Denmark's Export Canon

DENMARK’S EXPORT CANON

LOGOTYPE OVERVIEW MAIN DEPARTMENTS

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Text: Anders Rostgaard Birkmann, Marianne Kristensen Schacht, Villads Andersen, Bjarke Møller, Bjarke Wiegand, Ida Strand and Claus Kragh.

Illustration: Amanda-Li Kollberg and Michael Hernvig.

Graphic design: Anne Sofie Bendtson.

English translation: Naturally Nordic and IP Words/ Iben Philipsen.

Photos: Søren Malmose, Haldor Topsøe, FLSmidth, Welltec, DLF-TRIFOLIUM, Siemens, Carsten Andreasen, Anne Fonnesbech, Magnesium, Simon Høgsberg, Thomas Borberg, Corbis, Dan McCoy, Asger Ryø Borberg, Gregor Schuster, Topfoto, Solent.

Editor: Katrine Nielsen.

Editor in chief: Bjarke Møller.

ISBN: 978-87-90275-08-2

2 DENMARK’S EXPORT CANON

Contents

04 Foreword 52 The Welfare Exporters 56 Coloplast 06 The Danish export adventure 57 Falck 07 What is export today? 59 Oticon 08 8 categories and 30 companies 60 Systematic 11 7 common acknowledgements 62 The Super Designers 12 The Locomotives 66 ECCO 16 Arla Foods 67 Fritz Hansen 17 Carlsberg 69 Henning Larsen Architects 19 ISS 70 Designit 20 Novo Nordisk 72 LEGO 22 DSV 74 The Chameleons 24 The Niche Champions 78 Fertin Pharma 28 DLF-TRIFOLIUM 80 FLSmidth 29 FOSS 31 Welltec 82 The Born Globals 86 Io-Interactive 32 The Merchants 87 Orana 36 BESTSELLER 89 Universal Robots 38 NOVASOL 90 Maersk Line 40 Danske Commodities 92 The canon panel 42 The Green Front Runners 46 Grundfos 94 The 50 semi finalists 47 Novozymes 94 50 companies were nominated for the 49 Siemens Wind Power semi-final 50 Haldor Topsøe

3 Foreword from the Danish Trade Minister

What is Denmark good at? societies. The companies listed have all contributed This is the fundamental question the canon attempts to what we have become, and continue to do so today. to answer. I have no doubt that future prosperity springs from our The future we face is one where we have to increas- history, from the strong society we have built through ingly relate to the frequently used term of interna- generations. A society in which we work together; the tional competition. engineer working with the metal worker, company How will Denmark fare in international competition? owners working with wage-earners, the private Denmark’s Export Canon examines some of the business community working with a well-functioning companies that have successfully competed with public sector. countries which, unlike Denmark, are rich in natural This export canon is both a tribute to the companies resources, densely populated or beneﬁ t from vast that have achieved export success, and a catalogue economies. of inspiration for companies facing a new export We may be few and small, but Denmark has adventure. nontheless become one the world’s wealthiest Today every fourth job in Denmark is either directly or indirectly driven by export. In othre words, 700,000 Danish jobs depend on the ability of Danish companies to sell products and services abroad. In 2012, Denmark’s export of products amounted to DKK 609 billion and revenue from exporting services was DKK 377 billion. These ﬁ gures show that export is an essential prerequisite for our welfare society. Future prosperity will spring from Denmark’s Export Canon is based on numerous our history, from the strong society recommendations received from all over the country “ and these nominations have been an essential part we have built through generations. A of identifying the positive stories in Danish export. A society in which we work together. heartfelt thank you therefore goes to the many who The engineer working with the metal nominated companies, and a huge thank you also goes to the expert panel, who managed the important, worker, the business owner working not to mention challenging, task of narrowing down with the wage-earner. The private the nominations to just 30 companies. It was tough, but the panel managed to select 30 companies from business community working with a which we can really learn something, and they helped well-functioning public sector.” extract a lesson from each one. Finally a big thank you to Monday Morning who handled the entire process, and to Dansk Erhverv for their contribution and excellent collaboration on the launch of Denmark’s Export Canon.

Nick Hækkerup Minister for Trade and European Affairs

4 DENMARK’S EXPORT CANON

Foreword from the canon panel

Who and what will Denmark live off? This is the key that are important for the story about modern Danish question driving the export canon. export. Monday Morning has authored the overall ex- Denmark’s fi rst export canon lists 30 companies, port canon in close dialogue with the membres on the which have all been performing with exceptional suc- canon panel, but the editorial responsibility, including cess on the global market since 1989. Their fi nancial the description and angle of the chosen export com- results are fi rst rate, their growth is impressive and panies lies exclusively with Monday Morning. they have conquered new markets across national The companies selected represent specifi c and borders. Each company is unique, they operate in tangible examples of how to achieve success in an different industries and they sell different products ever competitive global market. Several of these com- and services. They are all signifi cant representatives panies can help solve the biggest challenges we face for the Danish export elite and help secure future in the future in terms of raw materials, health, green prosperity in Denmark. markets, effective logistics and robot technology. A canon is an effective tool for making the debate The canon panel has used a modern and complex around the country’s competitiveness more focused, export concept that not only covers trading with goods relevant and instructive. The Danish export canon and services across national borders, but also value reveals the secret behind Danish export. Some com- creation generated through subsidiaries franchise panies, such as Maersk Line, represent the large chains, licensed production and other froms of trade hallowed comapnies who have accumulated in-depth within the global market. By way of example, Carls- knowledge of the global market over decades. Others, berg brews and sells most of its beer abroad, without such as Coloplast and Novo Nordisk, are some of the iithe product ever actually crossing the Danish border. most innovative companies in the world, while others There are many ways to success on the global market. are outstanding within their specifi c niche markets. The objective of the Danish export canon is to create More than 300 companies were nominated for this a new milestone in the debate on what makes an out- canon and they include many successful exporters. standing export company, and how specifi cally such Following careful consideration and debate, the can- a company can help strengthen Denmark's competi- on panel selected 30 companies based on a number tiveness in the global market place. It is hoped that of parameters, including fi nancial performance and this canon will inspire many other Danish companies growth over several years, export ability and global to achieve success in export markets. We also hope it presence. Meanwhile, unique skills within different helps qualify and clarify the debate on Danish export areas were also considered a criteria, and so the total and competitiveness to the general public. Finally, we export canon comprises a strong and comprehensive want to present the younger generation with some representation of the scope of Danish exports. The exciting examples of the opportunities available to 30 companies have been split into eight different them in this global era, one that will soon be theirs. main categories: locomotives, niche champions, merchants, green front runners, welfare exporters, super Enjoy! designers, chameleons and born globals. Each main category contains several common denominators, The canon panel and Monday Morning

Helle Søholt Per V. Jenster Lone Fønss Schrøder Philipp J.H. Schröder Partner and CEO, Professor at the Nordic International Board member, Aker Solutions, Professor at the Institute of Gehl Architects Management Institute, China and Handelsbanken Volvo and more Economics, the University of Nyenrode University Holland Aarhus

Christian Stadil Christian T. Ingemann Thomas Bustrup Bjarke Møller Co-owner of Hummel Director, The Danish Chamber Director, The Confederation Editor in chief and Thornico of Commerce of Danish Industry Monday Morning

5 The Danish export adventure

Since the fall of the Berlin wall in 1989, the story of Danish export has been one of unique achievements and innovative companies that have been able to make excellent use of the new wave of globalisation and free trade.

The value of Danish export has nearly company, Maersk Line, originates in Den- important to secure wealth and welfare trebled since 1989, even though competi- mark. Equally, good business acumen and for the future. No other country in Europe tion from new fast-growing nations has the ability to develop democratic design at has a population with as a positive an been extremely tough. Including service reasonable prices have also helped pave outlook on economic globalisation as exports, the total value of Danish export the way for textile company BESTSELLER Denmark. is close to DKK 1,000 billion, which is 56 becoming the world's biggest retail chain But there are still many who are not per cent of the Danish GNP. In the erarly in terms of total number of retail shops. aware of the secret behind Denmark’s 1970s, the export share of the Danish And Danish food companies from Arla to export DNA and the reasons for its suc- economy was only half of that. This rise Carlsberg have expanded globally, which cess in the export markets during recent in exports has been a driver behind the means that food cluster companies now decades. Which businesses have created increased wealth and welfare in Denmark, make up a quarter of Danish export. the biggest companies, what is their com- enjoyed by many generations. Within each line of business, you will ﬁ nd mon denominator, and is there something For many years, Denmark has been one companies that have delivered remark- about the Danish model that provides of the world’s most open economies, and able performance. them with particularly good conditions for some of history’s greatest seafarers and developing the unique skills that are es- merchants have gained a thorough under- Export’s DNA sential for successful export businesses? standing of what is required to succeed in Today Denmark is one of the most glo- While Denmark is still one of the export markets. It is no coincidence that balised economies in the world, and there wealthiest societies in the world with a the world’s biggest container shipping is a broad understanding that export is strong welfare state, the country’s com-

6 DENMARK’S EXPORT CANON

What is export today?

This canon uses the word export for a companies and their subsidiaries, sub- ✳ Setting up license production abroad complex and modern export concept. Ex- contractors and trade partners create where other companies are allowed to port not only covers the physical products across borders. These are the conditions produce a Danish brand, product, ser- that are transported off in containers, of globalisation, where organisations' vice, system or similar, but where the crossing the Danish border on their way transnational value creation has grown ownership still lies with the Danish par- out. Today export also covers much more signifi cantly because of the value they de- ent company. than just trading across borders between liver at home. two states. Knowledge and services are Modern export companies operate on ✳ Outsourcing. The Danish company also traded across borders, and modern the global market at many different levels. moves a part of its business out to ex- export companies are entering more com- ternal suppliers. The Danish company plex global value chains that involve more ✳ Sales of products and services from still owns the product or service, even if than just the sale of fi nished products and Denmark out into the world. They can the company only owns part of the fi n- services from one country to another. stretch from classic product export to ished product or service. Danish companies may trade at the sale of services to foreign tourists visit- start of the value chain -such as suppliers ing Denmark. ✳ Sale of the entire company to a foreign of knowledge or individual components owner. and specialised parts. Or they may appear ✳ Sale of products and services produced further along the value chain as suppli- in a Danish company’s subsidiary based ✳ A foreign-owned company that settles in ers of complete systems and services. Or abroad. This includes the sale of prod- Denmark. they may work in the fi nal link of the value ucts and services produced by a Dan- chain - before a product or service is sold ish jet company abroad to customers The majority of successful Danish export on the market, delivered and distributed to abroad. Here the product never actually companies on the global market use sev- the customer. physically crosses the Danish border. eral of the aforementioned export and When you look at companies' value globalisation strategies at the same time. creation in export markets, it is not enough ✳ Developing franchise concepts that are to look solely at national trade balances. born in Denmark but the export product You also have to look at the value the is the concept.

petitiveness is currently under pressure and service solutions and to create still many small to medium-sized com- and an increasing amount of obstacles additional value through an increase of panies in Denmark that have yet to fi nd loom on the horizon. Until now Denmark productivity. This is also part of the secret their way onto the export markets. They has been able to compete despite the behind the Danish export adventure. are still dependent on the local market, current climate, but how will it secure the Despite a number of traditional fi nan- they are not as productiveas others and country’s future wealth and increase its cial forces of gravity, as a high cost nation they lack innovation. These less innova- exports to the global market? Denmark has still been able to develop tive and less productive companies have a unique and distinguished competitive a lot to learn from the more successful Competitive advantages model. The best Danish companies have export companies that continue to obtain A country’s competitive advantages been extremely competitive and man- successful results in the global arket. usually develop in localised processes, aged to export goods and services at Danish companies have the advan- and the differences in a nation's fi nancial a relatively high price thanks to good tage of coming from the country with the structures, values, cultures, institutions business acumen, creativity, innovation world’s lowest level of corruption. The and history help secure competitive suc- and design. On average, their productivity gap between managers and employees is cess. It has also been well documented is 35 per cent higher than other Danish small, and the path from idea to decision that countries’ competitive advantages companies, and they have been highly is short. Good language skills have been grow from continuing pressure, obstacles effi cient at knowing what customers an important asset, and fl exibility has and tough challenges, forcing the compa- in other countries want. However, the been high. The ability to quickly adapt as nies to develop new innovative products other side to the story is that there are well as a well-developed skill for decoding

7 new requirements on the export market sized companies in Denmark that have technological developments accelerate are what signifi es the best Danish export not managed to make the leap from and customers constantly bring new companies. The textile industry was quick the local and national market to the requirements and wishes into play. to react to relocation and low price com- global market. And many have still not petition by adapting their focus on design deciphered the secret behind the best 30 companies and 8 main categories and logistics as well as setting up inter- Danish export successes. Some have This canon highlights 30 companies – national chains and concepts. Equally, resorted to exporting to neighbouring small and large - that have performed the Danish agriculture and food industry markets such as Germany and Sweden, remarkably well in different areas. has built up an international reputation by but the most successful export compa- They have been split into eight main producing food of a high quality in a safe nies think globally and have ambitious categories, each forming part of the story in environment, which gives it a strong expansion plans that include the growth- of the success of Danish export since position in the Japanese market, by way rich BRIK markets. The next decade will 1989. The Danish export DNA does not of example. also provide good growth opportunities comprise one single formula, because it is for those companies who understand the very complex story. There are many differ- Demanding customers importance of developing new innovative ent recipes, and they cross traditional in- Denmark is a nation of demanding cus- solutions to the biggest challenges facing dustry differentiation. But the trademark tomers who expect high quality, who are global society. of Danish export success is a talent for highly knowledgeable on design, they set By 2005, the world population will developing unique products and service a high bar for energy effi cient solutions have increased by approx. one billion solutions, creating strong niche positions, and are quick to adapt to new technolo- people. The global middle class will grow for reading the market quickly and adapt- gies. This has given companies and their alongside rapidly rising living standards in ing to new customer requirements. All the employees an initial impression of what Asia and other developing regions. This companies have a high level of agility and is required to beat the competition. will lead to increased demand for food, have proven durable in export markets. Different companies such as ECCO, Fritz water, energy and welfare solutions – ar- Hansen, Grundfos, Vestas and Siemens eas where Danish companies are strong The eight categories are: Wind Power have benefi ted from this. and at the forefrunt of developing pro- The Locomotives: The locomotives repre- And from very early on, the public sector ducts, technologies and service solutions sent the heaviest part of Danish export. gene-rated a major demand for welfare with enormous market potential. But hav- 3,000 Danish companies provide more services, which have given some of the ing a good idea and dreaming of furure than 90 per cent of export goods and ser- Danish health and welfare companies market opportunities is not enough. vices, but if you look closer, half of Danish such as Coloplast, Falckand Oticon a Companies must have a number of win- export comes from just one hundred head start. ning skills to succeed in the global market companies. Most of the big locomotives, There are still many small to medium- where competition is rapidly developing, including Arla, Carlsberg, DSV, ISS and

The world has shrunk

In 1989 LEGO had 6,252 employees, of which ISS created over 50 jobs a day from 1989 to 2012 3,243 were stationed in Denmark. Today, LEGO – a total of 422,873 jobs. Meanwhile turnover has 12,320 employees, of which 3,895 are rose by 783 per cent and ISS conquered 36 new stationed in Denmark. markets, which is why they have offices in 50 countries today.

