Bryant Loy IBA 550 Final Project

Bryant Loy, IBA 550 Final Project
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Bunn’s Expansion into the Netherlands
Table of Contents
I. Introduction
II. History and Overview of BUNN
III. Overview of the Netherlands and Comparison of U.S. and Dutch Culture
a. Demographic and Economic Analysis of the Netherlands
b. Cultural Analysis of the United States
c. Cultural Analysis of the Netherlands
i. Business Etiquette in the Netherlands
d. Cultural Comparison of the United States and the Netherlands
IV. BUNN’s Opportunity in the Netherlands
a. Potential Benefits of Entering the Netherlands
b. Potential Challenges of Entering the Netherlands
V. Proposed Strategy
VI. Conclusion

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I. Introduction
The Bunn-O-Matic Corporation (also known as BUNN) should expand its operations by
opening a manufacturing plant in the Netherlands. The plant should focus primarily on producing
the top notch coffee and espresso making machines that they are famous for in the United States.
If BUNN were able to successfully integrate a manufacturing plant in the Netherlands, there
would be potential for great success due to the large consumption of coffee in the country. There
would also be ample potential for the corporation to expand its products throughout the rest of
Europe and the world, due to the Netherlands’ status as a large hub for international trade.
II. History and Overview of BUNN1
BUNN company was created in the mid 1950’s by George R. Bunn, a grocery store
owner in Springfield, Illinois. By 1963, the corporation had officially incorporated itself as a
separate entity from Mr. Bunn’s grocery store. The corporation developed a product that allowed
for the creation of Office Coffee Service, where customers could brew a simple, quality cup of
coffee themselves for the first time. By the late 1960’s, the corporation expanded with the
establishment of a division of the company in Canada. The 1970’s were filled with further
expansion across the United States for the company, as well as development of a commercial
quality coffee machine for home use and the first commercial tea brewer to serve tea brewed
from actual tea leaves, rather than from instant mix. In the time since, the company has
continued to be a pioneer in not only the coffee and tea industry, but has also been largely
1
Information from this section was pulled from two separate pages on the BUNN company’s website
http://www.bunn.com/company/about-us and http://www.bunn.com/why-bunn/innovation (2015). (BUNN
Corporation, 2015)

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involved in frozen beverage machine patents and sales, as well as juicing machine patents.
BUNN is a privately owned corporation that does not disclose its sales information, but the
company does have facilities located in six United States locations, as well as Canada, Mexico,
Brazil, Germany, China, UAE, and the United Kingdom. There are no available estimates for
annual revenue anywhere to be found on the corporation’s website, nor anywhere online, since
they are privately held, and not required to report their numbers publicly through a 10-K or 10-Q
form.
The corporation has kept a central location in Springfield since this time, and “every
equipment model is designed and/or tested by BUNN professionals in (their) Springfield, Illinois
headquarters.” The company’s largest competitive advantage has long been its line of
commercial coffee and tea brewing products that can be found in offices, gas stations, banks, and
just about any other commercial setting imaginable. The corporation also utilizes supplier
diversity as a competitive advantage. The corporation requires potential partners to complete and
submit a form to become a strategic partner, ensuring they work with corporations that fit their
business strategy. Expansion to the Netherlands could provide a great boost for a corporation
that’s been thriving with it’s top of the line coffee machines for over 50 years.
III. Overview of the Netherlands and Comparison of U.S. and Dutch Culture
a. Demographic and Economic Analysis of the Netherlands 2
The Netherlands has a population of just under 17 million, and the country ranks 17th
in
the world in current Gross Domestic Product (GDP) value and domestic credit to the private
sector (ease of obtaining financing for private corporations) as of 2014 (The World Bank, 2015).
2
Data from this section was found using indicators on The World Bank’s website data.worldbank.org/indicator
(2015). (The World Bank, 2015)

