Braun Ag: The Kf40 Coffee Machine

In 1921 Max Braun founded and began the Braun AG company. It was a radio and small appliance family owned business. In 1951 his sons Artur and Erwin Braun took over the business after their father’s death. Three years later the Braun brothers hired their friend Fritz Eichler to help them find a new approach to their struggling business. Together with Fritz Eichler they accomplished to change the direction of the company and build a distinctive style. In 1955, Dieter Rams joined the company and changed the values of Braun. Since he joined along with Fritz Eichler’s efforts, superior design became the essential goal to Braun’s business culture. Braun’s products had to have the following three characteristics:

1. First class design

2. Superior quality

3. Functions and features ahead of the competition

Gillette, a company known for their razor, blades and toiletry products bought the Braun Company in 1967 and in 1980 appointed a new chairman, Lorne Waxlax. This acquisition gave Braun the opportunity to compete with the multinationals. Lorne Waxlax implemented a new strategy that fit in the lines of Braun’s business culture of “superior design”. His strategy was to:

1. Narrowing down Braun’s product line and get out of the camera’s and hi-fi market.

2. Expanding Braun’s horizon to a bigger market share.

3. Focus more on its core technologies in personal care and appliance market such as:

a. Coffeemakers

b. Irons

c. Toasters

d. Hairdryers

e. Shavers

f. Food preparation products

Management’s key challenge was to balance three dimensions of the company; technology, design and business management while maintaining their corporate value.

In 1983, Braun was discussing their new coffee machine design the KF40. The KF40 was the next version of the KF20 and KF35 coffeemakers. The goal of the new version of the coffeemaker was to cost less than KF20 and KF35. The KF20 at an award winning design and was expensive while the KF35 was cheaper but the design didn’t meet Braun’s standards. The main reason for the new design was customer requirements which predict if the products would be sold. Braun needed to meet cost targets set by management for this new design in order to be profitable.

The issue Braun has to face in meeting these targets was deciding between using a low cost polypropylene plastic or a more expensive and better quality polycarbonate plastic. Polycarbonate was the material traditionally used which was a better quality, thick and stable material that could be molded