Those Groovy Danes
ExecutiveMagazine -

The quickest way to get to Karup in the North West of Jutland from Copenhagen is to take a 45-minute internal flight. Looking out of the 50-seater, ATR 42 turbo prop, this part of Denmark is as you would expect: flat farming country, dotted with wind turbines and lakes.

In nearby Stuer, one is faced with the full Danish eco-friendly living experience: Bike-riding families and couples pulling toddlers in tasteful wooden trailers. Those who choose to drive cars, have sensible Renault Scenics and Volvo station wagons. Even the clothes are utilitarian: sandals and cargo pants; all stout walking kit. There is not one piece of litter to be seen and crossing the traffic light on red creates ripples of disapproval among the good citizens.

This is the land where women get 12 months maternity (Danish men get six months to help with the nappy changing and other nurturing duties). It is about as Utopian a society as one can imagine but until sandals with socks and drip dry shirts become the look of Milan and London, Denmark, much less provincial Jutland, will not be fashion central. And yet this town is home to Bang and Olufsen, the maker of the hippest hifis and coolest TVs on the planet.

Stuer is the home of B&O. Of a population of 15,000, 2,500 loyal and devoted employees – many are 2nd and even 3rd generation staff – work at the company’s modernist, head office. Known as the Farm, but with an uncanny resemblance to a stack of one of B&O’s mid 60’s Beomasters, the name is, no doubt, an affectionate nod to the original rural buildings where, in 1925, Peter Bang and Sven Olufsen started it all.

That was then. Next month at the Frankfurt Motor show, Bang & Olufsen, will unveil its latest stage in it is cutting edge audio-visual journey, by unveiling the its in-car system for the Audi A8. It is the $600 million Danish company’s most ambitious partnership yet and the first time the brand has ventured into in-car entertainment (so insistent is B&O on getting it right, the company always felt cars were just too awful an environment for premium listening). The event will also reflect B&O’s evolution over the past ten years from a cool but quirky hi-fi producer to a global brand that has positioned itself among the world’s most luxurious and desirable retail names.

But it was never always thus. B&O’s current CEO, the affable Torben Ballegaard Sørensen, admits that there was a time in the mid-90s when the company had lost its competitive edge. “It was a difficult period,” he admits. “B&O was inefficient and lacking focus in the face of stiff Asian competition.” When he joined B&O from Lego in 2001, Sorensen’s response was to revitalize the product, open more stores and achieve greater consistency in its distribution network. In parallel, he accelerated development and creativity by focusing on the pleasure at home principal of faultless pictures and crystal clear sound. “This was very important to us. We were maintaining our niche but making more inroads into the consumer consciousness. We also wanted to expand our customer, maybe a attract a younger customer.”

According to Sørensen, B&O wants to consolidate domination of what it sees as the high end of the home entertainment market “We are a solution provider, offering quality experience allied to service excellence and reliability.” As opposed to? “Well the mass discount market,” counters Sørensen, “which is defined by transactions, logistics and the movement of bigger volume. We only release four products each year.”

Also close to Sørensen’s heart are the company’s core internal values of excellence, originality, synthesis and passion to produce products with a long life cycle and the potential to achieve iconic status.

“The B&O customer should be passionate about the fine things in life,” says Sørensen. “He should not compromise on quality or performance. He is willing to give priority to these values. He is in a professional or creative occupation and he should be active informed an international.”

To satisfy these needs, B&O have 1,500 outlets worldwide, of which 650 are what B&O calls concept stores, similar to that on the corner of Riad Solh and Rue Weygand in the BCD. Most recently concept shops have opened in Pakistan, India, Serbia, Kazakhstan, Uzbekistan and Finland, all of which represent what B&O call expansion markets.

Even though the company is a genuine niche brand (it has a 350,000 global customer base), in Denmark, according to Sørensen “B&O occupies a lot of mental pride”. It can claim a 25% share of the Danish market (albeit in terms of revenue, not units but this is still a lot when one considers that the next best performing markets are Holland and Switzerland with 8%, followed by the rest – UK, Germany et al – with around 2-3% of their respective markets).

And the Danes sure love their B&O. “It would not be an exaggeration to say that virtually every house in Denmark has or has had a B&O item,” beams, communications executive, Iza Mikkelsen (husband and father are also present and former B&O’s employees respectively). It quite a claim given that the entry-level units start at roughly $600 for and MP3 player, while the whole nine yards of home entertainment, in effect a mini cinema, can cost around $80,000.