8 DENMARK’S EXPORT CANON

Novo Nordisk, are listed in this canon unique and strong competitive advantage. is what counts in an age of globalisation. because they have all delivered impres- Maintaining a strong and innovative And so exporting services makes up a ris- sive performances and each in their own platform within a niche market makes it ing share of the Danish export adventure. way, they tell a unique story. Some, like easier to charge a premium price in export ISS, have created hundreds of thousands markets, something Danish companies The Green Front Runners: Wtihin Europe, of jobs both at home and abroad, while are good at. Denmark is the country in which energy other locomotives have been a focal point technology represents the biggest share for strong business clusters. In the food The Merchants: The ability to negotiate, of total exports. Several decades of ambi- or pharmaceutical sectors, the big loco- to always get a good price and create a tious energy saving plans, forward-looking motives have worked closely with other long-term and trustful relationship with environmental legislation and demanding, companies, research environments and the customer is a virtue typical of the most environmentally conscious consumers the public sector in testing and developing successful merchants in export markets. meant that Danish cleantech companies new products, which have later sold in the Fashion retailer BESTSELLER is an excel- quickly came under a severe pressure global market. lent example. With approx. 10,000 stores on the domestic market. But they turned in 38 countries it is the retailer with the it into an advantage and moved to the The Niche Champions: Throughout most stores in the world, which is why the front of the global competition. Wind history, Denmark has produced a range company made it into this export canon. It turbine manufacturer Vestas became the of super sharp companies that have could also have been Lars Larsen’s JYSK, world's biggest and to the lead in a Danish conquered select niches in the global which in its time was hailed in the Danish wind power cluster, which also attracted market through fl exible and purposeful management canon, but BESTSELLER ambitious foreign competitors because specialisation. This export canon includes has a greater global reach and has even of its strong skills. When Vestas was hit DLF-TRIFOLIUM, a supplier of seeds to overtaken empires such as H&M and Zara by a crisis, Siemens Wind Power proved, farmers all over the world and responsible in the international arena. through impressive growth, that the Dan- for the turf at the world’s best football There are also other types of mer- ish wind adventure is bigger than any one pitches. Also included is Welltec, where chants, such as energy trading company company. In recent years, Siemens Wind they manufacture robots for oil extraction, Danske Commodities or the tourist indus- Power has shown far higher growth than and FOSS, who supplies advanced meas- try’s successful holiday rentals company Vestas and that is why the German-owned uring equipment for the food industry. NOVASOL. There are no classic export Group was selected for the Danish export Nearly a fi fth of Denmark’s total export companies manufacturing in Denmark canon at the cost of the pioneering Danish comes from so-called niche products and and sending their export goods across company. the country is among the best in Europe borders. The modern merchant under- Denmark also has many other world at selling unique services that are hard stands that even if the head offi ce is in class green companies. Danfoss with for others to copy. This gives Denmark a Denmark, creating value across borders their thermostats and district heating

In 1989, DSV 's turnover was just DKK 600 In 1989, Grundfos consisted of 24 companies million, with 25 employees abroad. In 2012, their with a turnover of DKK 3 billion. turnover had risen to DKK 44.9 billion with more Today the group has 80 companies in 60 than 20,000 employees around the world. countries 19,000 employees worldwide and its turnover is DKK 22.6 billion.

9 solutions could also have been part of up and take on the export markets. Den- to reinvent themselves and thoroughly this export canon, but their services were mark’s strong patient associations have transform their former business. They beaten by another family-owned company, also helped generate a high expectation have made a strategic U-turn and found Grundfos, where they produce energy effi - as well as demands for high quality. new ways to success on the global market. cient pumps for a world with an increasing A good example is Fertin Pharam, sprung water shortage. The Super Designers: Another important from the chewing gum company Dandy, Two of the other companies selected, category for the best Danish export where they have gone from producing Haldor Topsøe with their catalysts and No- successes is design. Danish design com- sweets to producing medicine. Another ex- vozymes with their enzymes, also merit a panies are internationally known for their ample is FLSmidth, which in order to com- mention, as in each of their markets they minimalist and fl awless expression, their bat a sudden threat from a cheap Chinese have helped make Demark internation- functionalism and thorough understand- competitor, had to give up its traditional ally known as a country promoting a green ing of users’ needs and behaviour. It is way of thinking the cement industry and economy. not just the classic design companies develop a completely new supply chain and such as Fritz Hansen (furniture design) service concept. The chameleons are the The Welfare Exporters: One of the sub- or successful architects such as Henning most innovative and bold companies, and stantial future growth markets is expected Larsen Acrhitects, who have broken into without a strong and purposeful manage- to be new welfare solutions and health. export markets by adhering to Danish ment they would never have succeeded WithIn this area Denmark has a number design traditions. Other industries, such such radical transformations. of international players, and not just the as ECCO (shoe industry) or LEGO’s toys large locomotives like Novo Nordisk, but that have sparked children’s imagination The Born Globals: A new generation also the more specialised companies such fro generations. All these companies of growth companies that have always as Coloplast, Falck and Oticon. Curently, have experienced respectable growth traded globally and thus comprise an Denmark has a strong and innovative in recent years. In 2012, Danish Design ever important part of the modern Danish cluster of welfare exporters that supply alone amounted to DKK 75 billion, includ- export history. These companies have medicine, care equipment, hearing aids ing furniture, fashion and architecture, become global at express speed, and and service solutions of a high quality and and across industries design ideas have they have enjoyed higher growth rates they are each leaders within their niche. gained popularity and helped add value to and better job creation than other Danish Part of the secret behind their success products and services. companies. A quarter of all new produc- is the Danish public sector, which every tion companies, set up since the mid- year purchaes services worth billions, it The Chameleons: The Danish export 1990s are born globals. This means they creates new demands and acts as a demo adventure also contains surprising stories have achieved an export share of over lab for the companies before they scale about companies that have been able 25 per cent during the fi rst three years

In 1998, lo-Interactive only In 1989, 42 per cent of Fritz Since 1989 Falck has become employed Danes. Today they Hansen’s sales were abroad. the world’s biggest international employs 20 different nationalities. Today this figure is 80 per cent. ambulance operator.

10 DENMARK’S EXPORT CANON of existence. The archetypal born global number of common denominations that mental prerequisite, but without a strong company is the A.P Møller-Mærsk Group, other companies could benefi t from: international sales organisation that un- an internationa player from the day it was derstands how to turn this knowledge into born. Maersk Line is the world’s leading ✳ A strong and successful management new lucrative sales, you will not succeed. company in container transport and it is is crucial for success. Without the willing- a pioneering example of a born global ness to take risks, ability to make deci- ✳ Ambition in all areas. Without sky high company. But many small and medium sions and a purposeful strategic focus at ambition and demands on employees, sized companies could happily implement senior management level, you won’t get managers, products, services, design, a global strategy, as this would boost far and the most successful have persis- research and development, you cannot growth. One example is the manufacturer tently cracking the code of the most tough attain world-class level and compete with of fruit concentrate, Orana, which was and demanding markets. the best in the world. global from the start and they continue to sell concentrate to juice manufacturers in ✳ Agility and the ability to adapt ✳ A constant eye on future trends and more than 40 countries. Many of the most rapidly defi nes the difference between tomorrow's market requirements. Major successful born globals in recent years the successful and the less successful social challenges and market require- are IT and technology companies that companies. Several companies have had ments – for sustainable solutions, good have been able to quickly upscale and to reinvent themselves or quickly test new raw materials, health or welfare technol- sell to the entire world. The successful business models to increase growth and ogy – creates major growth potential for gaming company Io-Interactive, creators conquer new markets, for without agility both fi rst and second movers. of the computer game Hitman, a global and an ability to adapt, you quickly lose blockbuster, and Universal Robots, where out to the competition. ✳ Not everyone needs to outsource to they make small fl exible robots, wasted no achieve global success. It is still possible time looking beyond Denmark's borders. ✳ Localisation and a strong national posi- to produce and develop new innovative Two years in, Universal Robots sold 66 tion do not work against globalisation but products in Denmark. Some of the best per cent of their products abroad, and are key prerequisites to achieving success export companies have proven that with today, 90 per cent of their products are in most markets. Local market knowledge, fi rst-rate productivity and innovation you sold in export markets. This is a recipe good language skills and cultural under- can compete and produce on Danish soil that could easily be followed by several standing are important components. despite the high cost base. small and medium-sized businesses. ✳ Staying close to customers. In-depth 7 common acknowledgements customer knowledge or preferably a close The story of all 30 companies comprise a partnership with customers is a funda-

In 1991, FLSmidth had 6,400 employees abroad. In 1989, Arla Foods’ export share was 51 per Today this figure is 14,200. cent. Today it is 85 per cent. In 1989, Arla Foods had 400 employees abroad. Today this figure is 11,000.

11 12 DENMARK’S EXPORT CANON

The Locomotives

Key players in Denmark’s export story are the locomotives, as they carry the biggest loads in Danish export and are responsible for generating a significant amount of the country’s wealth. Arla Foods, Carlsberg, DSV, ISS and Novo Nordisk are leading locomotives within their fields. Their ability to build and maintain strong competence clusters has become increasingly important in a globalised world, with a highly mobile workforce, and the congregation of leading experts in inspiring clusters. It is these 'expert' clusters that will prove crucial for tomorrow’s global competition.

Arla Foods - The world's seventh largest dairy sets new standards for food safety and sustainability. Page 16.

Carlsberg – The world’s fourth largest brewery is focused on life's pleasures and expanding globally with over 500 brands. Page 17.

ISS – Denmark’s biggest international employer is unified by a complete service concept that brings together over half a million employees world wide. Page 19.

Novo Nordisk – A company with a strong set of values and currently the global first mover within insulin as well as a leading locomotive for the Danish medical cluster. Page 20.

DSV – A transport and logistics company, that conquered borderless Europe and now has a turnover of more than DKK 40 billion in 75 different countries. Page 22.

13 “The locomotives are important for Denmark because they are big, strong machines that create a significant number of jobs, growth and wealth in Denmark. They also draw other Danish companies onto the world stage and break down the barriers for those who follow.”

Thomas Bustrup, Director of DI

Denmark’s export locomotives are more than just a bunch of medium-sized companies along with them when they export to companies that have left a signifi cant imprint on Denmark's global markets. They are also catalysts for research and develop- export fi gures. They are among the global market leaders, each ment, which has not only ensured their own survival but also that in their own fi elds. They all rode the export wave before 1989, of their sub-contractors. yet unlike several of their competitors,, they succeeded in fi nd- These larger companies will always be a focal point in the story ing their place in in a globalised era. And as locomotives they of successful Danish exports. The ability to build and maintain each carry the exports for some of Denmark’s particularly strong strong clusters has even more relevance in the globalised world, industries such as food, pharmaceuticals and transport. where the mobility of the workforce is signifi cant and where lead- The locomotives’ current position is also a refl ection of ing specialists meet in the world’s most inspiring clusters. focus, creativity and an ability to adapt to constantly changing requirements when operating globally. Such skills are actually Centre of business clusters measurable. Studies show that export companies are typically 35 Although we have called them locomotives, many of Denmark's per cent more productive than their competitors in their domestic biggest export companies could literally be considered moons, market. Even if the locomotives have all been given a certain around which a cloud of small and medium-sized companies, head start thanks to being part of the globalisation trend since specialists and research institutions spin. This universe fcilitates the 1960s, the fact that they are still here, has proven their ability the sharing of new knowledge, market trends and relationships to adapt and stand strong. with other foreign companies. Arla Foods recently convinced German shareholders that the The clusters ensure that Danish companies with higher Danish-Swedish dairy would be the right partner for them. The costs can charge more money for their products because they transport and logistics company DSV has taken advantage of have a new and different edge: they can be of better quality or the major opportunities presented by an increasingly borderless surrounded by special services. Thus the cluster indirectly helps EU, and Novo Nordisk is still at the forefrunt, able to develop and strengthen total Danish competitiveness in the global market introduce the latest insulin types. place. The big companies represent the lion’s share of Danish The food industry is just one of many examples. Giants such export.According to export statistics, 100 of the large Danish as Arla Foods, which found its way into this canon, but also Dan- companies produce half of Denmark’s exports. ish Crown and DuPont, previously Danisco, have for many years played an central part in setting up of a Danish food cluster, Impact much greater which is now the third largest sector based on employment. The big companies’ impact on the Danish export story is much Many of the smaller companies in the sector have only come greater than their share of exports. For many of Denmark’s about because the large companies demanded new services to numerous smaller niche companies the pull of the locomotives’ improve their business. Danish Crown wanted robots to reduce is essential. These big companies pull a chain of small and the costs at the slaughter houses.

14 DENMARK’S EXPORT CANON

“With big companies, it’s easy to think that there is an element of eternity about them. But that’s not the case. Nokia and Kodak are good examples of how the world can suddenly change without companies being able to keep up.”

Lone Fønss Schrøder, board member of Volvo, Handelsbanken and more.

The smaller niche players who could meet these needs, were a good relationship between educational institutions, companies consequently drawn into the export markets. In 2012, according and the state. The clusters’ success depends on the right ex- to the government’s growth stream for food, the food cluster's perts, who often ﬁ nd each other in the more academic clusters. total export was approx. DKK 148 billion or 24 per cent of Danish Many of the locomotives have read the writing on the wall and product export. are currently investing in standard research and development Alongside the powerful business clusters, there is no way to survive. The Novo Nordisk Fund will, for example, create a around the science cluster within the Oresund region. Novo cluster of research centres to attract and retain the world’s best Nordisk is the towering trail blazer for a cluster that is among the researchers. Arla Foods supports food research in universities in biggest in Europe. The life science busniess creates thousands both Copenhagen and Aarhus. of jobs in Denmark, and it is one of the big export drivers in the Danish economy. Close collaboration between companies and research institutes helps create a strong and competitive eco system within both medicine and biotech. The maritime cluster is a historically strong cluster. Set up by the shipyard A.P. Møller-Mærsk and not least Maersk Line, which is the world’s biggest container shipyard, Denmark is a leader in shipping research. Copenhagen Business School is now attracting talent from around the globe to its Executive MBA in shipping and logistics. Maersk Line also has obvious qualities in the locomotive class, but the company’s global raison d’être still puts it in the Born Globals category, where it is considered a role model globalist.

Cluster competitors Powerful clusters have a place in the future, as is evident in leading countries’ cluster strategies. Singapore invests heavily in the setting up of strong biotech, food and logistics clusters. In recent years, Switzerland has built a logistics cluster, which made Carlsberg move its logistics there. According to professor Lynda Gratton of London Business School, the future's winning societies will be those able to form

15 Arla Foods Born to export

A surplus production of raw milk in Den- Another resource in increasing exports In brief mark spurred Arla Foods to set its sights for Arla Foods has been development. Export share: 85 per cent on the international market right from The market and not least the large Turnover: DKK 63.1 billion the start. The company has since grown and powerful supermarket chains are Employees (home/abroad): 7,000/11,000 into the world’s seventh largest dairy in constantly on the look-out for new Industry: Dairy terms of share ownership. Arla’s trump products and creating new demands. In Founded: 2000 through merger of card in countries such as China is the 2007 for example, Tesco asked Arla Foods Danish MD Foods (1970) and Swedish Arla company’s focus on food safety. to do a carbon calculation. And if a food CEO: Peder Tuborgh supplier is unable to cooperate with the Ever since the foundation of the company large chains, they lose momentum in the in 1888, the dairy, which later became FMCG segment. Lessons from Arla Foods Arla Foods, was under pressure to export. Investments in research and develop- ✳ Make export an essential virtue and the Both then and now, more milk was driven ment also contribute to optimal utilization main core of your strategy. This sharp- into the dairies than could be sold in of raw milk. An example of this type of ens your focus on customers – even if Denmark. innovation is the improved use of whey they are a long way from Denmark. Arla Foods is therefore a refl ection of from cheese production. Whey was once a ✳ Invest in research and development the Danish food sector, which due to a residual product used as animal feed, but with a view to achieve innovation that surplus of raw materials has always had now it is used in protein powders, sold as can develop the business and meet to consider export a natural way of selling an ingredient in other food stuffs. demands of discerning customers. its products. Arla Foods has always maintained a ✳ Think about tomorrow’s demands from The butter brand Lurpak became strategy for achieving a solid position in new markets: food safety, sustainability a bridge to the export markets for Arla new markets. The company is currently and ethics. Foods, but it is far from the the comapny's working purposefully on penetrating Asia only successful export story. These days and Africa. And it has been proven that export has become about much more cooperatives have become a signifi cant than just selling products. Arla Foods sales parameter in a world where food works with large retail giants such as Brit- scandals result in increased focus on food ish Tesco on promoting sales by improving safety. The fact that Arla gets its milk from product selection on the shelves. The need to fi nd new products and new sales methods has grown over the years. Through mergers and acquisitions Arla Foods is now Europe’s third largest dairy and seventh largest in the world. Arla Foods gathers raw milk from cooperatives all over Northern Europe, e.g. Denmark, It’s impressive how Arla has gone from being a cooperative UK, Sweden Germany and Holland. of Danish farmers, who just wanted to sell their milk, to Cooperatives proved an important “ being the world’s seventh biggest dairy. And this has been asses on the road to expansion. Many achieved with Arla keeping both feet firmly on the ground.” of the new European farmers in the Arla family believe it to be of particular value to Thomas Bustrup, Director of DI be a member of the company rather than just a supplier. The Danish cooperative concept has therefore been a proven growth engine for Arla.

