The Kalle Hvidt Nielsen Interview - November 13th 2008
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Hello, and thank you for sparing me some time in your busy schedule! Hopefully i can ask you some questions about your appointment, your expectations, realities and visions!
Yes, certainly - go ahead!
Are you happy with the way things have started for you at Bang & Olufsen, and have you had anything happen that you didn't foresee or expect in your new position?
Well, it would probably be no surprise to you, but it's a fantastic experience to join a company like this. When i joined the company, of course i knew it was a strong brand that many people felt a lot about. In my old job, i used to travel a lot and made a lot of friends, especially in the US and Asia - and when it was announced that i had got the job i had a huge amount of phone calls from them wishing me well and saying 'take good care of this company' !!
When you were approached about the job, were you completely aware about where the brand was? By this i mean a brand that has sales in decline not only due to a worldwide economic slowdown, but a brand that has released some pretty poor products recently and almost continuously disappointed - notably with Torben's 'shiny things' like the Samsung dual branded products. They feel that B&O have really under-delivered, and now have to over-deliver to compensate. What are your thoughts on this?
Well, i understand what you are saying - and yes, although there is a worldwide economic downturn we still have to improve on our technologies. That also happens to be where i spend most of my time as my background is in this. The company i came from had elements that were strongly focused on acoustics with some leading professors - and we sometimes worked with Bang & Olufsen on these.
As for the products at Bang & Olufsen, it is my focus not to totally redevelop or 'start from a clean sheet of paper' with everything. Whilst this approach may be more 'interesting' from a product perspective, it also costs a great deal of money. Although we have some very strong platforms already which we can start from the best of - i would like to gradually migrate these to the one technology platform - which, by the way, will be 99% software. Hardware is going to be commoditised, if it's not already.
Eventually, things will move over to the internet more and more - so of course will be network enabled, and by having this approach we will be able to identify areas that are critical and can improve via updates.
So, are you thinking then of 'streamlining' a little more and actually having less products in the range?
Audio, Speakers and TV - this is what i see as the future of Bang & Olufsen. I see Home Integration as something we can really excel at too, and in our future product strategies we will aim to make even better solutions than those available.
When you talk about streamlining, i think the power of having this one software platform is that you can get the full flexibility, and of course if we want to, we can take the audio product into the TV in the higher end TV's and perhaps disable this feature in the low end or 'entry level' TV's.
This is an old question, but although you say you don't have a 'target group' - there were normal people who have normal jobs that were happy to save for 3 months, 6 months or a year just to buy a B&O product. Now the price levels B&O are at, it would take that person sy 5 years to save for this. Do you have more plans to release lots more 'entry level' products to make the brand more accessable? Porsche did it with the Boxster, BMW did it with the 1 Series to name a couple - what are your thoughts?
In my view, there is no problem with entry level products - but we must be mindful to keep our distance from the more commoditised products. Bang & Olufsen will always be sitting on the top end of the 'triangle' - and whilst there should be nobody sitting above us or beside us (as in the triangle format), we should also ensure that we can cover the rest of the triangle. We should also need to maybe look at our pricing - but by this i do not mean lowering the prices of our existing products, but rather making the products match the price.
One thing that BeoWorld members have issues with is the speed of getting what is a great concept to market. You seem to identify a niche or technology 6 months before everyone else, take too long to develop it, then release it 6 months after everyone else. This leads to comments like 'nice product, but.. 6 months too late..". Are you going to do anything about this?
Obviously, not only in time to market but investment required - we need to do more and met the deadlines. This has been a problem for us, and i revert back to my statement about not redeveloping things as much - but building on the things you have.
So are you looking to follow the 'Porsche 911' model of building on the same platform but just keeping with continuous improvement then?
Well to some extent we are, and of you look at that TV there (points to BV7) you will see that we added DVB-T, HD and other technologies since release, this gives an idea of our realisation that when customers make a B&O purchase they make an investment. If we can add these technologies to that investment as time progresses, this will help them realise that expectation that the product can 'last' throughout their period of ownership. I realise that these classic designs have a long lifespan and am very aware that we need to keep them alive throughout that time with regards to technology.
Referring back to my previous comment about having just the one technology platfrom, it would make this upgrade path much easier for current owners. Our efforts then could be much better spent diverting resources to upgrading products and creating new designs rather than creating completely new technologies.
So could B&O still make a profit if people were deciding to upgrade rather than replace - or do you think people would naturally get bored of the same 'shell' and upgrade to a new model/product anyway after say 5-7 years?
This is a true story, and i would have told you this 1, 2 or 5 years ago before i joined B&O. Almost 20 years ago, i bought a brand new BeoCenter 8500.. It was expensive - i had just graduated from university and it cost me a fortune, about 3 months salary. It is still in my home, and you know - these 20 years i have had it, i have enjoyed it every day. Imagine if i had bought back then a 'plastic' Sanyo or JVC system? I would have thrown out 5 of these since and spent the same amount of money but not had the same pleasure. Not only do my friends and family appreciate it is Bang & Olufsen, but it indicates my way of thinking that i am not part of the 'throw away culture'.
I think that should be our culture, and i will be happy to help our customers do just that. I don't think we should be looking to make money from our customers on upgrades, and of course we will come to a point where we can offer them a trade on their current product against a totally new product.
So with the 'new platform' this could be much easier to upgrade existing products?
Obviously for hardware changes this is impossible, but for new software and program platforms - this can be done over the internet. This gives us a very easy, cheap and fast way to keep products totally up to date. There are so many possibilities, and with less 'dedicated' buttons on products, our designers and engineers can really get their teeth into making our product software future proof.
Finally - how aware of you of BeoWorld, and how do you view the site?
Well, i don't know if you are aware - but at the dealer meeting this year in Cannes, we brought up a big image of a BeoWorld thread on a huge screen to show to dealers to hopefully send a clear signal that times are changing. We wanted to signal to dealers that maybe we have been a little arrogant in our attitude and want to listen to people rather than neglect feedback we have been given. This is very important for our future!
Well, thank you for your kind words! We all wish you the very best at BeoWorld and look forward to the future with great excitement and anticipation!
You are most welcome, thank you.
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