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The country ranks ninth in the world in Gross National Income (GNI) per capita as of 2014, the
most recent completed period for measure. The country ranked 16th
in trade % of GDP in 2014,
and 28th
in “ease of doing business” in 2015. The unemployment rate in the Netherlands is 6.7%,
and they rank fifth in the percentage of the population that enrolls in secondary school. Life
expectancy in the Netherlands is 81, which also ranks in the top 20 in the world. These statistics
indicate that the Netherlands would be a nice fit for a foreign company looking set up a branch or
factory in the country.
b. Cultural Analysis of the United States3
The United States has a culture that scores very high in individualism, and fairly highly in
masculinity and indulgence overall, according to data compiled by Geert Hofstede, as seen in
Figure 1, (The Hofstede Group, 2015). These high scores indicate that the United States place
very high emphasis on worrying about taking care of themselves and their families, rather than
worrying about taking care of a specific group. The research also points to a strong culture of
competition, and trying to be the best in the United States, and a “work hard, play hard” attitude.
The very low scores from Hofstede in long term orientation suggests that businesses within the
country tend to focus much more on short term results and goals than long term goals. The
United States typically leans toward a belief of mastery rather than subjugation or harmony,
believing that nearly anything can be achieved with proper resources and time devoted to
achieving it, and shows a preference toward a strong hierarchy, according to Lane and
Masnevski (pp. 50, 56) (Maznevski, 2014).
3
Data from sections b, c, and d was found using the website for The Hofstede Center, www.geert-hofstede.com
(2015) (The Hofstede Group, 2015) and International Management Behavior by Lane and Maznevski (Maznevski,
2014)

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c. Cultural Analysis of the Netherlands
The Netherlands place very high value on individualism, and fairly high value on long
term orientation and indulgence, according to data compiled by Geert Hofstede, as seen in Figure
1, (The Hofstede Group, 2015). These high scores indicate that the Netherlands place very high
emphasis on worrying about taking care of themselves and their families, rather than worrying
about taking care of a specific group. The high value placed on long term orientation indicates
that it is important to Dutch workers to focus not on just achieving short term goals, but looking
to the larger, long term picture as well. The fairly high indulgence score indicates that the Dute
like to have a nice work/life balance in order to be able to indulge in things they enjoy as well.
The low masculinity score points to a high value placed by the country on achieving a favorable
work/life balance and on caring for others. This also suggests that the typical worker in the
Netherlands works in a position that he or she enjoys. The Netherlands typically leans toward a
belief of mastery rather than subjugation or harmony, believing that nearly anything can be
achieved with proper resources and time devoted to achieving it, and shows a quite strong
preference toward a strong hierarchy, according to Lane and Masnevski (pp. 50, 56) (Maznevski,
2014).
i. Business Etiquette in the Netherlands4
In Dutch culture, punctuality and timekeeping are of the utmost importance. Often times
a timekeeper will be assigned during meetings to ensure the meeting moves as planned, and does
4
Information in this section was pulled from http://businessculture.org/western-europe/business-culture-in-
netherlands/business-etiquette-in-netherlands/ and (Bedford, 2010)

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not get too far off topic. Gifts are not necessarily expected, however in Dutch culture, it is
expected that a gift be opened immediately and thanks given to the gift giver. If invited into
somebody’s home, it is appropriate to bring a housewarming gift such as a houseplant, flowers,
or wine. The Dutch culture is to allow everyone to have his or her share, and typically try not to
dismiss any idea immediately. Most negotiations are a lengthy process, and the Dutch expect
concrete facts rather than subjectivity, and prefer a direct approach rather than evasiveness
(Business Etiquette, 2014). According to the Lonely Planet, coffee breaks are “a national
institution and occur frequently throughout the day” in the Netherlands (p. 64) (Bedford, 2010).
d. Cultural Comparison of the United States and the Netherlands
Culturally, the United States and the Netherlands are quite similar, as evidenced in Figure
1 and the analysis in the sections above. The largest differences between the two countries are a
much higher culture of masculinity in the United States and a much higher propensity by the
Netherlands to be concerned with long term orientation. In the Netherlands, the very low
masculinity score indicates that the country’s culture as a whole is to be more concerned with
enjoying what they choose for a career than worrying about competition and success vs. a
predetermined measure. The much higher long term orientation score indicates that the
Netherlands are much more concerned with looking to the future than the United States, where
the focus is typically on achieving short term goals and striving for quick results rather than
longer term goals. Overall, the cultures are similar enough to imagine an easy transition if a
company looking to expand did proper research.