16 DENMARK’S EXPORT CANON its own cooperatives and thus in charge of business plan that builds on both social the entire chain from cow to table, helped and environmental factors. convince the Chinese state-owned food Arla is working purposefully on developing company COFCO to sell its share in China’s a greener and more resource-effective largest dairy, Mengniu, to Arla Foods. business, which can meet the expecta- However, having other sales argu- tions of the increasingly environmentally ments than just fresh milk is increasingly aware consumer. Some of the company’s important for the company. As part of initiatives in this area include a commit- the growth in Africa and the race for new ment to reduce its carbon emissions by growth markets, Arla Foods will need a 25 per cent in 2020, compared to 2005.

Carlsberg Much more than just beer

Carlsberg brews local beer for local mar- Brits in Britain. This model has become In brief kets and international beer for the global the core feature of the company today. Export share: 97 per cent market. Success is about fi nding out Carlsberg currently owns breweries in 25 Turnover: DKK 67.2 billion what type of beer the Russians, French countries and in most of these, their brew- Employees (home/abroad): 2,500/38,500 and Chinese like to drink. And if they ery is the leading one in the beer market. Industry: Food and brewery. don’t like beer, the old brewery simply Success is not the result of Carlsberg Founded: 1876 by brewer J.C. Jacobsen tempts them with something else. discovering a universal beer. On the CEO: Jørgen Buhl Rasmussen contrary. Just as different markets require Even though the Danes love their beer, different marketing, different people there are simply too few for Carlsberg. And also require different drinks for different as other West European populations also occasions. While one type of beer is great drink less beer than before, the brewery for quenching your thirst after a football is faced with somewhat of a challenge, match, another is the perfect companion although not an impossible one. 166-year- to a nice meal. Carlsberg is constantly de- old Carlsberg has a long tradition of creat- veloping new beers, ciders and everything ing new products for its markets. Today, in between. Today the company boasts Carlsberg is the world’s fourth largest more than 500 different brands on the brewery and Carlsberg’s products are shelves, and approximately every seventh sold in more than 140 countries all over product is something other than beer. It is the world. Since 1876, the company’s about thinking innovatively on all fronts, researchers have been pontifi cating new not just new fl avours but also new types brewing technologies and ingredients in of packaging, new technology or a com- Carlsberg’s laboratory, and as early as pletely new category, such as the Russian 1868 the company sent its beer across traditional Brew kvas, which tastes like the British channel to the pubs in London. liquid ryebread and which has become a The UK was also the fi rst step on huge success in Eastern Europe. Draught the path to developing a new business master Modular 20 is a good example model at the end of the 1960s. Instead of of a completely new draught beer, which producing all the green bottles at home, keeps beer fresher in small bars. And Carlsberg began producing beer for the when a they designed a new bottle and

17 changed the overall design of Tuborg, natural according to the company’s analy- Lessons from Carlsberg sales grew signifi cantly in countries such sis: men drink beer, women prefer wine, ✳ Adapt to your local markets. You achieve as China, Russia and India, even though cocktails and generally seeter and lighter success by putting together a product the content was exactly the same. Tuborg alcoholic drinks, which is why Carlsberg portfolio that suits the individual mar- got a new brand and thereby a new place experiments with new drinks for women. ket’s culture and drinking habits. That in the market. A strong brand is just as However, several of the experiments is why Carlsberg develops everything important as great taste, because the have fl opped so far. Copenhagen and Beo in close collaboration with many local beer you drink says a lot about the person were two efforts that went straight in the companies. you are. And this is why Carlsberg works bin. Even if many of the new products have ✳ Products are not just products, they are constantly on developing both the global been considered disastrous, Carlsberg also a lifestyle. The packaging, design Carlsberg brand and the local brands views it differently. If you want to prosper, and TV ads are just as important as the for their local beer. Some products say you have to expect to fail sometimes. fl avour. Sometimes a product can gain bonvivant, others say an elegant business However, when things go right, they tend new life with new packaging and being woman. to go really well. The Sommersby cider marketed to a new audience. Even if Carlsberg reaches everyone won a place in the hearts of those with a ✳ Embrace failure and learn from it. When from the bonvivant to the business woman thirst to quench this summer and is now you innovate you make mistakes. The in both Western and Eastern Europe, sold in more than 30 countries. It is about most important thing is to learn as the brewery also has its sights on other constant innovation and maintenance much from your failures as you do from your successes. markets, mainly Asia, where Carlsberg for Carlsberg: locate the market, give it expects the beer market to grow in line a shot, and if it goes wrong adapt your with the general growth expected over the product and try again. next few years. The start of 2013 saw the appointment of a new director for China, who is going to ensure that Carlsberg becomes one of the three top players in the market within the next 10 years. Today the brewery has 7-8 per cent of beer sales in If you want to achieve growth, you have to be ready to take the country. It is a long journey befor they some chances. That’s what Carlsberg has done, and they have reach their target, but there is also much “ achieved results. Carlsberg has also understood the importance to be gained. Another of the company's goals is not of a focused market approach, which sometimes involves related to geography but gender. Carlsberg avoiding certain markets.” has been working intensively on attracting Thomas Bustrup, Director of DI more women to its customer base. Today, four out of fi ve customers are men. This is

18 DENMARK’S EXPORT CANON

ISS Exporting peace of mind

Paradoxically, one of Denmark's biggest more to ISS. Since ISS launched its total In brief companies supplies services that are not service concept at the beginning of the mil- Eksport: 96 per cent always conspicuous. ISS ensures that all lennium, the challenge has been keeping Turnover: DKK 79.45 billion those practicalities that come with run- up with the demands of the world. From Emplouees (home/abroad): ning a company are in place, leaving the managing cleaning, security and a few 7,750/526,250. company to focus on its core business. other services, ISS now runs canteens Industry: cleaning, security, realestate and receptions, change light bulbs and and catering While petulant teenagers have their pa- whatever else a company might need. Founded: 1901 as Kjøbenhavn- tient mothers, companies of all ages and Meanwhile several large customers began Frederiksberg Nattevagt. sizes have ISS. The large Danish service to use ISS for all its offi ces, and as a result CEO: Jeff Gravenhorst. company looks after all those elements the company sometimes employ more that simply must function when you run than 5000 people for one single customer. a company: cleaning, catering, security, It is all good for the company's economy maintenance etc. but it also places great demands on the ISS exports peace of mind, as they say. concepts that ISS has to develop and coor- The key word is management, because dinate from its head offi ce in Copenhagen. this is where ISS stands out from its com- One of the keys to ISS’s global success petitors. There are numerous cleaning, is fi nding the right balance in the service catering and security companies, but few can supply all these services in one go. ISS can because the company has worked out how to manage and coordinate numerous different processes and employees ISS has managed to combine strong values founded in a very simultaneously. On an international scale Danish approach with a strong local presence across most of the only one other company can deliver to “ globe. We should be proud that one of the world's largest emplo- the same scale as ISS (with a turnover of yers is Danish - and at the same time, the company is a highly DKK 80 billion). With over half a million employees in more than 60 countries in respected ambassador for Denmark in the rest of the world.” Europe, North America, Latin America and Thomas Bustrup, Director of DI Asia, ISS can service even the biggest international companies. Even though ISS has some of the biggest international companies among its concepts: they must be tight enough customers, this is not where the group to ensure a consistent services of high gets its turnover from. The large interna- quality, regardless of where in the world tional customers currently represent 5-6 the service is provided, while also provid- per cent of the total turnover. Large and ing a loose enough structure so that local medium-sized local and regional com- departments can adapt the service to in- panies represent the rest. Some of them dividual countries. You cannot take work- comfortably hand over the operation of ing methods and routines from Denmark their buildings and services to ISS, others and introduce them to someone in India. buy individual services, such as cleaning They cannot be copied, but the concept or catering. can, whcih is why ISS hires local staff to Following the crisis in 2008, several run its local companies, who then adjust companies began to hand over more and the concept. This is an approach used by

19 ISS in Latin America and Asia, where the global growth really rocketed when the Lessons from ISS company is focusing on expanding in the company gained a fi rm foothold on the ✳ Employ local management, so you can next few years. The growth regions' blos- global service market through a number guarantee that your services are always soming industries need an experienced of acquisitions and expansions. of highest quality and adapted to the workforce to manage practical chal- Becoming a global player takes time, market. There is a balance between lenges. Small local companies cannot and there is nothing stange about that. local fl exibility, tight control and good keep up, but ISS has the experience. Building a company such as ISS can- governance. Taking the world by storm has not not be compared to building a factory – it ✳ Be patient. It takes time to build a large, been easy. Since its humble beginnings is more like building an army. An army international company and it’s about as a security company in 1901, small of service employees. As ISS' existence being settled in one area before moving steps led the later ISS to international depends on its employees doing a great onto the next. success. In the mid- 30s, the company job every time, the company insists on ✳ Be clear about your platform and your employed its fi rst cleaning assistants, delivering all its services using its own skills. Keep a constant eye on how you and in 1943 the company had its fi rst employees. This means that conquering can grow based on your core skills. offi ce outside Danish borders, when new markets also requires additional it founded its subsidiary in Sweden. recruitment, an often lengthy and costly However, international expansion only process but completely necessary. began in earnest in the 1960s and If ISS does not have peace of mind 1970s. In 1989, ISS reached 100,000 themselves, how can they export it to employees and in the 1990s and 2000s, their customers.

Novo Nordisk Persistence pays off

On paper, Novo Nordisk is undoubtedly Nordisk offered up some new products, In brief an export success, but tough competition Eli Lilly had, for a short while, taken their Export share: Over 99 per cent and new growth markets mean that the eyes off the insulin ball to focus on other Turnover: DKK 78.02 billion pharmaceutical group constantly has to products. Novo Nordisk also hired a new Employees (home/abroad): be a fi rst mover. American management team. These three 14,792/19,939. factors paved the way for a breakthrough, Industry: Pharmaceutical Throughout the 1980s and 90s it was which has meant two-fi gured growth rates Founded: 1923 as Nordisk this insulin manufacturer's big ambition for Novo Nordisk in America for more than Insulin laboratorium by August Krogh, to break down the door of the American 10 years. Marie Krogh and Hans Christian market, which competitor Eli Lilly had a One of the secrets of the success in Hagedorn. CEO: Lars Rebien Sørensen. fi rm hold on. It proved diffi cult, even if the America was, in other words, that Novo Bagsværd head offi ce was convinced that Nordisk despite many fruitless attempts breakthrough was just around the corner. never gave up – a persistence that has The company’s senior management were paid off for Novo Nordisk more than once. convinced that the NovoPen produced During the Cold War years, Novo Nord- in 1985, which eased insulin intake for isk supplied insulin products to countries diabetic patients, would penetrate the behind the iron curtain, and even though American market. But that was not the it was sometimes tough getting paid for case. The company only succeeded at the products, Novo Nordisk stuck with this the turn of the century, and the success challenging market. And when the Berlin had several explanations. Just as Novo wall fell in 1989 and the commercial

20 DENMARK’S EXPORT CANON forces blossomed east of the iron curtain, the view should be different. It should be Lessons from Novo Nordisk hospitals remembered Novo Nordisk. like stepping into a Danish factory. ✳ Persistence pays off. Access to new The company was thus exporting both Novo Nordisk belongs to the category markets may require multiple attempts. before and after 1989. But there are still of locomotives and is therefore a classic ✳ Being the fi rst in new markets pays off. new markets to conquer, not least the example of how a company’s internation- growth countries. And here an essential alisation benefi ts Denmark in a number of ✳ Shared basic values enable you to work lesson is that being fi rst on the market ways. While Novo Nordisk earns the ma- cross-nationally with the company’s own share of talents. has enormous advantages. Novo Nordisk jority of its turnover abroad, and thereby has been the fi rst of many countries to has the greatest employment generation penetrate Asia and Africa, while South outside Denmark, the group still employs America has been much trickier, not leat hundreds of people in Denmark every because competitor Eli Lilly was the fi rst year. to arrive. The fi rst-mover effect is something Novo Nordisk is very aware of as is the lesson that shared basic values is an important prerequisite in international markets. In China, Novo Nordisk’s strategy has been a lesson in how Novo Nordisk keeps a close eye on the to move into a market. It was achieved by working with the triple bottom line based on the philosophy “ Chinese government through training programmes for doctors that only by combining the fi nancial, the social and environmental bottom line can and providing information on diabetes.” you create long-term maximum value for Per V. Jenster, Professor shareholders. The shared basic values enable the group to exchange employees between its industries in different countries. For For a pharmaceutical company like example, a fi nancial expert from Novo Nor- Novo Nordisk it is essential to constantly disk can be posted to a new country and develop new products. This means that contribute to the set up there. To ensure every year Novo Nordisk invests around that shared basic values are maintained, 15 per cent of its turnover in research a special 'corps’ travels round the world and development. In addition to this there interviewing local employees to make sure is the Novo Nordisk Fund, which aims to they live up to the Novo Nordisk Way. When strengthen Danish basic research and per- you enter a Novo Nordisk factory in a far- haps pave the way for new ‘blockbusters’ away country such as China or Brazil, only in 20-30 years.