In the day-to-day business of brand building, B&O has also realized the value of entering into more high profile strategic partnerships. There is ongoing R&D with both Microsoft and Samsung, while B&O’s advanced aluminum technology – it is acknowledged to be one the three most competent workers with the metal in the world – has found it working alongside Lamborghini (brake calipers) Hasselblad (camera housing) and BMW (the undersill on the X5).

B&O also works with Louis Vuitton (leather MP3 holders), Alessi and Porsche. “The world is more network oriented and we work with remarkable brands. They inspire us,” says Sørensen, adding that it is part of the company’s strategy to enter into more visible alliances with other genuine blue chip brands while maintaining B&O’s brand equity.

The alliance-building will reach a new zenith with the Audi partnership, one that will launch what is arguably the most sophisticated in-car audio system ever. It was a project that had its genesis in 2000 when the two companies began tentative talks on collaboration and was fuelled further with the launch of the A8 in 2003. Both companies are also proud to show off research data that demonstrates that Audi owners buy B&O, while B&O owners buy Audis.  vice versa. “It shows that we are two brands on the up with the same buyers,” beams Dirk Hogenfeld, adding that B&O had not, however, ruled out future collaboration with other car manufacturers.

B&O had never ventured into car audio before the Audi alliance. “The environment is all wrong,” explained Hogenfeld. “There are many factors the fabric in the upholstery can make a difference as can each individual model. With the A8, B&O spent years perfecting the revolutionary tweeter that emerges from the top of the dash board between the passenger and the driver and which acts as a acoustic lens spreading out sound as it should be heard. Audi expects to sell around 1500-200 models with the B&O option representing around 10% of all A8 sales, with the majority of customers coming from Germany, US, UK and China. 

But B&O is not just about sales and strategies and alliances. It is about the men and women who are devoted to achieving what they see as the cutting edge in delivering a quality product. Venture down the corridors of the farm and you will find them, legions of devoted nerds

Enter of these doors and you might find Ove Thomsen, head of B&O’s environmental test lab putting one of the revolutionary in-car tweeters through its paces. “Audi has requested that we raise it and lower it 25,000 to make sure the wires don’t crack,” he explains above the clunking. At that very moment the tweeter stops. Thomsen, B&O’s very own Q, restarts the machine muttering something about it being not completely perfected.

Thomsen has a unique job. His department at the Farm is called the torture chamber: Literally it is where he puts B&O products through extreme conditions so that build quality is kept to a maximum. Among his tools of his trade are the “wagon train,” the “bump test” and the ruthlessly effective “drop test,”

Owners of the breakthrough all-in-one remote control (especially those with children) will be happy to know that each unit must be able to withstand 100 drops from 80 centimeters onto concrete floor, while phones and earphones must endure a similar ordeal from 180cm.

If that were not enough, TVs are subjected to the smoking chamber where in ten days Thomsen simulates the effect of ten years smoking to see the effect of smoke on the fabric and to see if it has penetrated the TV. Products are also placed in temperatures of minus 25 and over 40 degree (trivia alert: in arctic climates customers are advised to wait 24 before plugging in their sets and turning them on as the cold can crack the screen). And then of course there are the everyday items that B&O claim can easily can find their way onto and into household appliances. “Nivea is great for hands but on other surfaces can act as paint stripper,” explains Thomsen, picking up a bottle of sweat. “Well its not real sweat but we made it so it has the correct acidity of sweat. Our surfaces must survive for ten years.” 

But above all B&O is about design and it is not surprising that in the country that gave the world Lego that the creative nerve center should go by the name of Idea Land. It is a department of 17 creatives “led” by the formidable David Lewis, B&O’s design meister for the past 25 years. Lewis is technically a freelancer, who works with a separate team of six assistants in his Copenhagen practice, but it is his B&O designs that are the most visible. Lewis makes the trip to Stuer once a weak where he meets with the idea land team and revels in the “big sky” that the part of Jutland offers.

Working closely with Lewis, the design team have one overriding criteria when designing a concept that will be presented to the B&O management. “It’s got to have ‘wow’ factor even if other people hate it, wow is what we aim for you cant please everyone,” says Robert NargBurg, one of the concept designers, adding that the team does not only get their inspiration from their own northern European aesthetic but rather they marry it with influences harvested from all over the world. “We go everywhere from Hollywood to Tokyo, to film studios and car shows. We talk to people. We are after all in the entertainment business.” What about the customer? “We don’t do market research, because we believe the customer doesn’t know what he wants.”

What of the future? David Lewis, the design guru, rubs his beard. “I suppose when we don’t have CDs we might have a problem as all the mechanics will be gone. But we are not there yet,” he chuckles.

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