1. Growth strategies introduction
1.1 The Growth Strategies Matrix
1.2 Diversification
- Related
- Unrelated
1.3 Vertical Integration
- Backward vertical integration
- Forward vertical integration
1.4 Outsourcing
2. Denmark Export Canon
 Locomotives (Arla Food, Carslberg, ISS, Novo Nordisk, DSV)
 The Niche Champions
 The Merchants
 The Green Front Runners
 The Welfare Exporters
 The Super Designers
 The Chameleons
 The Born Globals
3. Project – DLG Group Locomotive
When a company decides to enter into new market or the development of new products, it should
considered the different types of corporate strategy directions that the management can follow:
Growth strategies matrix:
 MARKET PENETRATION: to introduce existing products into existing markets.
PRODUCT DEVELOPMENT: to introduce new product/service into existing markets.
MARKET DEVELOPMENT: to introduce existing products/services into a new market. It can take two
forms: new users or new geographies.
CONGLOMERATE/Unrelated DIVERSIFICATION: to introduce new product/services into new market.
All these direction can entailed the diversification process:
-Diversification: to increase the range of products/servies served by an organisation.
- Related Diversification consists of diversifying into products/services with relathionships to the
existing business. (SONY went from Walkman to MP3s)
- Unrelated diversification consists of diversifying into new products/services with no relathionship to
the existing business.
Another direction of growth strategies is the outsourcing process, which is the
process by which activities previously carried out internaly are subcontracted to
external suppliers.
Another direction for corporate startegy can be vertical integration.
This directoin entails to enter activities where the organisation is its own suppliers or customers.
Vertical integration can go in two direction:
a. Backward integration: It involves the purchase of suppliers. Activities related with the inputs.
Benefits: improved efficiency, cost savings, cut transportation costs, firm more competitive.
For example: the acquisition by a car manufacturer of a component supplier.
If a bakery business bought a wheat processor and a wheat farm.
b. Forward integration: it involves the purchase or control of distributors. Activities related with the
outputs.
For example: if a bakery sells its goods itself at local farmers markets or owned a chain of retail
stores, through which it could sell its goods.
Vertical integration increases the corporate score within an organisation. It brings together activities
up and down the same value network.
By contrast, diversification involves more or less value network. Diversification is someties referred
as Horizontal Integration.
Horizonatal integration:
The acquisition of additional business activities that are at the same level of the value chain in
similar or different industries.
Because the different firms are involved in the same stage of production, horizontal
integration allows them to share resources at that level. If the products offered by the
companies are the same or similar, it is a merger of competitors. If all of the producers of a
particular good or service in a given market were to merge, it would result in the creation of a
monopoly. Also called lateral integration.
For example: an automobile manufacturer's acquisition of a light truck manufacturer.
Benefits: economies of scale, economies or scope, increased market power and reduction in
the costs associated with international trade by operating in foreign markets.
DENMARK EXPORT CANON
1.
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4.
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7.
8.
Locomotives (Arla Food, Carslberg, ISS, Novo Nordisk, DSV)
The Niche Champions
The Merchants
The Green Front Runners
The Welfare Exporters
The Super Designers
The Chameleons
The Born Globals
Locomotives
Key players in Denmark’s export.
They generate a big amount of the country’s wealth.
Leaders in their own fields
Build and maintain strong competitive advantages.
Leading experts in inspiring clusters.
Blooming exports before 1989
Following the new trends of the globalised world
35% more productivity than their competitors in their domestic market
Creators of jobs, growth and country’s wealth
Food, pharmaceutical and transport industries are the most successful Danish locomotives
companies (Arla Foods, DSV or Novo Nordisk)
In the globalised world there is a big demand for highly mobile workforce.
For example:
A.P. Møller - Mærsk – Shipping Industry
The A.P. Moller - Maersk Group is a worldwide conglomerate which operates in 130
countries with a workforce of over 89.000 employees.
A.P. Møller - Mærsk is Denmark's largest company and one of the largest shipping companies
in the world. The group is also active in the energy sector, logistics, retail and manufacturing
industries.
Revenue (2013): 47 billion US Dollars
Net Profit: 5.2 US Billion Dollars
THE NICHE CHAMPIONS
-They specialises and supply unique services that the rest companies cannot copy or produce.
-They have a strong market position
-They find gaps in the global market that are not fill out by other companies
-They fill out the gaps that can bring the best exports
-These gaps require high level of knowledge and skills
-Competitions on: prices, knowledge + skills (capacities)
-Flexible and purposeful specialisation
-They quickly adapt to the customer’s way of working.
- They are an excellent element for growth and success in export markets.
-Premium prices in export due to the unique production in the global market.
-Productivity must be improved constantly to maintain quality high and prices low.
IN DENMARK
- The Danish niche operator usually win the business because it can do something that the big
companies cannot.