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Figure 1
Figure 2

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IV. BUNN’s Opportunity in the Netherlands
a. Potential Benefits of Entering the Netherlands5
Coffee is important to the Dutch, as the Netherlands rank highest in the world in the
number of cups of coffee consumed per day per capita (Ferdman, 2014). It is the only country in
the world where the average adult consumes over two cups of coffee per day (Figure 2). Dutch
consumers primarily drink cheap, bulk coffee called “Roodmerk”, but the market for higher
quality coffee, including whole beans rather than pre-ground coffee (p.12) (CBI Ministry of
Foreign Affairs, 2015). Home and office espresso coffee machines are becoming increasingly
popular in the Netherlands, a market in which BUNN has a great line of products. There is also
an increasing market for single serve or pre-packaged coffee with pods or packets in the
Netherlands, which is another market in which BUNN has a large range of products. Finally, the
Dutch are increasingly demanding transparency in knowing what the local impact of their
products are. While direct trade is one way to achieve transparency, if BUNN were able to build
a factory that produced their high quality machines within the Netherlands, the transparency and
perception of the company would potentially be even greater. In the Netherlands, nearly 70% of
the coffee consumed is consumed in the home, and from supermarket bought coffees. The coffee
market in the Netherlands is one that has very high potential for a company who has the
resources and technology to build and expand within the country.
5
Information and data from the CBI Netherlands fact sheet (full citation in works cited) was used for this section.
(CBI Ministry of Foreign Affairs, 2015)

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b. Potential Challenges of Entering the Netherlands6
The Netherlands is a country with a large demand for coffee, which has led to some
domestic corporations that have a large stake in the market. Technivorm is a large manufacturer
based in the Netherlands with a centrally located facility that produces consumer and commercial
coffee makers that are shipped to customers all over the world (Technivorm, 2015) . The
Netherlands are a nation that is very concerned with and very conscious of their environmental
footprint. According to the Environmental Performance Index compiled by Yale University, the
Netherlands has an overall rank of 11 out of 178 nations measured in overall EPI score (Yale
University, 2014). Technivorm operates using only recyclable or fully degradable materials,
which allows them to have a favorable standing within the country. If BUNN were to consider
entering the Netherlands, they would need to be cognizant and understanding that whatever they
were building would be expected to be environmentally friendly, which may end up increasing
the costs of entering the country. They would also need to understand that they would be
entering a market to compete against a company that has a head start both in terms of being
recognizable and owning consumers’ trust.
V. Proposed Strategy for Entering the Netherlands7
As we have discussed throughout the paper, the Netherlands are a nation that values
indulgence very highly, and very much enjoys indulging drinking coffee. In order for BUNN to
break into the market, they will need to have a solid entry strategy. BUNN corporation has four
6
Information in this section was taken from the Technivorm website in the About Us section (Technivorm, 2015)
and Yale’s EPI website found at http://epi.yale.edu/epi/country-profile/netherlands (Yale University, 2014).
7
Information in this section was obtained from BUNN’s website (BUNN Corporation, 2015) and Export.gov, an
official site of the U.S. Government (Netherlands - Market Entry Strategy, 2015)

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brand pillars: Exceptional Experience for (their) Customers, Best Results in the Cup, Great
Design, and Highest Quality Equipment (BUNN Corporation, 2015). The company would need
to ensure all of these pillars were met in any facility they chose to build in the Netherlands in
order to keep true to their company values. The corporation also takes part in the Respect
Earth® initiative. In opening a plant in the Netherlands, it will be important to educate the
consumers on the value that the BUNN corporation places on ensuring they are a green
company.
BUNN should understand Dutch culture prior to building a plant in the Netherlands. In
addition to all of the information discussed to this point, BUNN should familiarize themselves
with the coffee industry in the Netherlands very well. The U.S. Embassy notes that a “vigorous
and sustained promotion is often needed to launch products (in the Netherlands) because buying
habits are generally strong” (Netherlands - Market Entry Strategy, 2015). Knowing this, BUNN
should conduct extensive market research through a variety of methods to determine if
consumers would be open to learning and using new coffee making products. They should use
surveys, questionnaires, interviews, and any other method that can help them determine the
general attitude of a new corporation entering their market. If the results were favorable, they
would know that they had a chance for great success in the Netherlands, and would be able to
proceed with moving forward on opening a plant in the country. If the research determined that
there was not a favorable view of the corporation, or that coffee consumers in the Netherlands
were not willing to try new products, it would be hard to justify building a large plant in the
country.
After gathering an understanding of Dutch culture and consumers’ attitudes toward a
potential new competitor in the market, BUNN would need to determine how they planned on