21 DSV Exporting is an export product in itself

In 37 years, 10 drivers became 22,000 a little more complicated. DSV handles In brief employees with a turnover of DKK 40 transport by land, sea and air, they handle Export share: 86 per cent billion. The transport and logistics com- stock and are often responsible for the Turnover: DKK 44.9 billion pany DSV has beneﬁ ted greatly from the majority of the customer’s logistics while Employees (home/abroad): borderless EU. also providing advise on toll rates, harbour 1,980/20,000. areas, local legislation etc. Their areas Industry: Transport They take pride in the good, old-fashioned of business have developed in line with Founded: 1976 by 10 lorry drivers business virtues at DSV’s head ofﬁ ce in a changing world. The former transport CEO: Jens Bjørn Andersen Brøndby. Ever since 10 lorry drivers joined company has become a transport service forces in 1976, the company has worked company, which ensures that goods are to ensure fast transport in competitive effortlessly transported from factory to conditions. It's as simple as that. Success shop. is about constantly improving the com- Expansion really only took off when the pany explains, and they have gradually ac- company’s management decided to look quired 22,000 employees in 75 countries. beyond Denmark’s borders in the 1980s. The basic concept is the same, but Having transported products domestically changes have been implemented along within Denmark and from Denmark to the way. In the mid-1970s DSV’s employ- Germany and Sweden for several years, ees loaded a lorry with customer’s goods the management came up with the idea and brought them from A to B. Now it’s of expanding the business. Everywhere

22 DENMARK’S EXPORT CANON there are goods that need transporting cal logistics companies. Two years later Lessons from DSV from one place to another. So DSV opened the company acquired ABX LOGISTICS, ✳ The industry is constantly developing so offi ces and warehouses in Germany and which saw the company’s turnover rocket companies have to keep up. You cannot Sweden and in an instance turned the towards DKK 48 billion a year. make a one-off product or an eternal act of exporting into the exported goods. Acquisition became an important part business model. Throughout the 1990s DSV’s expansion of DSV’s strategy, but organic growth and ✳ Let new ideas come from the bottom quickly strengthened the company’s a competitive product is still essential up in the organisation. This is where position in the international transport and to business. It requires a constant focus you meet the customers and where you logistics market. on improving working processes, which understand how it works. This is also Size is everything. The more ware- typically come from the bottom of the where the best ideas for improvements houses and offi ces the faster DSV can organisation. If employees who are part come from. react to customers’ needs, and the more of the processes and meeting customres ✳ Buy your competitors, if you can. This seamlessly the transport operates. If one come up with a good idea, they have creates synergies, better revenues and company is responsible for transport and the mandate to try it out. Not everything satisfi ed customers. logistics in all the countries where a cus- should be run from the head offi ce, and tomer has activities,money can be saved not all local offi ces have to look the same. and peace of mind obtained. They must comply with the conditions they Since DSV started exporting, it has fi nd themselves in. However, this does been the company’s ambition to create a not mean that you cannot learn from one transport and logistics network in Europe, another. If an employee in Boston has a which is where DSV is most active. With great idea, the head offi ce in Brøndby will the expansion of the EU towards the try to disperse and adapt it. Success here east at the start of the 00s, this strategy is about limiting bureaucracy and keeping became even more important, because an eye on the transport. 70 per cent of EU’s total production could now be transported unhindered within the same tariff barriers. This enabled DSV to focus heavily on transport and logistics in Europe, as long as they made sure they were present everywhere. While DSV lorries have become a regular feature on Danish DSV has expanded its presence roads, only few know that DSV is much bigger abroad. It is through strategic acquisitions since the “ end of the 1990s. In 2006, DSV bought particularly impressive because the company has achieved the Dutch company Frans Maas, which excellent growth rates in an extremely competitive and price had warehouses and offi ces in Southern fixated market.” and Eastern Europe where DSV had previously been forced to work with lo- Thomas Bustrup, Director of DI

23 24 DENMARK’S EXPORT CANON

The Niche Champions

If big markets are too big to handle, then you need to make an impression in the niche markets by specialising and supplying unique services that no one else can match. Niche champions such as DLF-TRI- FOLIUM, FOSS and Welltec have proven this to be an excellent recipe for growth and success in export markets. Denmark has many niche companies, which are often pulled into action by the large Danish export locomotives or born from existing Danish competence clusters. The best of the best have become world champions in their niche.

DLF-TRIFOLIUM – Through highly effective systems, innovation and acquisitions , the world’s leading grass seed company has conquered 25 per cent of the world market in this niche. Page 28.

FOSS – Through strong partnerships and the development of advanced measuring equipment, the company has found a way into the booming food safety market. Page 29.

Welltec – One of Denmark’s fastest growing companies produces modern robot technology that is currently revolutionising the oil industry. Page 31.

25 “Niche champions have a strong market position that is firmly rooted in products with a high knowledge content and in stable customer relations.”

Philipp J.H. Schröder, Professor at Aarhus University

Experienced Danish export companies all say the same thing; if niche export. The following three stories could easily be trebled, they were to start their export journey today, it would be much because this category is buzzing with hidden success stories. tougher than before. According to INSEAD professors W. Chan A number of the more successful companies began as sub- Kim and Renée Mauborgne this is because that as competition contractors to large Danish groups such as Grundfos, Danfoss grows the waters become increasingly shark-infested, a subject and Vestas. Many have followed big companies out into the world discussed in their strategy book Blue Ocean Strategy. and have then moved on to other and new customers. They believe that by refi ning and honing products and Many of the niche champions also benefi t greatly from joining services, a company can start to supply at world-class level. A clusters consisting of compatible experts within narrow specialist niche strategy enables you to move from crowded waters to a fi elds. Here they become enriched with knowledge and experi- more lucrative blue ocean, where the distance between sharks is ence from other companies within the same knowledge cluster, a little greater, or rather competitors are fewer. such as the wind turbine industry, agriculture, robot technology Danish companies enjoy a strong position in the category and similar powerful Danish clusters. of global niche players. Nearly a fi fth of Denmark’s total export comes from niche products. This places Denmark at the top Future-proof niches among the other European companies providing unique services The three selected companies are DLF-TRIFOLIUM, a global that are hard for others to copy and therefore add a special leader within seeds, FOSS, which supplies advanced measuring competitive advantage. equipment to improve food safety, and Welltec, whose strength Danish niche companies are not only excellent at fi nding lies in robotics that helps the oil industry further utilizing their gaps in the global market, they are equally good at fi lling those drilling facilities. gaps with niche services that carry optimum export value. Ex- All these companies are examples of Danish niche operators amples include enzymes, food, machine parts, iron and steel with a strong platform for further growth. They supply solutions parts and plastic products, all areas that require a high level of to some of the biggest challenges facing the world - from highly knowledge and skill so that companies are not just competing advanced seed production and safer food to better resource on price alone. uitlization, enabling us all to live for less.

Many wagons behind the locomotives Hidden world champions The candidates for this category of strong and growing exports In addition to the three companies already mentioned, this par- are plentiful. The three companies presented here were selected ticularly category is bulging with small and medium-sized niche because they represent three very different ﬁ elds of Danish players, which would only really be known to the Danes if they

26 DENMARK’S EXPORT CANON

“The niche champions are the invisible backbone in Denmark's connection to the rest of the world.”

Philipp J.H. Schröder, Professor at Aarhus University

happened to live nearby or actually work for these companies the sharpest in the world is still a must, even in a small niche themselves. This is because these companies sell nearly all their market. In- and outsourcing are constant requirements, and pro- services to customers outside Denmark’s borders. And the cus- ductivity must be improved on an ongoing basis to keep quality tomers are typically other companies using the niche products high and prices low. in their own production. An example of one such hidden world Development of new strong niche players places speciﬁ c champion is AVK Gummi in East Jutland. The company produces demands on investment in innovation and productivity improve- packaging for the food industry, among others. ments in Denmark. This is essential in ensuring that the strong It has a strong foothold in the US, because the packaging clusters based in Denmark remain strong and that the niche meets the stringent requirements imposed by American au- companies continue to attract the talent what will carry them thorities on production in the food industry. It is AVK’s specialist further from their Danish base and out into the export markets. knowledge of these very speciﬁ c requirements and standards that gets their products chosen by big customers all over the world.

Small and light Danish niche players are selected by large foreign customers over larger, better known competitors. The Danish niche operator tends to win the business because it can do something the big guys cannot. They are often more ﬂ exible and are able to quickly adapt to the customer's way of working. It may very well be that a large French or German competitor has ten ﬁ nished solutions in stock, but the little Danish niche operator wins the order because the company can enter into a close partnership with the customer to deliver a bespoke solution. Sales people in Danish niche companies often have a technical background, which makes them well-equipped to meet the customer and understand the problem the customer needs solved. However, even if the future looks bright for niche champions, the ability to constantly adapt and change and to remain among

27 DLF-TRIFOLIUM World champions in grass

DLF-TRIFOLIUM is a leader in the global It is important for DLF-TRIFOLEUM In brief market within the specialist niche of to be part of these prestigious events, Export share: 85 per cent grass seeds. The company has supplied as they represent an accolade, which is Turnover: DKK 2.5 billion grass seeds for prestigious events such crucial for the company to be among the Employees (home/abroad): Approx. 250- as the World Cup in South Africa in 2010 world’s best at developing new types of 400 and the 2012 London Olympics. turf. Industry: Agriculture Founded: 1906, DLF AmbA founded by According to the company , the secret Danish farmers. 1989, DLF-TRIFOLIUM When the World Cup fi nal was played behind DLF-TRIFOLIUM's success is CEO: Truels Damsgaard between Spain and Holland at Soccer research and development. One in ten of City in Johannesburg in South Africa on the company's approx. 650 employees July 11th 2010, the turf on the pitch only have one focus: to refi ne the different Lessons from DLF-TRIFOLIUM had already been thoroughly tested. But grass types, so they acquire the proper- ✳ Large volumes and an effective despite seven matches on the same turf ties demanded by different customer production apparatus enable niche during the preceeding month, it survived. groups. And we are not just talking football players to compete in the world market Gone are the old memories of tired pitches, tennis courts and golf courses from a base in Denmark. football pitches full of clumps and yellow- here, but also DLF TRIFOLIUM’s two other ✳ Increase volumes by active and ongoing ing grass, and an important reason for business areas: forage grass for farming participation as part of a consolidation this originates in Denmark. and turf for standard residential gardens. wave. The seeds for the hard-wearing pitch Each area requires something specifi c. ✳ Stay close to your markets – test it in in Johannesburg were developed and For sports you need durable pitches that collaboration with customers. supplied by the Danish seed-growing also look nice. In Europe, pitches are typi- company DLF-TRIFOLIUM, which in recent cally lighter than in America, where they years has experienced rapid growth and prefer darker shades. In addition to the currently enjoys a 50 per cent market specifi c grass properties comes adapting share in Europe and a 25 per cent market to the climate of individual countries. share globally. They also supply prestig- In damp and warm climates, the risk of ious major sporting events such as the disease increases, which is why it is also London 2012 Olympics. important that DLF-TRIFOLIUM maintains

28 DENMARK’S EXPORT CANON a presence in the global market. As an example, DLF-TRIFOLIUM has been researching grass types suitable for Bra- DLF has understood how to translate the knowledge zilian pitches long before the actual World and expertise built up over many years in the domestic Cup takes place there in 2014. “ market to suit the international markets.” There is less focus on colour and more focus on the nutrient content of seeds for Philipp J.H. Schröder, Professor at Aarhus University the farming sector. With regard to garden turf seeds for private garden owners, packaging and just-in-time delivery are the important factors. major player, however, it is possible to The fact that DLF-TRIFOLIUM has streamline seed production and thereby reached the point where it can call itself reduce unit costs. Equally, DLF-TRIFOLIM one of the world’s leading grass seed has invested signifi cant sums of money in companies is down to an ambitious group highly effective systems. DLF-TRIFOLIUM of owners in the form of Danish seed grow- is therefore able to produce more effi - ers. In the last 20-30 years, the sector ciently than many of the local and smaller has been marked by acquisitions, fi rst in a players competing in global markets, Danish and later a European wave. During which in turn enables the company to this time, it was always DLF-TRIFOLIUM's retain its base in Denmark. ambition to remain a Danish company. The future is also about continued Acquisitions have brought the group growth, including further acquisitions. both new sales offi ces around the world The company recently entered the and access to so-called gene pools. It North American market through its ac- typically takes 10 years to develop new quisition of Pickseed, a North American grass seed products, so acquisitions market leader within processing, produc- have brought about short-cuts to a wide tion, sales and distribution of seeds for range of new types of grass seed, which garden turf and forage crops. With similar DLF-TRIFOLIUM has been able to work growth ambitions, DLF TRIFOLIUM is with in various combinations. working on building an even bigger base And today, volume is espeically impor- outside Europe. With the North American tant, as providing huge volumes enables acquisition, DLF-TRIFOLIUM’s share of the the company to compete internationally, global market for grass seeds has risen to where salaries are typically lower . As a 25 per cent

FOSS Innovation and partnerships drive growth

An international outlook, close customer equipment for measuring and making Backed by the excellent reputation of collaboration and heavy research is the food products safe, from raw materials to Danish farming, FOSS has gained access recipe for FOSS’s export success. ready-meals. The company is sprung from to customers all over the world, mainly in a Danish tradition of high quality farm the food industry. FOSS provides solutions Niche manufacturer FOSS produces produce and a high level of food safety. for the world’s biggest food companies

29 including as Cargill, Kraft and Arla Foods. world’s biggest challenges, one that is only In brief But the company has also generated cus- likely to get bigger: more and more people Export share: 98 per cent tomers within other industries, such as the will demand better use of raw materials Turnover: DKK 1.74 billion pharmaceutical and chemical industries. and safer products. But this potential can Employees (home/abroad): 400/870 Curetly, the company has subsidaries only be turned into business if the niche Industry: Analysis equipment in 28 countries. According to the rationale company constantly remains at the fore Founded: 1956 by Nils Foss within FOSS, it is essential for a niche , providing the latest and best services CEO: Torben Ladegaard company to stay close to its customers suited to customer requirements staying and the markets where the company’s one step ahead of the growing troops of in- products have to perform in practice. Only ternational and local competitors. FOSS’s Lessons from FOSS around 15 per cent of FOSS’ turnover growth strategy is therefore to enter ✳ The narrower the niche, the wider the comes from agent sales. into close partnerships with the biggest customer base has to be. Until a few years ago, Europe was the customers to develop the right products. ✳ 10 per cent of every DKK earned is biggest market for FOSS. But in the crisis In China, FOSS has worked closely with spent on developing new products. If aftermath, the company invested heavily Arla Foods more than two years to ensure you want to be the leader in your niche in growth markets, fi rstly by starting its quality and health in Chinese raw milk. A market, you have to invest in it. own company in China, focues on both research and development partnership ✳ Develop aclose relationship with big development and production, and then in that still requires many years of work customers and use it as a stepping stone India and Brazil, countries that all have a before the right solutions are ready. to new markets. They will give you access high demand for safe food products. Working closely with big customers to knowledge and customers you would As a result of these investments, enables FOSS to both learn and get a not reach otherwise. the US is currently the biggest buyer of foothold in new markets. Previously the ✳ Having subsidiary in China, has enabled measuring equipment from FOSS, closely farming and food sector was character- the FOSS to develop and produce spe- followed by China. Europe and the Mid- ized by national laws, protection and state cifi cally for this large market. Innovation dle East secure a third of the company's schemes. This meant that FOSS had to be born in China can become the source of turnover, as does the rest of Asia as well familiar with the local conditions in all its innovation globally. as North and South America. markets. But today, FOSS’ customers are Four years ago, the anticipation of a far more globalised and work internation- large demand for healthy and safe food ally, which is why close partnerships with products in China made FOSS invest in key customers became signifi cant for the production and development targeted at growth strategy. the Chinese market. This investment has FOSS invests heavily in research and already paid off today. development. 200 employees out of a However, it has also increased the total workforce of 1,200 work on research company's innovation power globally, as and development, and one tenth of each Chinese solutions are now sold all over the DKK that FOSS earns is spent on product rest of the world. development. In general, FOSS will sell the same standard equipment all over the world, but it can be adapted to local conditions. However, with markets the size of India and China, this tradition is currently being broken, and instead products are being specifi cally developed in each of the two countries for the market they are being sold to. FOSS can maintan a high level of product development by FOSS was born international. When staying in close contact with customers. This distances com- it was founded in 1956, the company “ petitors and secures their own market position.” already had its eye on exporting. In a narrow niche you have to consider the whole Philipp J.H. Schröder, Professor at Aarhus University world as your market, as the saying goes at FOSS. The company currently benefi ts from its ability to deliver solutions to one of ´the

30 DENMARK’S EXPORT CANON

Welltec A crucial niche in the big oil industry

Danish robot technology is worth its fi cient if the company wanted to compete In brief weight in gold for the big oil companies. in the international market that is the oil Export share: Over 99 per cent Welltec from Allerød has offi ces in 27 industry. Many oil companies prefer to Turnover: DKK 1.7 billion countries, and the market just keeps on work with local companies. Politics also Employees (home/abroad): 355/689. growing. plays a part here as oil companies in many Industry: Oil and gas respects are dependent on whether the Founded: 1994 by Jørgen Hallunfbæk In the oil industry everything is big. Big country’s politicians allow them to extract CEO: Jørgen Hallundbæk companies, big costs, big machines. oil from the ground. They require service Welltec is comparatively small and it bases suppliers with a local presence, a solid its services on precision tools with robot network, a strong commitment, and that Lessons from Welltec technology, the signifi cance of which is are professional as well as helpful in de- ✳ Create value for your customers, and enormous for the world’s oil companies. veloping employment in the host country. treat everyone the same so they come They save billions by using this North Having many offi ces close to the market back. Small customers might be tomor- Zealand company’s technology to help has paid off. Welltec recruits locally and row's big customers. them get as much as they can from their has broken the cultural barriers that many ✳ Do not enter unresearched markets, oil fi elds in a fast, easy and reliable way. Danish export companies usually struggle because then it becomes about winning Thanks to the Well Tractor, the com- with when venturing onto the world stage. market share and this is both diffi cult pany has become a serious player in the Figures speak for themselves. Since and counter-productive. Create your industry. The Well Tractor is a remote- the fi nancial crisis began, Welltec has own markets instead and make them controlled robot that transports interven- increased its avarage annual turnover by grow. tion tools to the horizontal areas of the more than 30 per cent. In the company’s ✳ Adapt to your customers’ wishes. If this well, which has made it easier and much own words, its success is down to a com- means having a local presence, set up cheaper to service oil wells. bination of the ability to quickly develop offi ces in the markets you want to work Before, if a valve got stuck in an oil solutions to customers’ problems, high in. This shows you are serious and it is well, you would have to set up a system quality services and a technological abil- appreciated by the customers. It also the size as the oil drilling platform itself, ity; all attributes which have won Welltec helps break down cultural barriers that to solve the problem. The same applied if several industry awards. The company’s could otherwise Inhibit your growth. you wanted to measure the well to fi nd out philosophy is based on constantly pushing how to extract more oil. This complicated boundaries to their limits. and time-consuming process would cost several hundred thousand dollars a day. But today, all you have to do is send out a helicopter with Welltec’s equipment. The idea came from Welltec’s founder, Jørgen Hallundbæk, when as an engineer- Welltec proves that even the most brilliant technical solutions ing student he became convinced that op- cannot stand alone. Controlling your distribution channels and erations in oil wells could be more effi cient “ having a local presence are essential competitive parameters.” and safe. That was back in the 1980s, and he was right. Today, the company has 62 Philipp J.H. Schröder, Professor at Aarhus University offi ces in 27 countries and employs more than 1,000 people. It quickly dawned on Welltec that its headquarters in Allerød would not be suf-

31 32 DENMARK’S EXPORT CANON

The Merchants

Agile and price conscious merchants and talented retailers who satisfy customer needs are central to Danish export DNA. BESTSELLER became the retail chain with the most shops in the world, thanks to its strong business acumen, but Denmark also boasts many other export companies that stand out in this discipline and indeed in other industries, including Danske Commodities in energy trading and NOVASOL within the tourist industry. The mercantile culture is changing, which places new demands on Denmark's new generation of merchants. The best of them show how to create global export successes on the back of good business acumen.

