR AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Company of the Year

Visionary

Innovation &

Performance

Customer

Impact Average Rating

Shure Inc. 9.0 9.0 9.0

Competitor 2 7.0 9.0 8.0

Competitor 3 6.0 7.0 6.5


Criterion 1: Addressing Unmet Needs

Requirement: Implementing a robust process to continuously unearth customers’ unmet

or under-served needs, and creating the products or solutions to address them effectively

Criterion 2: Visionary Scenarios through Mega Trends

Requirement: Incorporating long-range, macro-level scenarios into the innovation

strategy, thereby enabling “first to market” growth opportunities solutions

Criterion 4: Implementation of Best Practices

Requirement: Best-in-class strategy implementation characterized by processes, tools, or

activities that generate a consistent and repeatable level of success.

Criterion 3: Blue Ocean Strategy

Requirement: Strategic focus in creating a leadership position in a potentially

“uncontested” market space, manifested by stiff barriers to entry for competitors

Criterion 5: Financial Performance

Requirement: Strong overall business performance in terms of revenues, revenue growth,

operating margin and other key financial metrics

Customer Impact

Criterion 1: Price/Performance Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market

Criterion 2: Customer Purchase Experience

Requirement: Customers feel like they are buying the most optimal solution that

addresses both their unique needs and their unique constraints

Criterion 3: Customer Ownership Experience

Requirement: Customers are proud to own the company’s product or service, and have a

positive experience throughout the life of the product or service



Criterion 4: Customer Service Experience

Requirement: Customer service is accessible, fast, stress-free, and of high quality

Criterion 5: Brand Equity

Requirement: Customers have a positive view of the brand and exhibit high brand loyalty

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts can then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

DECISION SUPPORT MATRIX FOR COMPANY OF THE YEAR AWARD

High

Low

Low High

Cu

sto

mer I

mp

act


Shure

Competitor 2

Competitor 3



The Intersection between 360-Degree Research and Best

Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often, companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degree research

methodology provides an evaluation

platform for benchmarking industry players and for identifying those performing at best-

in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



Best Practices Recognition: 10 Steps to Researching,

Identifying, and Recognizing Best Practices

Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess

their fit with select best practice criteria. The reputation and integrity of the Awards are

based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized award candidates

6

Conduct global industry review

Build consensus on award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible award candidates, representing success stories worldwide

7 Perform quality check

Develop official award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice award recipient

Review analysis with panel Build consensus Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform award recipient of award recognition

Present award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of award and plan for how recipient can use the award to enhance the brand

10 Take strategic action

Upon licensing, company may share award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess award’s role in future

strategic planning

Widespread awareness of recipient’s award status among investors, media personnel, and employees



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Shure Award Write Up