It could be the case that large companies (competitors) have 10 finished products in stock, but
the little Danish niche operator wins the order because it can make a partnership with the
customers for a tailored solution.
-Almost fifth of Denmark’s total export comes from this niche product. Therefore Denmark is at
the top among the other European companies providing unique services and therefore it adds a
special competitive advantage for the Danish niche champions.
-They connect Denmark to the rest of the world.
- Hidden world champion:
This category collaborates with small and medium niche players, who are nearly outside
Denmark’s borders.
And the customers are typically other companies using the niche products
in their own production.
-Examples of danish companies:
a. DLF-TRIFOLIUM: a global leader supplier of seeds to farmers all over the world and
responsible for the turf at the world’s best football pitches.
b. Welltec: they manufacture robots that facilitate the oil extraction.
c. FOSS, who supplies advanced measuring equipment for the food industry to improve food
safety.
EXAMPLE OF NICHE CHAMPIONS
DLF-TRIFOLIUM is a leader in the global market within the specialist niche of
grass seeds. The company has supplied grass seeds for prestigious events such
as the World Cup in South Africa in 2010 and the 2012 London Olympics.
DLF-TRIFOLIUM in recent years has increased a rapid growth and currently enjoys a 50
per cent market share in Europe and a 25 per cent market share globally.
The company recognizes that the secret behind DLF-TRIFOLIUM's success is
research and development. One in ten of the company's approx. 650 employees
only have one focus: to refine the different grass types.
DLF-TRIFOLIUM works in different areas: football pitches, tennis courts and golf
courses but it has also added two more areas in their services: forage grass for farming
and turf for standard residential gardens.
Each area requires something specific and each type of grass needs to be adapted in
different climates, which requires more research, specialisation and development.
THE MERCHANTS
• The ability to negotiate, to always get a good price and create a long-term and trustful
relationship with the customer is a virtue typical of the most successful merchants in export
markets.
•Even if the head office is in Denmark, creating value across borders is what counts in an age of
globalisation.
•Success is also about being driven by the process to do a good Deal  “Buy cheap and sell
dear” But do it properly so that both seller and buyer want to do business again.
•The most successful Danish Merchants are able to..
...maintain flexibly and agility
...revert to the original core business in the local market.
... The Merchants focused on product innovation, service and physical presence in growth
markets
IN DENMARK
Only a few of Denmark’s retailers have penetrated the important markets in neighbouring
countries. Only a very limited number of Danish retailers have successfully exported to growth
markets as far away as China.
By the end of 2013, the Danish owner of the visible Danish brands and brand group BESTSELLER,
expects to have opened store number 10,000. In China alone, BESTSELLER Fashion
Group China has over 6000 stores, which the family-owned company runs in collaboration with
the team behind BESTSELLER in China. The enormous growth in international markets has been
driven by the BESTSELLER DNA: doing good business. BESTSELLER became the retail chain with
the most shops in the world, thanks to its strong business acumen
The Danish-owned fashion brands from BESTSELLER are currently more visible on the world’s
high streets than Swedish Hennes & Mauritz and Spanish Zara.
Part of the secret behind the successful fashion company from central Jutland is located in
family ownership and a rootedness in the fundamental value that good business acumen equals
long-term
relationships and reciprocal partnerships.
BESTSELLER has been working with the
same suppliers for many years, some as many as 30 years, and many have grown
alongside the company.
THE GREEN FRONT RUNNERS
• The ability to simultaneously set ambitious climate, energy and environmental targets
while also maintaining a position as one of the world's most competitive nations has
placed Denmark as an international benchmark for conversions to green energy.
• Denmark not only offers one of the world's most ambitious energy and climate plans with
targets such as the complete elimination of the use of fossil fuels in the energy and
transport sector.
• Denmark also uses the more wind power as part of its energy system than any other
country in the world and it has also contributed to environmental and energy-efficient
Technology
Within Europe, Denmark is the country in which energy technology represents the biggest
share of total exports (10%). This is due to several decades of ambitious energy saving
plans, forward-looking environmental legislation and demanding, environmentally
conscious consumers.
.Wind turbine manufacturer Vestas became the world's biggest and to the lead in a Danish
wind power cluster, which also attracted ambitious foreign competitors because
of its strong skills.
THE WELFARE EXPORTERS
The Welfare Exporters suply medicine, care equipment, hearing aids and high quality
service solutions.
Companies such as Coloplast, Falck, Oticon and Systematic are all exporters that have
gained strong positions in a wide and fast growing market for welfare solutions. They
have been relentless in their hunt for quality and innovation.
THE SUPER DESIGNERS
Designed in Denmark' has become a global brand that strengthens competitiveness,
increases export, profiles Denmark and enables the sale of products and services at
a higher premium price in the world market.