BESTSELLER – The fashion group with numerous successful brands has conquered the world, and shows that outsourcing Danish textile jobs could be the start of a new export adventure. Page 36.

NOVASOL – Rental of classic Danish holiday homes by the North Sea upsized and became an international rental concept with millions of bookings. Page 38.

Danske Commodities – One of Denmark’s fastest growing companies in recent years became a first mover in the booming energy trade market. Page 40.

33 “Denmark boasts a number of excellent examples of companies that understand how to develop trade and service concepts. With Denmark as their base these companies have proven very successful in export markets. It has been difficult to select overall winners from such a strong category.”

Christian T. Ingemann, Director of The Danish Chamber of Commerce

By the end of 2013, the Danish owner of the visible Danish of their business DNA. Successes span the category’s ancestor, brands and brand group BESTSELLER, expects to have opened Lars Larsen, who founded JYSK and who asks all job applicants store number 10,000. In China alone, BESTSELLER Fashion about their best recent sale, and the fashion group BESTSELLER, Group China has over 6000 stores, which the family-owned com- who actually began exporting before Lars Larsen and who refers pany runs in collaboration with the team behind BESTSELLER in to its employees as ‘merchants’. China. The enormous growth in international markets has been Common to exporting merchants is also the fact that the driven by the BESTSELLER DNA: doing good business. The Danes companies manage to combine strong concepts that survive are good at trading. Not just in Mid and East Jutland, where many internationally, with an ability to quickly scale the business up or of the country’s most successful merchants come from, but also down, while maintaining fl exibly and agility as well as being able beyond the Danish borders. to revert to the original core business in the local market. The specifi c Danish approach to business acumen founded on a deal being of benefi t to both parties. In Denmark a suc- The future merchant cessful merchant is someone who can make deals that build on Danish merchants with export success also reveal an ability to long-term relationships and reciprocity as opposed to someone adapt as the traditional role of the merchant is changing. During who makes a quick deal, where the other party is pressured into the recent crisis companies with physical stores at expensive selling at such a low price that the relationship dies alongside addresses around the world began to feel the pressure. Many the supplier. have closed because the bank refused to lend them more money Success is also about being driven by the process to do a good for investments. Meanwhile, sales have plummeted in many deal, like the founder of Danske Commodities, Henrik Lind, who markets. But rather than folding, successful merchants have by defi nition considers any price too high the fi rst time around. managed to practice their craft in new ways. Buy cheap and sell dear. But do it properly so that both seller and BESTSELLER practices business acumen in all links of the buyer want to do business again, which is how NOVASOL oper- production chain by optimising each link and by focusing on the ates, a tourist company that sells services abroad. part of the chain where value creation is biggest. Energy traders However, despite having a great base for exporting Danish in Danske Commodities sell energy services to business custom- products abroad, only a limited number of Danish merchants ers all over Europe. In just nine years, the company has grown to have dared to cross the country’s borders. According to Retail more than 350 employees in 31 countries with the potential to Institute Scandinavia, only 71 out of 261 Danish retail chains go global. have shops outside Denmark. The merchants have also reinvented the wqu they interact Only a few of Denmark’s retailers have penetrated the im- with their customers. This applies to Danish holiday home rental portant markets in neighbouring countries. Fewer still are to be NOVASOL, who thanks to its online rental of holiday homes across found in Europe. Only a very limited number of Danish retailers Europe is one of the biggest in its fi eld. And even for traditional have successfully exported to growth markets as far away as retailers such as JYSK and BESTSELLER, who have otherwise China, for example. invested heavily in physical stores, their shops are only one of many platforms where they meet customers and build relation- The agile merchant ships. According to the report Global Powers of Retailing 2013 Common to all those who have succeeded outside Denmark’s from Deloitte, approx. fi ve per cent of retail sales to consumers borders are their strong business acumen, a fundamental part are done via a smartphone or tablet. In just three years’ time

34 DENMARK’S EXPORT CANON

“When we chose BESTSELLER, NOVASOL and Danske Commodities, it was because - each of them represented the best of Danish retail tradition. It is not just about buying cheap and selling at a high margin. Far more important are product innovation, service and physical presence in growth markets.”

Christian T. Ingemann, Director of The Danish Chamber of Commerce

sales over mobile units will represent 20 per cent of total retail in the west, and so the clothes on the hangers in Brande differ sales. Studies show that customers who buy products via an app from those in Beijing. are more likely to come back and buy more than if they visited a physical store. Merchant culture Even if the merchant’s tool box is changing, successful retailing The digital merchant outside Denmark is still about maintaining and practicing the From now on, retail trade will be less about being the ﬁ rst to retail approach in all areas of the production chain and within the secure the best address and ensuring there is enough money in company organisation. the bank to establish you physical business in the right place. Danish merchants and retailers who achieve success outside World class retail trade is about spotting new IT solutions and Denmark are often characterised by having a strong owner or integrating them as quickly as possible, so that you can follow founder who has made business acumen an essential part of markets and trends closely or use the data from online pur- the company’s culture, regardless of how big or remotely it is chases to strengthen customer relations, regardless of whether practiced today. Common to the three export successes in this you meet the customers virtually or in a store. In principle, the category is that this strong business culture is practiced by all retailer is now able to meet the customer wherever and whenever employees. Good business acumen is not just about buying they want. cheap and selling dear, but is much more about product innova- This will challenge the merchants’ employment strategies. tion, service provisions and physical presence in growth markets. The future shop assistant must be IT-savv, able to ulitize new technologies and be a strong provider of service before, during and after the sale, regardless of whether the meeting is physical or virtual.

Sharper competition Danish merchants with a strong foothold outside Denmark all claim that the competition is becoming sharper and more intense. BESTSELLER, who was among the ﬁ rst Western textile companies to break through to the adult Chinese middle class, has now been joined by bigger and stronger competitors, including Swedish H&M. While sales have come down in a number of traditional European markets, everyone is heading to where the growth is. However, a strong concept will not in itself guarantee success. Many have tried in vain in China, by way of example, but they for- got to adapt the concept to local preferences, whereas one of the reasons for the BESTSELLER Fashion Group's success in China is due to the fact that the clothes were designed speciﬁ cally for the Chinese, with more pearls and sequins than they would use

35 BESTSELLER Timing is everything

The Danish-owned fashion brands from value chain and their aim is to become In brief BESTSELLER are currently more visible the best at optimising all links. Effective Export share: 92 per cent on the world’s high streets than Swedish and optimum logistics count when moving Turnover: DKK 18.2 billion Hennes & Mauritz and Spanish Zara. goods from factory to shop. You also have Employees (home/abroad): Approx.. to know when to close a deal rather than 3.300/15.000. Part of the secret behind the successful continue negotiating for what will be just a Industry: Fashion fashion company from central Jutland few extra pennies worth of proﬁ t. Founded: Troels Holch Povlsen and is located in family ownership and a Today BESTSELLER manufactures Merete Bech Povlsen rootedness in the fundamental value that in ﬁ ve countries: India, Turkey, China, CEO and owner: Anders Holch Povlsen good business acumen equals long-term Bangladesh and Italy. However, the close Note: The independent BESTSELLER relationships and reciprocal partnerships. relations cover the entire value chain, Fashion Group China has 50,000 employ- BESTSELLER has been working with the including the stores in 45 different coun- ees and was founded by its two CEOs, same suppliers for many years, some as tries. They are BESTSELLER’s customers Allan Warburg and Dan Friis in collabora- many as 30 years, and many have grown and they receive support when deciding tion with Troels Holch Povlsen. alongside the company. what to buy. The partnership involves BESTSELLER has never owned its BESTSELLER taking on part of the work own factories. Since the company was and responsibility that would normally founded, it stood out because it imported lie with the store or supplier. When the its products from all over the world; now partner’s store is running optimally, it is considered common practice within the also good business for BESTSELLER. fashion industry. The scope of a global company’s The company’s competitive advan- responsibility for other links in the value tage has since developed. BESTSELLER chain were well and truly tested when in maximizes gains from being last in the the spring 2013 when a factory building in

36 DENMARK’S EXPORT CANON

Bangladesh burnt down, killing more than Mauritz are in the process of catching up. Lessons from BESTSELLER a thousand textile workers. The factory However, BESTSELLER Fashion Group ✳ Build close long-term relationships with was not a BESTSELLER subcontractor, but China’s head start is substantial: With suppliers and customers. the accident meant that the fashion stores in more than 300 Chinese towns, ✳ Adapt to local conditions. industry now has to take greater responsi- it was one of the fi rst Western clothing bility for the working conditio0ns of textile brands that appealed to the adult middle ✳ Remember your values wherever you are in the world workers. A responsibility that is growing in classes of China’s provincial towns. line with the fashion industry collaborat- The road to the Chinese wardrobe ing with countries in which production is has not been about delivering the same cheap, including Cambodia, Vietnam and products you fi nd on the shelves in Danish the African continent. shops. In fact only the brand name and BESTSELLER has no specifi c plans to marketing material retain a connection start manufacturing in new countries. The with the parent company. Everything cost of being in a country where labour is from design to management and logistics cheap is that responsibility increases for has been developed within the Chinese a company like BESTSELLER. Here, being branch of the business. Success in China a good retailer entails striking a balance requires adaptation to local style and between low prices and feeling good taste, and Chinese clothes have far more about what you do. sequins, pearls and buttons than Danish 6,100 of the many BESTSELLER stores ones. are based in China and have been set up by the independent company BESTSELLER Fashion Group China. Here the Danish fashion brands have grown exponen- tially ever since the two managers behind China’s success story, Allan Warburg and Dan Friis entered into a partnership with BESTSELLER's founder Troels Holch Pov- BESTSELLER’s flair for good business acumen has secured lsen in 1996 to explore this virgin growth the Danish company a strong position in the value chain where market . “ Sales fi gures from the Chinese busi- value creation is at its greatest. BESTSELLER is currently the ness have not been published, but BEST- clothing retail chain with the most shops in the world.” SELLER’s clothing brands have made their mark on China, leaving their competitors Christian T. Ingemann, Director of The Danish Chamber of Commerce far behind. But brands such as Hennes &

37 NOVASOL The Danish holiday home model wins the day

Holiday home rental. It does not really Frederik IX’s Honorary Award in 2013. In brief sound like something you would export, Their special feature has been Export share: 55 per cent but this is exactly what major tourism standardizing the unique. No two holiday Turnover: DKK 1.75 billion company NOVASOL does in more than 26 homes are the same, because each home Employees (home/abroad): 290/230 European countries. Not owning a single bears the mark of its owner. Regardless Industry: Tourism holiday home of its own, the company has of whether guests are from Aarhus, Ham- Founded: 1968 by Frederik Heegaard an annual turnover of nearly DKK 2 billion. burg or Vienna, they will experience each CEO: Jan Haapanen home differently. Through its own ranking NOVASOL refers to its business model as system and standard descriptions of each the Danish holiday home model, in other holiday home, NOVASOL has made it easy words, subletting private holiday homes. for holiday makers all over Europe to know Guests enjoy unique holiday homes what they are getting no matter which instead of boring standard houses, and country they are in. NOVASOL has been owners avoid having to think about con- renting out holiday homes since 1968, but tracts, keys and cleaning. they stayed mainly in Denmark for the ﬁ rst NOVASOL offer more than 32,000 few years. However, after the Berlin wall holiday homes for rent and the company came down in 1989, the Danish rental has local ofﬁ ces in 26 countries. Each company had the opportunity to change year NOVASOL organizes 12 million over- its status to that of an exporting company. night stays in its holiday homes on the Western Europe proved impossible to pen- continent. etrate as NOVASOL did not have the funds This service won the company the King to take on the big companies that already

38 DENMARK’S EXPORT CANON covered most of the market. Former East- customers ask for something specifi c, the Lessons from NOVASOL ern Europe was exciting for rich Western company tries to adapt products, and the ✳ Unless you are big enough you cannot Europeans and no onehad yet laid claim employees' close contact with both home penetrate the big markets; you have to this tourism market. NOVASOL opened owners and customers have enabled them to wait for an opening in the smaller offi ces in Berlin at the start of 1990, a few to constantly correct any defi ciencies and markets and grow big from there. months following the fall of the wall. improve the overall product. ✳ If your product becomes more stand- The German head offi ce contacted For example, a couple of years ago NO- ardised, costs will not escalate for each German families who owned holiday VASOL received a number of complaints new market you enter. So stay focused homes, which proved to be a very profi t- about a fi shy smell in some of the Swedish on what you do, and do not spread able business for both the home owners holiday homes. The cottages were popular yourself too thinly on other business and for NOVASOL. Tourists fl ocked to with amateur fi shermen who wanted to models. the newly discovered part of Europe and fi sh in peace. The problem was that they ✳ Added experiences equal added sales, many Eastern Europeans rented holiday often gutted and stored the fi sh indoors. even if they do not put money directly homes along the North Sea coast. When The company managed to persuade in your purse. You retain customers by the Soviet Union collapsed in 1991, NOV- several of the owners to get outdoor offering something extra they will not ASOL continued eastwards and in recent gutting stations and running water. It get anywhere else. years, the company has fi nally become big appears the fi shing season precedes the ✳ Look for opportunities in customers’ enough to look to the markets in Western holiday season, and so a completely new complaints and develop your product Europe as well. The concept is universal. market opened up. Home owners and according to demand and opportunities. All tourists want an authentic experience and plenty of space. And there are always people who have holiday homes they want to sublet. NOVASOL is one of many examples of Danish tourism companies contributing to NOVASOL’s holiday home rental concept is a good example of Denmark’s balance of payments. Tourism the opportunities in Danish service export. The company has in Denmark has an annual turnover of DKK “ expanded its concept to new markets and is a huge success, 80 billion and employs around 120,000 people. The tourism business does not not just in Denmark but in the rest of Europe as well.” export products in the classic sense, but Christian T. Ingemann, Director of The Danish Chamber of Commerce sells services to tourists for more than DKK 30 billion, drawing foreign currency into Denmark. NOVASOL has done more than just upscale the Danish rental concept to an international success. From day one the company has developed the NOVASOL acquired a new peak season, link between tenant and landlord. The and the amateur fi shermen got the right concept is constantly enhanced and equipment. NOVASOL constantly works expanded through new partnerships and in this way to develop both the product added experiences. Families renting a and the concept, allowing the company to holiday home near Billund get discount continue to expand its number of holiday tickets to Legoland, and Arla has been homes in different countries. known to open up its dairy facilities al- This growth also affects the local busi- lowing city-children a glimpse of proper ness community. Calculations show that farming methods. However, the company every holiday home NOVASOL sublets in has always retained its core business of Denmark brings an increased turnover of holiday rentals and has not diversifi ed into DKK 300,000 to the local area. NOVASOL a holiday park or travel agent. NOVASOL therefore aids the survival of local areas also helps holiday home owners make that might otherwise suffer. This is also their homes more attractive. When part of the Danish holiday home model.

