a vibrant and culturally rich country & historically a great trading nation
It is often overlooked that Holland, a relatively small country, is one of the leading food producers and exporters. It has long been associated with tulips – and bicycles, canals, wooden shoes, great museums, and windmills, and a highly educated people. and global commerce.
Amsterdam is bike friendly. It is a sea of spokes, handle bars, bike saddles, woven baskets, and bell ringing riders. Adding to the adventure, the cobbled streets are criss-crossed with tram tracks [and trams] – which all help to identify the locals from the tourists. Bicycles are just part of a normal day in Amsterdam – well-dressed people just running their errands – going to market – going to work. Strangely no one wears a helmet. It is all very civilised – no lycra, no yelling about personal best times, no playing tour de france.
Dutch East India Company – Vereenigde Oostindische Compagnie [VOC]
The Dutch have long been traders – The VOC was founded in 1602 bringing together several competing Dutch trading companies with the objective of achieving economies of scale, a competitive market advantage, and reducing risk. For 200 years the VOC was a conglomerate that dominated trade and was recognised as an exemplar of business practice; it was a Dutch government-private enterprise joint venture, crowdfunded through shares and the first publicly listed company, a brand innovator, a vertically integrated diverse organisation, an international employer, and a business process innovator. On the other hand the VOC earned a reputation for monopolistic behaviour, exploitation, cruelty and slavery.
As a vertically integrated organisation, VOC was a shipbuilder and consumed much of Dutch timber before importing timber from all over Europe. Trade was profitable and although the ships had a limited life [5-6 years] one voyage could pay for the construction of the ship. Trade was in spices, sugarcane, wine, cloth, and building materials. Spices were particularly in demand as perishability of food has long been an issue and spices enabled people to eat food that was past its prime [keeping in mind that refrigeration was not invented till 1902 and adopted much later].
Whilst trade was its primary purpose it was also an exploration company, environmental surveyors, and mapped much of Australia. Up to this point, ocean navigation was undertaken by hugging the coastline, this meant that the ships followed the coast. However, after a blockade by the Spanish [market rivals] the Dutch ships left the coast of South Africa and harnessed the roaring forties and sailed easterly across the Indian Ocean before heading north to reach India. Although, this increased the risk, going offshore cut 3 months off the voyage and increased the profitability of the VOC, furthermore, this route advanced ocean navigation techniques.
Given this new route the Western Australian coast was of interest to the Dutch and they were keen to develop a port to enhance trade, however, after a journey by de Vlamingh the VOC board voted that from a trade perspective a settlement was premature. With this increase in risk a number of ship disasters occurred, possibly the best documented is the Batavia, at the time one of the largest ships in the world and on her maiden voyage. The shipwreck of the Batavia was discovered in 1963 and a systematic marine archaeological exploration of the ship, cargo, and gravesites followed; the net result was a better understanding of trade and the VOC. However, it does challenge the traditional Eastern-Australian view of Australian history as the Hartog plate of 1616 and de Vlamingh plate of 1697 reveal.
Tulipmania in17th century Holland
We can learn a lot from tulips, for one thing how cultivating and nurturing quality can help craft an organisational culture, how aesthetic quality creates awareness, interest, and desire; but also, how to avoid acting irrationally. Let me explain.
Tulips were first introduced to Holland from Vienna, although they originated in Turkey. This introduction occurred during a time of great prosperity – the Dutch were the economic masters of the 17th century. Initially, the tulips were scarce and became a luxury status symbol. Demand was high and plant breeders produced a variety of cultivars.
At the time, the Dutch introduced new mechanisms for investing. People began to speculate on tulip bulbs, which other than their aesthetic qualities have little value1,2, or 3. This speculation is often referred to as ‘Tulipmania’ and the prices soared with increased interest. Clearly, people had investment FOMO. People sold their possessions and speculated, people became wealthy. Then, in an investment lesson that should never be forgotten, the prices dropped and many fortunes evaporated.
We can see the foolishness in this behaviour. And I guess prices rose until all the foolish people had invested – often described as ‘greater fool theory’.
the world’s largest flower market
What is possibly less known is that Holland is a world leader in Floriculture [and as a manufacturer of floriculture equipment]. Therefore it should come as no surprise that the world’s largest flower market, FloraHolland, is located in Almsmeer, near Amsterdam. Often described as a ‘Wall Street for flowers’, however, the auction rooms at FloraHolland are calm and orderly – a typical Dutch trait.
music > Time to run, Dexter Britain, Creative Commons; available at www.dexterbritain.com
Floraholland is massive operation, located in one of the world’s largest buildings, is like watching a well choreographed logistical dance – where flowers arrive are auctioned, picked, and despatched. According to the 2016 annual report turnover was $6.8b [AUD] for 2016.
Flowers are a highly perishable product, therefore, efficiency is required. FloraHolland, Aalsmeer, is strategically located near Schipol airport [Amsterdam’s International Airport], this enables suppliers to air freight their flowers to the Floraholland and for FloraHolland to air freight orders to retailers with the minimum delay. Flowers are exported to Germany, United Kingdom, France, Italy, Belgium, Switzerland Sweden, Poland, Russia, Austria [Top 10 in order].
Not all the flowers require air freight as many of the flowers are grown and then sold in Holland and in neighbouring European countries. Nevertheless, this means that trucks with assembled orders of flowers are continuously transporting flowers to wholesalers, retailers, and florists.
- Search the Dutch East India company and identify what were the competitive forces they had to overcome.
- Given the enormous wealth that was created by the VOC and how many of the buildings of Amsterdam are from this era – would it be correct to say that from a tourism perspective Holland is still profiting from this era?
- Given the events of Tulipmania – is it possible for a similar event to happen again – or have there been other speculative events?
- It is often stated that an organisation’s strategic strength may become their strategic weaknesses. Given this statement identify FloraHolland’s strategic strengths and how these could become possible long-term challenges [think technology].