Examples: ECCO’s Shoes, LEGO’s bricks and Fritz Hansen’s furniture Design or Henning
Larsen’s architectural masterpieces.
Characteristics: Aesthetics, functionalism and a thorough understanding of users' needs
and behaviour.
THE CHAMELEONS
The Chameleons reinvent themselves and thoroughly transform their former business.
They have made a strategic U-turn and found new ways to success on the global
market.
The chameleons are the most innovative and bold companies, and with a strong and
purposeful management that help and support them for such radical transformations
For example:
- Fertin Pharam, emerged from the chewing gum company Dandy,
where they have gone from producing sweets to producing medicine.
- FLSmidth, which in order to combat a sudden threat from a cheap Chinese
competitor, had to give up its traditional way of thinking the cement industry and
develop a completely new supply chain and service concept.
THE BORN GLOBALS
The Born Globals are international players from the day they were born.
They are considered as growth companies that have always traded globally
These companies have become global at express speed, and
they have enjoyed higher growth rates and better job creation than other Danish
companies.
One example is the manufacturer of fruit concentrate, Orana, which was global from the start
and they continue to sell concentrate to juice manufacturers in
more than 40 countries.
✳ A strong and successful management  willingness to take risks, ability to make decisions
and a purposeful strategic focus at senior management level.
✳ Agility and the ability to adapt rapidly.
✳ Localisation and a strong national position do not work against globalisation. Local market
knowledge, good language skills and cultural understanding are important components.
✳ Staying close to customers.
✳ Ambition in all areas. Without sky high ambition and demands on employees,
managers, products, services, design, research and development, you cannot
attain world-class level and compete with the best in the world.
✳ A constant eye on future trends and tomorrow's market requirements.
This modul is focus on Growth Strategies.
The poject for this model is the following:
You need to consider yourself a representative of your chosen company
that has been asked by the Danish Export Council to present the
categories where Denmark excels. For this purpose you are going to
participate in a conference as a speaker, talking about your selected
industry and explain how Denmark excels in this industry and identify
factors that may pose a threat or an opportunity for the category. Besides
this your presentation should also include a short introduction to your
company focusing on your specific competitive advantages. In order to do
that you need to include elements of growth strategy theory, export
knowledge and descriptive economics. The audience will be
representatives from potentially new markets.
The category assigned to my group and I was Locomotives and we decided to focus our project on the
Danish company “DLG Group”.
The DLG Group is one of the largest agricultural companies in Europe and is currently owned by
30,000 Danish farmers. In addition to agricultural products, the group's activities also include
supplying vegetables to the catering and retail trades, electricity trading, telecom, pot plant sales,
etc. these activities are split up between many smaller companies, which again are organized in to
four groups. This mean DLG in an Umbrella company. They have one mean company (dlg) and a lot of
other company, which are, own or work with this main company.
1969- DLG is a cooperative which was formed in 1969, when the company’s JAF, Jydsk Andels
Foderstofforretning (1898), ØA, Øernes Andelsselskab for Indkøb af Foderstoffer (1901) , and DAG,
Dansk Andels-Gødningsforretning (1901) was put together( fused).
1994- DLG buys up superfos Grovvare
1999- DLG buys Fyens andels-foderstofferretning (FAF)
Dlg says that their main value is Innovation. They have chosen to be innovative especially with their
production, where they focus on optimizing their production methods, and developing their products.
The strategic focus of dlg is on expansion both in and out of Denmark. Dlg is presently represented in
over 20 country by different father companies like HaGe (Germany), Svenska foder (Sweden),
Scandinavian farmers (Baltic region).
Dlg is also one of the biggest exporters of malt, seeds (and much more) in Europe
In 2014 they had 7500 people working for them where 3000 of them where in Denmark.
What is next? :
They don’t have any preside data on this but say in their promo movie that they are also expanding in
to the Asian markets (china) right now and are looking for new options.
They strive to do everything smarter, faster and more efficiently in innovation for
grains and energy efficient farming machines in order to insure that they can
constantly develop and deliver new services and products to excising and new
markets.
Product Development ( new products + existing market)
By creating grains that can grow in different climate and withstand harsh weather
conditions, the most effective fertilizers to help them grow as well as advice on the
most effective way of farming crops for the largest crop sizes possible.
Their main focus in service and energy is to create more effective machinery and
logistics solutions in order for DLG to save costs and create a higher turnover for both
customers and owners.
Market Penetration (existing products + existing markets)
By acquiring small companies under its umbrella, DLG is increasing the share of
current markets with its current product range. DLG is focused on 9 different activities
( animal nutrition, plant cultivation) related to the agricultural industry and all of them
are managed by a lot of other companies that work under the main company, DLG.
The main benefit is to stay current and continue to create value for owners and
customers by Internalization and interaction within subsidiaries and collaboration with
Universities for the newest of technologies.
Adela García González
Marketing Management
Module 3, Second semester