39 Danske Commodities Traders in energy

The good deal drives growth in Danske Nordal Clausen and a professional board In brief Commodities. A driving force that has of directors. Export share: 87 per cent secured the company a DKK 9 billion In simple terms, Danske Commodities Turnover: DKK 9.3 billion turnover in less than 10 years. is about buying energy and exporting Employees (home/abroad): 336/14 rights at the lowest possible price – and Industry: Energy shares More than 87 per cent of Danske Com- then selling them at the highest possible Founded: 2004 by Henrik Lind modities’ energy sales come from sales price, enabling customers to buy it at a CEO: Torben Nordal Clausen abroad. Danske Commodities trades in reasonable price. This is a model that Globalisation factor: In 2004, Danske 31 countries, and they are in the process Danske Commodities is able to roll out Commodities were only present in Denmark and Germany. Today they are of establishing new subsidiaries in an in- in all the countries that have cables for present in 31 countries creasing number of countries. The Aarhus transporting energy and a liberalised ofﬁ ce now boasts 26 different nationali- energy market. The lever for a continued ties among its 350 employees. prosperous niche market is to do business The secret behind the company’s suc- that complies with politicians’ vision of cess outside Denmark can be explained green energy and a more effective energy in one word: acumen. Founder Henrik Lind consumption. once said that his ﬁ rst reaction to any Danske Commodities was born into an price is that it it is too high. Henrik Lind energy market, which is among the most founded the company in this spirit. The transparent in the world with plenty of company is driven by 'the good deal' and data for the company to build its business has consequently grown into a major cor- on. It has been a tough environment to porate business, managed by CEO Torben grow up in according to the CEO, because

40 DENMARK’S EXPORT CANON everything in this market is open. However, listen to customers in individual markets. Lessons from Danske Commodities this upbringing has equipped Danske Com- Danske Commodities must constantly ✳ It takes time to get close to your custom- modities to make some strong deals in a adapt to individual markets, not the other ers when you are fi rst on the market. line of business that is still in its infancy in way around. However, as a pioneer the advantage is large parts of Europe, and in which Danske Even though they work quickly in being that one step ahead. Commodities is a pioneer. In 2011, the Danske Commodities, setting up abroad ✳ Have a set plan for penetrating new company adopted the strategy that growth is not carried out by others but by setting markets and adapt it to individual should be instigated from abroad. up the company's own subsidiaries or markets. Being a fi rst mover in a new market departments. Employees with local knowl- ✳ Make sure you recruit employees requires tough legwork in close proximity edge are hired, but everyone is trained in familiar with local conditions, language, to your customers. However, the company Aarhus, because company culture must culture etc. In a company with high is almost the only player in an industry not be transferred – even at a fast pace. growth it is important that all employees easily penetrated by competitors. Having your own people abroad is part work according to the company’s basic Danske Commodities’ strategy for of the growth strategy of getting closer values, regardless of physical location. approaching new markets is the same to customers and deeper into individual ✳ Danske Commodities recruits students regardless of the market. To begin with, markets. and graduates directly from universities the country is assessed according to a The Aarhus company is so busy explor- and colleges. They start as trainees and meticulous template. If the country still ing the European potential for growth that many go on to permanent positions. appears to be a good business opportunity they have yet to focus on mature markets This is how the company recruits a wide someone is given full responsibility for de- such as the US. Instead, Danske Com- variety of international skills. veloping sales in that country. That person modities wants to grow by reaching even can draw on all the company’s skills within more neighbouring markets. Germany is fi nance, marketing and risk management, currently the biggest market, but South- including experiences gained from other ern and Eastern Europe is also growing. countries. In additiondtion to geographical growth, Success is also about having a certain Danske Commodities also needs to reach mindset, as CEO Henrik Lind terms it. You more customers, and sell more products need to stay humble, remain fl exible and and services.

In just a few years Danske Commodities has achieved “ impressive results within energy trading. The company is an excellent example of how newer Danish companies can grow through exports.”

Christian T. Ingemann, Director of The Danish Chamber of Commerce

41 42 DENMARK’S EXPORT CANON

The Green Front Runners

Denmark has a historically strong foundation for turning sustainable 'green solutions' into a core pil- lar of Danish export. Green Front Runners such as Grundfos, Novozymes, Haldor Topsøe and Sie- mens Wind Power are examples of Denmark’s broad and solid competence cluster in the global growth market for sustainable technologies and services. Within the EU, Denmark’s export growth in green energy technology is already right at the top. More and more countries and companies demand the resource-effective solutions supplied by these green front runners.

Grundfos – This highly ambitious and constantly innovative pump company from Bjerringbro has overtaken many of its competitors in the global market. Page 46.

Novozymes – An internationally leading company within bio innovation combined with enzymes, Novozymes helps reduce carbon emissions by millions of tonnes for customers across the globe. Page 47.

Siemens Wind Power – Danish wind competence combined with the German art of engineering and German capital has made Siemens Wind Power one of the world's leading suppliers of offshore wind farms. Page 49.

Haldor Topsøe – Almost half the world's fertilizer is produced by factories using Haldor Topsøe’s catalysts to save energy. Page 50.

43 “ Denmark is a global sustainability icon. Companies have used this unique opportunity as a lever.”

Helle Søholt, CEO of Gehl Architects

The ability to simultaneously set ambitious climate, energy and 2007 and it is expected to more than double this fi gure by 2025, environmental targets while also maintaining a position as one of amounting to a total of EUR 4 billion. the world's most competitive nations has placed Denmark as an Danish companies have a unique opportunity to get a share international benchmark for conversions to green energy. When of this growth. The energy crises of the 1970s prepared many of countries such as China, Japan, Korea and the US need inspira- these companies for stringent environmental and energy require- tion for sustainable town planning, integration of sustainable en- ments and have enabled them to spot the enormous fi nancial ergy technology and energy systems, or solutions to reduce their benefi ts of developing improved environmental and energy- resource consumption, they often turn to Denmark. One such effi cient solutions. example is the Chinese wind turbine company Envision Energy However it was not until the millennium, with its constant that decided to place its development department in Denmark global focus on climate change and a growing consensus on the simply because of the country’s expertise in this area. need to limit man-made carbon emissions, that the market really Denmark not only offers one of the world's most ambitious took off. energy and climate plans with targets such as the complete elimi- When Denmark hosted the UN Climate Summit COP15 in nation of the use of fossil fuels in the energy and transport sector 2009, it won the attention of far-away countries who turned to and of Copenhagen becoming the world’s fi rst carbon neutral Denmark for inspiration and solutions. Denmark was given the capital, it also boasts a long line of companies, such as Danfoss, opportunity to tell its own story about how it was one of the few Grundfos, Vestas, Velux, Novozymes and Rockwool, which have nations in the industrialised world that had managed to discon- understood how to use these ambitious targets and conditions nect its energy consumption from its economic growth. as a platform for developing state-of-the-art environmental and For over 30 years Denmark has, via ambitious energy sav- energy-effi cient solutions. And these are just the big companies. ing plans and behaviour-changing environmental legislation, A long line of sub-contractors follow these locomotives within the succeeded in keeping its domestic energy consumption level, green segment; Resolux, which supplies light fi ttings for wind while the economy has grown by over 75 per cent. Meanwhile, turbines, and Aluwind, which supplies aluminium installations Denmark also uses the more wind power as part of its energy for the wind turbines’ internal parts share the same ambitious system than any other country in the world. targets. Leading the way in green export growth within the EU Denmark ready for cleantech-boom That story put Denmark on the map once and for all as a global Denmark also supplies solutions for which there is an ever source of inspiration for convertions to green solutions. The coun- increasing demand. The global market for cleantech products try has also contributed to environmental and energy-effi cient is enjoying rapid growth. According to consultancy fi rm Roland technology becoming one of the fastest growing export areas. In Berger, this market has grown by almost 12 per cent a year since 2012, Denmark’s export of energy technology amounted to more

44 DENMARK’S EXPORT CANON

“ A shared feature of the four companies in this category is the fact that they have not developed products for a Danish market, but have understood that the market is fluid and global just like the environment they want to improve.”

Helle Søholt, CEO of Gehl Architects

than DKK 61 billion. This represents 10 per cent of Denmark’s most other companies were struggling just to retain their market total exports and makes it the EU country where the energy tech- share, Siemens Wind Power managed to increase its exports nology share of total exports is the highest. Measured over the from just under DKK 12 billion in 2008 to DKK 16 billion in 2010, last ten years, Denmark has demonstrated the biggest growth an achievement that last year won the comapny the King Frederik in the export of green energy technology among EU countries. IXths Honorary Award for export. Since 2002, the export of green energy technology has grown from just below DKK 7 billion to approx. DKK 32 billion. Danish Exporting resource efficiency export of green energy technology is currently 14 per cent greater Sustainable energy technology is far from the only Danish green than export of other energy technology. Fossil energy technology solutions to have achieved success in export markets. Generally still remains the biggest export for other EU countries. speaking, the Danes’ historical and cultural understanding of In addition to the export of products, we now witness an in- energy, environment and sustainability has led to the develop- creased export of green services as well. Consultant engineering ment of fundamental skills, which companies in almost every companies such as COPW and Rambøll utilize the green knowl- industry have managed to turn into a competitive advantage in edge base as part of their efforts to achieve an increased share global export markets, which is also true of other companies that of international customers. Danish architect fi rms are also using form part of the green category in Denmark’s new export canon. this particularly green base in international markets. Solutions from Grundfos, Novozymes and Haldor Topsøe help customers become more environmentally concious and resource Wind power drives green export effi cient. And this is a strong sales argument in a world where The green export success in energy technology can be partly the population is only going to get bigger and bigger and natural ascribed to Denmark’s strong wind turbine sector, historically resources fewer and fewer. driven by an ambitious focus on sustainable energy during the 1980s and 90s, and also the wind turbine giant Vestas’ ability to build and take advantage of wind power competences in Denmark. Today Denmark represents a global competence centre for sustainable energy. A platform that has attracted major foreign industry giants like Siemens, who has based its head offi ce for its wind turbine venture Siemens Wind Power in Denmark. The company has invested billions of DKK in building a production, development and skills centre in Vejle, Brande, Aalborg and Ikast. And it has paid off. During the 2008-2010 crisis, when

45 Grundfos Close market contact

In Germany Grundfos is acknowledged signals and to be open to more than just In brief for its green touch and sustainability your own agenda. The company's identity Export share: 98 per cent approach, while in Russia it is acknowl- has to be coherent in order to retain the Turnover: DKK 22.6 billion edged for quality and durability. This group’s brand while also maintaining Total employees (home/abroad): pump group is now targeting several respect for the individual market. 4,900/14,000. markets and in some, such as China, the This philosophy is also behind Grund- Industry: Pump industry group is trying to create a new and sec- fos’ major venture of building a Chinese Founded: 1945 by Poul Due Jensen ond domestic market. version of the company’s organisation CEO Carsten Bjerg in Bjerringbro, complete with its own In Denmark the pump group Grundfos is research, development, production and known as one of the country’s green com- sales organisation – a unique venture in Lessons from Grundfos panies. However, in Russia Grundfos is many ways. ✳ Adapt your marketing so the company’s synonymous with quality and total costs in In 2008 Grundfos decided that China profi le matches demand in individual terms of products' lifespan. The green ele- should be the company’s second domes- markets. ment is practically non-existent. The same tic market, a decision based on the ac- ✳ Use local employees who understand applies to the US, where the company knowledgement that its products mainly the market fully and set up local focuses on energy effi ciency and comfort. met the requirements of other Western domestic market production if a specifi c The company supplies both lean and green companies. However, the products found market requires it. solutions, clearly a strategic choice. Their it harder to penetrate the growing Chinese ✳ Develop and retain strong values of products utilize water resources more ef- domestic market, as requirements here how the business should be run and fi ciently and deminish the energy used for were of a different nature all together. And developed so that all employees work in pumps, thus contributing to solving one of so the decision was made that Grundfos the same direction. the world’s biggest social challenges: the should also become a Chinese pump ✳ Be ambitious in all areas: products shortage of clean drinking water. Years manufacturer. A target that follows the must be the best, production the most spent in export markets has taught Grund- company’s general practice of employing effective and customer contact must fos the importance of listening to market local pesonnel in key positions in their be close.

46 DENMARK’S EXPORT CANON international offi ces. While you can learn A pump is in itself a product with a relatively simple function. a lot about a country and its culture from However, Grundfos has built global success by coupling this a distance, the best lessons come from “ people with fi rst-hand knowledge. simple pump with a solid portion of innovation and by constantly Having a talented sales force and the developing both the company and its products. This is why right approach to the market is not enough Grundfos is one step ahead of their global competitors.” though. Grundfos fi nds itself in a highly competitive market bursting with coun- Thomas Bustrup, Director of DI terfeit products and cheap copies, whihch means that the company has to be one step ahead of its competitors. Everyone at Grundfos is aware of this challenge and it permeates the company on all levels: This constant focus on making everything the development department is currently better tomorrow dates back to Grundfos’ working on integrating intelligent technol- founder Poul Due Jensen, whose philoso- ogy. Production is constantly streamlining phy was that everything could always be production methods. And sales is working improved. It was the founder himself who closely with customers and developing invented the factory machines that made skills with service operators. the parts for the pumps.

Novozymes Bio technology for the whole world

A longstanding Danish focus on green his name and yet another of Denmark’s In brief solutions was one of the levers for Den- successful ingredient companies, began Export share: Over 95 per cent mark’s biotech industry, with Novozymes producing rennet based on enzymes from Turnover: DKK 11.23 billion as a strong global player. And we have only calves’ stomachs. Such processes can be Employees (home/abroad): 2.530/3.470 seen the tip of the iceberg. applied to other industries. Industry: Biotech Founded: In 2000 as a separate business The Novo family’s enzyme business CEO Peder Holk Nielsen It is only the lack of knowledge and originates from insulin extraction, Novo customer understanding that limits the Nordisk's core product. In 2000, the development of a global business such as enzyme part was separated from the Novozymes. mother-business to enable the company The green member of the successful to develop with an independent and stra- Novo family has built an entire business tegic focus. Since then, the company’s concept on creating green alternative in- turnover has quadrupled, revenues gredients in everything from food products have trebled and the market value has to washing powder to bio fuel.The compa- increased by a factor of ﬁ ve. ny’s key products therefore utilize nature’s Based on its wide application, Novo- own building blocks. Nature's biological zynes is now a multifaceted business. The processes use enzymes to speed up other enzymes are used as active ingredients biological processes. In 1874, Chr.Hansen, in everything from low polluting washing the man behind the company bearing powder to longer lasting bread.

