How Hasselblad, an iconic Swedish brand, is endeavoring to recreate itself by remaining niche
To document that one-small-step-for-man-one-giant-leap-for-mankind moment in 1969, Neil Armstrong took a photo of his fellow astronaut Buzz Aldrin with the Hasselblad 500EL/70 camera. Everything about the legendary photo during the Apollo 11 mission is a milestone of epic proportions – Aldrin, the footstep marks, the moonscape, and the eerie darkness in the background. The first man on the moon, however, is merely reflected in Aldrin’s visor, and the black Hasselblad camera has gone down in history for delivering photos that are out of his world.
Even way back in the 1960s, a Hasselblad could outperform other medium-format cameras since it had three to four times the surface of a 35 mm frame. The result: unmatched photo resolution and sharp colors. US’s National Aeronautics and Space Administration (NASA) would have nothing but the best, and the Hasselblad-NASA collaboration started even earlier, in 1962, when earth’s first pictures were taken from space during the Mercury-Atlas 5 mission.
But that’s not the reason Prof Ken Kwong-Kay Wong of Toronto-based Seneca College, decided to write a case study on the Swedish camera manufacturer, although the company’s history is fascinating. It is also a perfect example of brands inventing and reinventing themselves to survive and beat competition, and has a reputation for making the world’s best high-end medium-format cameras when it comes to professional photography. Wong uses the 2016-case study on Hasselblad as a starting point to discuss market segmentation. “Students, especially in undergraduate studies, are eager to understand why certain products are priced high.” Why, for instance, are people on this planet willing to buy a camera for $30,000 when even an iPhone takes decent pictures today?
What’s even more interesting is that this is happening at a time when more and more high-end luxury products are looking at increasing sales by introducing affordable variants, and are rethinking their distribution channel strategies. Wong talks about the luxury watch sector as a case in point and says the segment has suffered in the past due to the currency exchange rates not favoring the Swiss franc. Moreover, one of its biggest markets, China, has put in place anti-corruption laws and bribes in the form of luxury products have become rare. Thus, Tudor, a sub-brand of Rolex, has returned to the US with new, affordable models. Tudor has also expanded sales channel successfully in key international markets. “Having said that, however, it is also true that some high-end brands and their models will not be affected by economic conditions and will continue to grow since their target market is really niche and small,” he says.
Hasselblad didn’t always cater to the high-end market, however. Hasselblad Fotografiska AB, the photographic division of parent trading company F W Hasselblad & Co, was formed in 1908 by Arvid Viktor Hasselblad, who made the company an exclusive distributor of Eastman Kodak products. His great grandson, Victor, shared his passion for photography and in 1940, was asked by the Swedish government to reverse engineer a German aerial camera it had captured during WWII, and thus was born the HK7, a seven-by-nine cm, 80 mm film camera. Victor spearheaded the company’s foray into consumer cameras; the iconic 1000F, 500C, 500EL, SWA, and SWC models became known throughout the western world.
With changing times came both challenges and opportunities. Through the years, the company has also changed many hands – from Safvean AB, Incentive AB, CINVen, the Shriro Group, and Ventizz, which is now known as Vorndran Mannheims Capital. During the past decades, the company allied with other camera manufacturers such as Fuji and Sony to launch more products. It also tried to keep up with the times and ventured into digital imaging in the mid-1980s, and introduced its first digital camera, DB4000, in 1995. But it shut down the digital imaging division in the late 1990s, when the company board decided it didn’t have enough capital to invest in the new technology, and that the professional photography market – the company’s target market — would not be impacted.
It was with Sony that Hasselblad considered cameras for the luxury market and in 2012, it opened its design center in Treviso, Italy, “to gain market share in new consumer segments with products that boost exceptional design and engineering”. A number of high-end, luxury cameras were launched in 2013, and were noticed for their style, craftsmanship and state-of-the-art technology. These failed to excite the market, however, and drew flak from Hasselblad’s target audience – professional photographers.
And this is the phase that Wong wants to highlight more than others, in the case study. He explains: “I ask my students what their reaction would be if they hire a professional photographer for a wedding and he whips out an iPhone to capture the moments!” On the other hand, if that person carries a Hasselblad and asks the posers to smile, he will be naturally perceived as a professional, and a talented one at that, feels Wong. “Finding the right customers and correct product positioning means you have a good reason to charge a premium,” he says. The ground reality though is that the medium format market isn’t as big as it used to be, and with innumerable digital cameras available for professional photography, Hasselblad’s revenues were taking a beating. How could the company stay true to its values and USP while also becoming more accessible?
Wong became interested in the company through Perry Oosting, a luxury industry veteran who had been associated with brands such as Bulgari, Prada, Gucci and Vertu in the past, and had taken over as the company CEO in 2015. When Wong expressed his interest in looking at a case study on Hasselblad, Oosting readily agreed to help and patiently answered 40 questions Wong had sent him.
Wong’s case study shows Hasselblad as being bullish on Oosting’s strategy of reaching a wider audience while also staying true to its core values of excellence, artistry and authenticity. Oosting’s long-term strategy was to not only focus on the professional photography market, but also to cater to “prosumer” (semi-professional consumers) and consumers in the long run. All this required capital, though. In 2015, Shenzen-based DJI, a global market leader in aerial camera photography, acquired a minority stake in Hasselblad. With the deal came the funds Oosting needed to realize his three-year business plan, called Masterplan 2018.
Wong says the study makes for interesting discussions with students, especially when it comes to analyzing the company’s future. “DJI is a big company with a strong technological background,” he says, sharing how his students wondered why DJI wasn’t looking at taking control of design and technology as well, considering Hasselblad is so much smaller. “That is actually happening. After the case study was published, DJI moved various business functions to China,” says Wong. Oosting was let go and at present, most company decisions are taken out of China. That doesn’t mean Hasselblad’s Sweden connection will be over, though. After all, the company’s rich past and Swedish heritage make a significant part of the brand value. “DJI is smart. It will continue to hold the building in Sweden and carry out preliminary research and design from there, but some work will be shifted to China to leverage DJI’s expertise.”
Hasselblad: A new chapter for the Swedish camera manufacturer Reference no 9B16A017
Professor Ken Kwong-Kay Wong
Profile: Professor Ken Kwong-Kay Wong: http://casium.net/prof-dr-ken-kwong-kay-wong-seneca-college/