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entering the market. I believe the first steps would be to use production from the German office
of BUNN to increase exports of BUNN coffee machines to the Netherlands as a trial run to
determine the receptiveness to the new products. I would give this at least 1-2 years to determine
the success of the strategy, as the Dutch are not always quick to change their minds, and may not
be incredibly quick to accept the new product. If results show any promise, BUNN should open a
plant in the Netherlands. It would be important for BUNN to recruit highly skilled Dutch
workers to partner with corporate employees from the United States to open the plant initially.
Since the cultures are fairly similar, it should not be an incredibly difficult transition. In
Dutch culture, friendship and mutual trust are highly valued, so it would be very important that
the workers from the corporate office in Springfield maintained a close relationship with the top
Dutch executives to ensure they felt appreciated and happy in their roles (Netherlands - Market
Entry Strategy, 2015). The Dutch businessmen should be able to teach the corporate executives
about the market in the Netherlands quickly, as the Dutch are typically not keen on wasting time,
and are known to speak their minds when they have information that they feel is pertinent. The
timeline would be 1-2 years of testing the market through intensive research, followed by
however long it took the company to build a quality, environmentally aware production plant.
Once the plant is built, the company will need to spend a couple of years with corporate
employees from Springfield working very closely with highly skilled Dutch businessmen. At that
point, BUNN should be firmly in the Dutch coffee machine market, where their products would
be highly recognizable by Dutch coffee drinkers. The company would need to continue to ensure
that they were adapting to not only the coffee market, but the country’s business culture as well.
Assuming all of this was true, BUNN should begin research to determine consumer attitudes and
viability very shortly.

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VI. Conclusion
As long as the company continues to engineer high quality coffee and espresso machines,
and continues to adapt with the market for these machines, they should be able to have a very
strong presence in the Netherlands. By the year 2020, BUNN should have its plant built, and
should be able to compete in the Dutch coffee and espresso machine market. The Netherlands
provide a strong economic environment, people willing to indulge in things they enjoy, and a
country full of individuals who very much enjoy coffee. The company has a huge opportunity
available, and should explore the possibilities by starting to conduct market research and perform
market analysis in the near future.

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Works Cited
Bedford, N. a. (2010). The Netherlands. Lonely Planet Publications Pty Ltd.
BUNN Corporation. (2015, December 3). About Us: BUNN Corporation. Retrieved from BUNN Corporation
Web Site: http://www.bunn.com/company/about-us
Business Etiquette. (2014). Retrieved from Passport to Trade: http://businessculture.org/western-
europe/business-culture-in-netherlands/business-etiquette-in-netherlands/
CBI Ministry of Foreign Affairs. (2015, April 11). Exporting coffee to the Netherlands. Retrieved from CBI
Ministry of Foreign Affairs: https://www.cbi.eu/sites/default/files/product-factsheet-coffee-
nederlands-2014.pdf
Ferdman, R. A. (2014, January 15). Here Are the Countries That Drink the Most Coffee—the U.S. Isn't in the
Top 10. Retrieved from The Atlantic: http://www.theatlantic.com/business/archive/2014/01/here-
are-the-countries-that-drink-the-most-coffee-the-us-isnt-in-the-top-10/283100/
Maznevski, M. L. (2014). Understanding Culture: Through the Looking Glass. In M. L. Maznevski, International
Management Behavior - Global and Sustainable Leadership - Seventh Edition (p. 290). West Sussex:
John Wiley & Sons, Ltd.
Netherlands - Market Entry Strategy. (2015, 10 4). Retrieved from Export.gov:
http://apps.export.gov/article?id=Netherlands-Market-Entry-Strategy
Technivorm. (2015, December 4). Company (About Us). Retrieved from Technivorm company website:
http://www.technivorm.com/about_us/
The Hofstede Group. (2015, December 4). The Hofstede Group - Country Comparison. Retrieved from The
Hofstede Group Website: http://geert-hofstede.com/united-states.html
The World Bank. (2015, December 4). GDP (Current US$). Retrieved from The World Bank:
http://data.worldbank.org/indicator
Yale University. (2014). Environmental Performance Index. Retrieved from http://epi.yale.edu/epi/country-
profile/netherlands

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