47 The broad application of its products menting a clear strategy that entails the Lessons from Novozymes is one of the reasons why Novozymes’ company in America being American, ✳ Get close to your customers and approach to the world market is about in China it is Chinese, and in Brazil it is understand their needs. thoroughly understanding customers’ Brazilian. Customers in individual coun- ✳ Act like an international company. Use production processes. Because it is pre- tries must trust the people they partner local employees where possible, They cisely in other companies’ core process- with, the company must understand can translate a Danish-based business es that enzymes need to add benefi t and their needs, and out there in the big into local conditions and needs. replace chemicals, and act as catalysts wide world, their connection to Denmark ✳ Innovative sparks fl y when people meet. in the development of second generation means nothing. You therefore need a physical presence bio fuels, or create alternatives to the Continued innovation and creativity in the markets to get close to customers. pesticides used in farming. also constitutres paths to growth for One of the corner stones of the Novozymes. After 2015, the target is an Novozymes success is therefore its in- annual organic growth of 10 per cent, novative partnerships with customers. which will probably be 6-7 percentage The bridge between natural ingredients points above the economy in general. It and industry is being built in close col- is not enough for Novozymes to follow laboration with Novozymes’ laboratories worldwide. In other words, Novozymes’ success is dependent on close customer contact, which can be a challenge in international markets, and in particular Novozymes is not just a sub-contractor, moving into the export the new growth markets. Understanding “ market on the tail of its big customers such as Unilever and a customer’s needs when they live just Procter & Gamble. The company is also establishing new de- around the corner, and the language and partments with local employees who understand local markets, culture are similar is straightforward. However, understanding conditions in which leads to new customer relations and new products.” the Chinese or Indian mass markets, is Per V. Jenster, Professor something entirely different. One of Novozymes’ responses to this particular challenge has been to use local employees as ‘business transla- market growth. The gap from 3 to 10 per tors’ whenever possible. However, in cent must be closed through innovation, the words of senior manager Peder Holk also from the customers. New digital Nielsen, it would still have been much technology often sounds like a short-cut easier to penetrate the Indian market if to customers and an opportunity to save Novozymes' head offi ce had been based on expensive travel costs, but in the words in Mumbai. of Peder Holk Nielsen it is only when Novozymes is therefore also imple- people actually meet that sparks fl y.

48 DENMARK’S EXPORT CANON

Siemens Wind Power Central to the world’s competence centre

With a workforce totalling ten times failing competitiveness. Three factors in In brief its original size in Denmark in just 10 particular explain why Siemens keeps its Export share: Approx.. 95 per cent years, Siemens Wind Power is a unique wind turbine base in Denmark and why in Turnover: DKK 21.2 billion green export success. A Danish knowl- the last six months, the company has in- Employees (home/abroad): 5,300/3,300. edge base on wind turbines keeps the vested DKK 1 billion in the Danish factory Industry: Wind industry German-owned company from moving and development plant: ﬁ rstly, salaries Founded: 1980 as Danregn Vindkraft abroad. usually only constitute 3-4 per cent of the By Peter Stubkjær Sørensen. 2004 total cost of the turbine itself, and thus acquired as Bonus Energy A/S by One of the world’s leading competence the high Danish salaries do not amout to Siemens AG centres for wind turbines, maybe even such a large part of the overall budget as CEO Jan Kjærsgaard the leading one, is located in the town of is often the case in other types of produc- Brande in central Jutland.As you turn off tion. Secondly, with its ambitious climate the motorway that surrounds the town, targets Denmark is still a major investor it is clear that in this small and often in wind turbines and supports the busi- Lessons from Siemens Wind Power inconspicuous corner of Denmark, wind ness by setting up test centres. Thirdly, ✳ Nurture, develop and reinforce turbines are not only a part of life, they Denmark boasts a completely unique your skills and use them for new are also manufactured and sold to the knowledge of wind turbines. development. rest of the world. Among other things, This knowledge comes from people ✳ If you want to manufacture in Denmark, Siemens' wind turbines are the root stock who have been part of the wind turbine make sure you develop products with a of the world’s largest offshore wind farm, adventure since its rejuvenation began. relatively small salary share. London Array, off the British coast. A good example is Technical Director of ✳ Your development team should be With its working cranes and tow trucks, Siemens Wind Power, Henrik Stiesdal, close to your production. Siemens Wind Power’s factory in Brande is reminiscent of the former days of the industrial revolution and is quite a sight to behold. In many other corners of Den- mark, the only remnants of industrial pro- Siemens Wind Power is an example of international investment duction are still visible are the half-empty, in Danish knowledge, which is in an international class all of run-down factory buildings. Nevertheless “ its own. A knowledge strengthened through proximity to its Siemens Wind Power is keeping its wind products, which has in itself become a rarity in Denmark.” turbine production in Brande and its blade production in Aalborg, just as it was Helle Søholt, CEO of Gehl Architects before 2004, when the German industry group acquired the Danish wind turbine manufacturer Bonus Energy. often described as a relentless engineer The development team is closely who has been part of the wind industry connected to production – in line with since the 1970s. Alongside Ditlev Engel, the company’s philosophy. Production former CEO of another Danish wind in Denmark seems a little strange when turbine icon Vestas, Stiesdal is often you consider the exodus of Danish referred to as one of the most inﬂ uential industrial jobs in the last 20 years and people in the global wind turbine world. the often harsh debate on Denmark’s The build-up of skills and investments

49 in Denmark continues. In 10 years, the tail. It is stuck to the blades and not only staff has grown from 600 to 5,300 – and makes them less noisy but they also globally from 800 to 8,600 employees. increase productivity by 3 per cent. This Siemens’ objectives are new develop- effect is very signifi cant, but it is also the ment and continued optimisation of result of 15 years' research. production, and both have yielded results Within the German group, Siemens so far. The production of wind turbines is considers its investment in Bonus Energy now achieved in a production line with as one of its best ever, and their fi gures just eight stops, and the wind turbines prove it. Based on growth in turnover continue to grow in megawatt capac- and profi t Siemens Wind Power has, ity and productivity. A small yet striking unlike competitor Vestas, demonstrated example of how little is required: Peder constant growth within the last ten years, Bay Enevoldsen recently discovered a not least thanks to its heavy focus on small plastic unit that resembles a lizard’s offshore turbines.

Haldor Topsøe Green solutions with good chemistry

There are environmental initiatives and areas where they could manufacture more In brief then there are green growth initiatives. effi ciently and at less costs. This remains Export share: 99 percent Haldor Topsøe focus on the latter. their objective today, and the resources are Turnover: DKK 5.24 billion more or less the same: fi nd new solution Total employees (home/abroad): When chemical engineer Haldor Topsøe and fi nd out who needs them. Market 2.000/537. founded the engineering company in 1940, analyses and research are core pillars of Industry: Catalysts. he wanted to make a difference. Not ini- the company. And right now the market Founded: 1949 by Haldor Topsøe. tially for the environment although that is wants environmentally effi cient solutions CEO Bjerne Steffen Clausen. how things turned out. He wanted to make at low costs. a difference to the many manufacturing This demand matches Haldor Topsøe companies that were constantly looking for A/S’ core skills. Since its infancy, the com-

50 DENMARK’S EXPORT CANON pany has developed catalysts and catalytic the company’s paths into the extensive Lessons from Haldor Topsøe processes that can launch or accelerate Chinese growth market is a new fuel, DME, ✳ Invest as much as possible in research a chemical process. Haldor Topsøe uses made from the black liquor waste product and development. New products are these in the production of petrochemical derived from paper production. Chinese essential if the company is to maintain products, such as fertilizers, and for clean- cities suffer under a hard, heavy layer of growth. ing everything from oil to gasses. Topsøe’s air pollution, and the government in Beijing ✳ Investigate where there is a demand for catalysts can remove sulphur from oil, so it has recently imposed restrictions on the products and processes that you have pollutes less and yields a higher return. In amount of sulphur allowed in fuel used in already developed, and increase your this way Topsøe has achieved its founder's the country’s vehicles. By 2017, fuel may sales there. goal of making a difference. Cleaning has only contain a fi fth of what it does today. ✳ Do a little more for customers than both increased the quality of existing Some of China's biggest sulphur sinners what they have paid for. Then they will products and made it possible to use raw are the small three-wheeled moped taxis not leave you for a cheaper competitor. materials, that were not previously usable. that drive around with engines that could Over time Haldor Topsøe had the idea easily run on DME. It would signifi cantly that waste from various cleaning process- reduce pollution. es could be used for something. Instead of eliminating sulphur, it can be made into sulphuric acid, and thus Haldor Topsøe has in this way turned polluted waste into a In a time of scarce resources and smog covered cities, Haldor saleable product. Topsøe’s research has paved the way for saving the environment This development fuelled the com- “ and making industry more effective. Everyone’s a winner.” pany’s success in the export market. The basic idea from 1940 remains the same Helle Søholt, CEO of Gehl Architects today - that Topsøe should constantly develop its products and focus on new markets. In othre words, the company invests heavily in research and development, DME is just one of many environmental- just as it does in a large sales presence in ly friendly products that China needs. The its export markets. company’s researchers have already de- Over 99 percent of Haldor Topsøe’s veloped a so-called DENOX catalyst, which turnover of DKK 5+ billion comes from can clean NOx gasses from power plant abroad. The company has over 2,500 smoke, busses and lorries. This affords employees and departments in Denmark, Haldor Topsøe an advantage in overseas the US, India, China, Russia, Malaysia, markets that now fi nd themselves needing Bahrain, South Africa, Argentina and Brazil. that technology. It is not just about earning China is one of the countries that money, but also about making a difference Topsøe is currently focusing on. One of while you are doing it.

51 52 DENMARK’S EXPORT CANON

The Welfare Exporters

Denmark currently boasts a strong cluster of innovative welfare exporters, who supply medicine, care equipment, hearing aids and high quality service solutions. Com- panies 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 and their domestic market’s high expectations and demands, including discerning patient associations, have helped give them a competitive advantage in the global market.

Coloplast – How Coloplast became the world's leading supplier of intimate health products, such as the colostomy bag. Page 56.

Falck – Loyalty based management is one of the secrets behind this service company, which has become one of the biggest international ambulance operators in the world. Page 57.

Oticon – Through innovation and strong local sales departments, Oti- con has grown to become one of the world’s three largest hearing aid manufacturers. Page 59.

Systematic – The IT adventure began in the Navy, but today System- atic is fighting to become one of the biggest players in the global market for electronic patient records. Page 60.

53 “The global demographic development and vast Danish knowledge of people’s needs throughout their lives provides enormous potential for welfare export. However, the obstacles to penetrating other countries with this type of service are numerous.”

Philipp J.H. Schröder, Professor at Aarhus University

Despite vastly differing products, companies such as Oticon, which constantly develop the equipment so that sound becomes even produces hearing aids, Falck, which supplies rescue services, and clearer. Coloplast, which makes colostomy bags, they all share a common A combination of the visionary welfare sector in Denmark and denominator: without politicians focusing on a high level of welfare high ambition and values internally in the companies has resulted for all Danes they probably would not have been as successful as in many Danish welfare and health organisations being named as they are today. state-of-the-art companies in global markets. And even if exporting The public sector was a lever for Falck, because it was made was a barely thought through strategy when welfare Denmark was possible for a rescue service company to be managed by a private under development, export they did. And this is promising for the player. Intelligent public contributions, high standards and a close future. private-public collaboration on specialised research helped create the foundation for the Danish hearing aid cluster, which is now The world demands Danish solutions present in half the world's markets. And the public sector’s focus Everywhere in the world the demand for quality solutions in the on getting chronic patients on the right track and back into the job welfare market is rising. Outside the country’s borders, there is an market created a base for a company such as Coloplast. increasing focus on opportunities to increase individuals’ welfare. The crucial role of the Danish state in the birth of these compa- The world is currently experiencing a boom in prosperity. nies does not in itself guarantee exports, but it has enabled the According to a study by the European Union Institute For Safety companies to be invited to tender in export markets. There are studies (EU ISS), the global middle classes will grow from 2 billion around 800 companies within the health and welfare sector, who today to 3.2 billion by 2020 and 4.9 billion by 2030, primarily in employ approx. 35,000 full-time employees and represent 12 per India and China. cent of Denmark's export. Import statistics from these countries already point to a rise in welfare technologies. In China, the import of welfare technologies Always a bit better have risen by 241 per cent since 2001. In Russia the rise was 488 Companies that do well in this ﬁ eld also share other features: none per cent and in India 405 per cent. of them focus on being the cheapest and none of them use the lowest common denominator as a grounds for competition. Instead New companies emerging they focus on customers’ requirements, and solving customer The Danish business community has lured the export oppor- issues raises quality levels. A good example is the hearing aid. tunities. Old stalwarts such as Oticon, Falck and Coloplast will Increasing sound is simple, but new technology enables you to be joined by new companies in the future. Over 34 per cent of

54 DENMARK’S EXPORT CANON

“A great product is not enough to ensure success in welfare export. Equally important are in-depth knowledge and understanding of the health sectors in the countries you are entering.”

Philipp J.H. Schröder, Professor at Aarhus University

companies working with health and welfare solutions introduced tain relations with the public sector. In Coloplasts's experience their fi rst products after 2006. Innovation is growing and may municipal buyers have become increasingly fucused on price well be redeemed as tomorrow's export adventure. One of the rather than long-term benefi ts. Municipalities it seems prefer to recent players in this export canon is Aarhus based Systematic. save a couple of DKK here and there during procurement rather With its own proprietary system for electronic patient records, than investing in the more expensive medical product, which in the Columna Clinical Information System, the company has been the long-term would increase the likelihood of transforming a invited in from the cold to bid in the large and often complex chronic patient back into an active member in the job market. public tenders. And thus Systematic has proven that visionary thinking in political circles not only benefi ts Danish citizens, but More innovative public procurement also the Danish business community. Another example is the The recognition that the public procurement policy could be company Medical Insight, which develops image distribution improved has reached the highest government echelons. The systems for the health sector. The company already exports to report 'Growth Plan for Health and Welfare Solutions' states that the US, Nordic countries and the UK. A third example from the the intelligent public demands need strengthening, and thus health industry is Medisat, which has developed light and mobile the government is trying to stimulate innovative purchases that treatment equipment that enables COPD patients to move part of focus less on the price and more on use and total economy. This their treatment from the hospital to their own home. will ensure that Denmark retains its edge in health and welfare solutions. Danish municipalities and regions are experimenting The procurement muscle must be exercised with what will be future export successes, and the list includes A strong public procurement muscle is important for all new play- everything from electronic door locks, ceiling lifts, blood test ers who need to raise capital from the classic welfare companies. robots, automatically cleaning toilets and electronic plasters More than half of the companies believe that large scale deliveries to voice monitoring, voice recognition and pressure sensors. If to the public sector in Denmark increases export opportunities. these experiments are commercialized, new export adventures According to a study conducted by consultants Brøndum & Fliess, could be just around the corner. being able to add a large public sector customer to the company’s reference list increases its chances of accessing the big tenders outside the country’s borders, and at the same time, larger scale enables companies to streamline production and lower prices. Meanwhile, it appears to be somewhat of a challenge to main-

55 Coloplast The key is creating a better quality of life

Coloplast has always been driven by society. It requires constant innovation as In brief strong values, helping users of the well as improved functionality and design, Export share: 98 per cent company’s products, such as colostomy and Coloplast has a strong tradition of Turnover: DKK 11 billion bags, enjoy a better life. This remains the involving its customers in this particular Employees (home/abroad): 1,300/6,700. key to Coloplast’s success in the export development process. It seems to be pay- Industry: Pharmaceuticals markets today. ing off too, because for the second year Founded: 1954 by Aage Louis-Hansen running, patient associations have hailed CEO: Lars Søren Rasmussen Strong fi nancial results and value crea- Colopast as the best pharmaceutical com- tion are important – also internally in the pany in the world, ahead of international company. However, the main condition for competitors such as Johnson & Johnson Lessons from Coloplast export success is found by looking behind and Smith & Nephew. ✳ Your product means everything for your the walls of this pharmaceutical company, The customer-focused strategy goes company’s long-term success. Nurture a specifi cally in the company’s head offi ces back to the company’s founders. In 1954, culture that never compromises innova- in Humlebæk, north of Copenhagen. Their nurse Elise Sørensen came up with the tion skills and quality. management team is focused on how new idea for a colostomy bag when her sister ✳ Be professional when you sell. Know patients globally demand the latest qual- was operated for colon cancer. Elise where the most valuable customers are ity products and services within intimate Sørensen developed the colostomy bag to and invest in them. healthcare. give her sister and others diagnosed with ✳ Strive to be the most effective in your Coloplast's products are not the colon cancer a better quality of life, with- industry: This will give you the best rev- cheapest on the market. However, the out being isolated and stigmatized. Aage enue and thereby the means to invest in company’s products aim to provide us- and Johanne Louis-Hansen spotted the the development of both your company ers with as active and normal a life as idea's potential and put the colostomy bag and your market. possible. This is better for the individual into production. Two years later, export patient and in general is also cheaper for sales exceeded domestic sales. Following

56 DENMARK’S EXPORT CANON the development of the colostomy bag several new intimate products have been Colopast is particularly good at understanding users' needs. developed and true to the original spirit, in close collaboration with users. Coloplast’s From day one, the company has always tried to put itself in its business areas now include colostomy, “ customers’ shoes, which it now does very successfully across incontinence, skincare and urology. De- different continents and cultures. Most strive for this kind spite the strong philosophy behind the of success, but only few will achieve it at the same level as products, export success is never taken for granted which is why in recent years, Coloplast.” Coloplast has worked on signifi cantly Thomas Bustrup, Director of DI improving its global competitiveness. An important step has been imple- menting a complete turn-around of the company, which has seen signifi cant improvements in effi ciency and a more ing, its sales organisation, particularly professional sales process in Coloplast’s outside Europe. This means that a larger 33 internationally-based subsidiaries. share of future growth will come from Today all the sales companies in the group markets outside the EU, such as the US, are focused sales units with minimum China and Brazil, while the company still back offi ce functions. They have invested aims at maintaining the very important Eu- heavily in data for public procurement ropean base. Coloplast has also invested organisations and consumers and in the in innovation processes, giving product training of the sales management team development a commercial stance but and the sales force. Equally, the company without compromising the product’s is in the process of signifi cantly expand- technical qualities.

Falck Focusing on Nordic values

Risk-taking investors among its own- he stuck to his approach. It was not about In brief ers put the Falck Group on the road to lessening demands on employees, but Export share: 51.6 per cent exports. Falck enjoys major support about control being replaced by trust, as Turnover: DKK 11.5 billion from Denmark’s public sector and has a it is in most Danish workplaces. Employees (home/abroad): unique competitive edge: loyalty-based In addition to the unusual parameter of 9,851/18,214. management. having the Danish state as a reference Industry: Rescue, health and assistance customer it is this management model Founded: 1906 by Sophus Falck In Poland employees initially thought Falck that forms the cornerstone of Falck’s CEO: Allan Søgaard Larsen director Allan Søgaard Larsen had a soft export success, which has rocketed since touch when he visited the new subsidiary 2004. Allan Søgaard Larsen believes in and demonstrated a management style never disparaging the value and export based on looking out for one another. But potential of the Danish and Nordic man-

57 agement model. If this model is practiced take risks and provide the long-term secu- Lessons from Falck properly it will ensure low sickness rity required by the export strategy. It is the ✳ Nurture a Nordic management model absence, low staff turnover and a culture same strategy current owners, Lundbeck with a high level of trust as opposed to of responsibility among employees. Fund and Kirkbi) as well as Falck's manage- control, and use this as a competitive The sickness absence in Falck is signif- ment and a number of senior employees advantage out in the world. icantly lower than at its competitors, and have decided to continue. ✳ Use the Nordic management model to staff turnover is an average of seven years Since 2004, the growth in export gain and retain the best employees. as opposed to the competitors' three-year markets has been signifi cant. Today Falck ✳ Have investors willing to take risks sup- turnover. The bottom line directly refl ects operates all over the world, adn thus Falck porting you. Venturing into international that the company's ability to retain highly has achieved a position as the world’s markets is not always straightforward. specialised employees such as paramed- largest international ambulance operator ics, doctors and nurses. and the third largest in America. Within Before 1989, Falck was a purely Dan- Europe, Falck has its largest base in Po- ish rescue service company owned by the land with nearly 3,500 employees. Falck family, dating back to Sophus Falck, who founded the rescue service in 1906. But in 1988, the Falck family sold the company to the now defunct insurance company Baltica and a major growth of- Falck provides a number of services, some of them vital, which fensive was subsequently launched. are completely dependent on whether people believe in them. In 1993, Falck took over ISS Securitas' “ Falck owes its huge success to the strong management culture security division, and this division was that prevails in the company, and which leads to a very high level later developed. Falck merged with Group 4 and acquired Wackenhut. Gradually two of trust.” companies began to emerged, a Danish Thomas Bustrup, Director of DI rescue service company with associated activities and a more international security service. In 2004, Falck returned to its old self Falck’s unique selling points are its and the security part became G4S, when management model, which ensures a G4 merged with British Securicor. well-functioning organisation, as well as Following this separation, it seemed an impressive track record from Denmark. the right time to focus on internationalizing The company is a great example of how the Falck’s traditional activities such as res- combination of public procurement and cue, health and assistance - activities that services in a private company as well as Falck had built up over nearly 100 years, risk-taking investors can lead to success- alongside the development of the Danish ful exports. According to Allan Søgaard welfare state. The expedition on to the Larsen, Falck is also an example of why global market was made possible not least it is so important that private players are through the signifi cant sanctioning by new allowed a share of the welfare services in owner, Nordic Capital, who were willing to Denmark.

58 DENMARK’S EXPORT CANON

Oticon Listening its way to global success

In order to listen you must be able to hear. drastic ﬂ uctuations as is often seen in In brief Both of these virtues are key to Oticon's markets for more standard export goods, Export share: 98 per cent expertise. They help people hear better such as shoes, fashion or mobile phones. Turnover in the William Demant group, through increasingly advanced hearing Nonetheless, success requires an in-depth Win which Oticon consitutes the largest aids while listening to those who help oth- knowledge of national legislation, key business area: DKK 8.6 billion ers get their hearing back. decision makers and the central people Employees, William Demant (home/ at hospitals and clinics, as well as private abroad): 1,546/6,744 The ability to listen to key players in private distributors who advise future users on Industry: Hearing aids and public health systems round the world hearing aids. Founded: 1904 by Hans Demant CEO Oticon: Søren Nielsen is one of the secrets of Oticon's global When Oticon sells hearing aids abroad, success. A success that has made the com- ithey do so primarily through their own Note: Figures are from Oticon’s Subsidi- pany a front runner among Danish hearing sales companies. Often these have been ary, William Demant, which gives the most aid manufacturers, who in unizon represent founded through a local distributor who re- accurate picture of the Oticon brand’s almost 50 per cent of the world market. mains the main channel in Oticon's smaller global position. In addition to Oticon, Wil- Approx. 2 per cent of Oticon's turnover markets and the one that is most frequently liam Demant also sells a number of other is in Denmark, while the remaining 98 per used in the early phases when entering a brands, including Bernafon, Neurelec, cent stems from widely differing national new market. Only later on, once turnover Phonic Ear, Sennheiser. Neurelec, Phonic markets all around the world, where the has reached critical mass and other market Ear and Sennheiser. company is up against major players such conditions are pointing in the right direction, as the American Starkey, German Siemens will Oticon set up its own sales company. and Swiss Phonak. Individual markets for Either it takes over the distributor's com- hearing aids are growing at different rates, pany, or it sets up a entirely new company. yet in total they comprise a business area According to CEO Søren Nielsen, having that has not been subjected to the same your own sales company ensures that you

59 get a greater share of the value chain. And In the health sector, buyer and customer are often two at the same time, you gain extra knowledge different entities. Oticon has turned this dilemma into a of local conditions, which enables you to “ competitive advantage. The company currently holds a unique increase market share and nurture special segments within the market. place in the market with its ability to manage the special Oticon’s success builds on doing a job conditions and peculiarities of the international markets.” thoroughly, patiently and ambitiously when Philipp J.H. Schröder, Professor at Aarhus University entering a new market. The company knows that a good local manager comes at a price, because attracting local talented business people to work for a small Danish company that is opening a department with less than 10 employees can be diffi cult. And the com- have been built up over many years and Lessons from Oticon pany is prepared for the fact that it takes their experience is extensive. to a degree, ✳ Invest in development and strong local time before you see results. The individual their success can be traced back to the sales organisation within national distributor provides sound knowledge of development of the public Danish health markets when critical mass is reached, local conditions and will often have spent service in the 1950s, when Denmark was but start by focusing on a few individual many years in the industry. the fi rst country that provided fully subsi- important markets that you know you Oticon invests heavily in both innova- dised hearing aids, which again secured a understand. tion and employees, which is made possi- strong domestic market. Today, Oticon is ✳ Arrive as a global company – and famil- ble thanks to its owner, the listed company a global company with the majority of its iarise yourself with local conditions. William Demant and their profi ts: in 2012, production based in Poland, and product ✳ Experiences gained from Danish key group profi ts were DKK 1.7 billion follow- development mainly in Denmark. The customers can be a lever for developing a turnover of DKK 8.6 billion, of which group language is English and the transi- ment of innovative quality products, Oticon represented the biggest business tion from being a Danish company selling which can then be exported area. Danish products to the rest of the world Through its parent company, William to being a global company that develops, Demant, Oticon and two other major produces and sells products all over the Danish companies, GN Resound and world is, according to Søren Nielsen, a Widex, form a strong Danish cluster in the completely essential step that all export hearing aid industry. All three companies companies need to take at some point.

Systematic Successful patient records

Systematic's next biggest export dream ous erroneous strategies on developing In brief is IT systems for the health sector. The their own systems often overshadow the Export: 22 per cent Aarhus based company has a mission to real picture. However, beneath this dark Turnover: DKK 413 million systematise and create simplicity where shadow lies at least one positive story: IT Employees (home/abroad): 401/41 important decisions are made – e.g. the company Systematic in Aarhus. Industry: It software Founded: 1985 by Michael Holm and armed forces all over the world. This part of the company’s story began Allan Schytt in 2001. At that time Systematic offered CEO: Michael Holm When you hear of electronic patient to develop electronic patient records records in Denmark, stories of scandals, for Aarhus County. The company had wasted investment and counties' previ- extensive experience in developing vital

60 DENMARK’S EXPORT CANON decision support systems for the army in commando and control system called Lessons from Systematic several NATO countries. Today System- SitaWare. This system enables all mission ✳ If you invent and create a product In the atic’s patient records - Columna - have participants, such as the Danish mission IT world it is easy to fall into the trap of been implemented in the Central Jutland in Afghanistan, to gain access to the same travelling around “hand-coding” solu- Region, which has also been involved in information about enemy assessments. tions, but a product gives a company its the development, and this solid public The system has been sold to 15 countries. identity and makes it easier to gain new customer reference can now be used to Right from its infancy, it was important customers. extend business beyond Danish borders. for Systematic to get a specifi c IT product ✳ Use the best reference customers, pref- Systematic is taking part in a major EU on the shelf. Experience showed that if erably someone from the public sector, tender in Finland, and Systematic is also you simply travel round as a specialised when the product is ready to be sold on. the last remaining Danish supplier in the IT consultant, hand coding solutions for If Mercedes is your customer it is easier bid for the central health platform in hospi- individual customers, expanding beyond to sell to KIA than the other way round. tals in the Capital Region and the Zealand national bordres is diffi cult. A product like ✳ Adapt your sales story to different real Region. It is too early to call the patient re- IRIS or SitaWare stands out and provides scenarios in the world - but let the prod- cord an export success. However, System- good reference customers. uct stay the same. atic already has extensive experience in Systematic is currently utilizing the exporting other products. The sales force global market more profi ciently, as they has valuable experience in the often challenging procurement processes within the public sector. Systematic was founded by Michael Holm in the mid-1980s and has since sold defence systems. Business acumen often suffers in technology-driven companies. The Navy was actually where it all Systematic is able to unite the two disciplines. It launches sales began. The Danish Navy was looking for “ successes in international markets amidst tough competition.” a system that could systematize reports from ships and other outposts in order to Philipp J.H. Schröder, Professor at Aarhus University access threats from outside. The information was previously sent to headquarters in an unstructured texts to be mulled over by analysts who then provided a recognize the need for round table nego- complete picture. The process was long tiations if they want to sell their products and cumbersome. Systematic’s IT system to customers in both Malaysia and the IRIS ensured that the information from US, which is also why Systematic is now outposts was standardized, enabling the setting up six regional sales bases. The automatization of threat assessments business is thus under constant develop- and the provision of consistent communi- ment. However, the company retains one cation between different IT systems. permanent characteristic: Systematic The IRIS system was so successful operates in a fi eld in which demands on IT that the German army also bought it. systems are high, especially for them not Germany proved a good customer; to break down and they must be able to thanks to the country’s key status in NATO, operate 24 hours a day. it became a sponsor for Systematic and The company’s slogan is 'simplifying promoted the company to armed forces critical decision making'. And Systematic in other countries. Later on, System- has been awarded that rare CMMI certifi - atic further developed IRIS and they now cation, which indicates transparency and provide army units with an extensive the ability to deliver software on time. 62 DENMARK’S EXPORT CANON

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. From ECCO’s shoes to LEGO’s bricks and Fritz Hansen’s furniture design, Henning Larsen’s architectural masterpieces and Designit’s strategic design of human experiences, a number of common denominators characterise the Danish super designers. Aesthetics, functionalism and a thorough understanding of users' needs and behaviour is renewed by the super designers responsible for some remarkable Danish export successes.

ECCO – A global export adventure that began with foot-shaped shoes from Bredebro and which has grown into a premium brand perceived by the Chinese as a luxury product. Page 66.

Fritz Hansen – A republic for a number of classic Danish furniture icons is completely revitalising its business and brand. Page 67.

Henning Larsen Architects – The international market quickly became home turf for Henning Larsen, who has also won the world’s most prestigious architecture award. Page 69.

Designit – A company that supplies innovation and strategic design solutions to some of the world's most ambitious companies. Page 70.

LEGO – The world’s third largest toy manufacturer who sells billions of bricks every year and they have also designed completely new ways of playing for generations of children. Page 72.

63 “ In a world where increased automation makes production lighter and cheaper, design plays an increasingly important role in making products stand out. Design is the cornerstone of our history, which gives us a major advantage in global competition.”

Christian Stadil, co-owner of Hummel and Thornico

Despite its modest size, Denmark is one of the world's best by architects, designers, town planners and other creatives who known design nations. Led by pioneers such as Arne Jacobsen, have developed the town based on a common and strong design Hans J. Wegner and Georg Jensen, over the years Danish design- tradition. ers and manufacturers have managed to turn Danish design The breakthrough of the Nordic kitchen into the global mar- into a global brand, which now provides Denmark with billions ketplace is another example of how key elements from Danish in export revenues and presents the country internationally as a design – simplicity and high quality – have been used to create modern and quality conscious nation. international success that attracts tourists from all over the However Danish design is not only about physical products world and thereby contributes positively to Danish export. such as furniture, lamps and cutlery. The Danish design concept is famous for combining a distinct simplistic and minimalist Designed in Denmark rather than Made in Denmark expression with solid craftsmanship and a high degree of A rising number of consumers care about where their products functionalism, while making products that are both beautiful to are produced. Many Danish design companies have managed look at and easy to use. It is no coincidence that the world’s to use this development to promote Danish design as a strong largest design competition, the INDEX: Award, which rewards brand. design that increases users’ quality of life, was founded and In 2012, DKK 75 billion worth of Danish design, furniture, awarded in Denmark. Danish design companies are internation- fashion and architecture was exported, a growth that is expected ally known for having a sound understanding of users’ needs to continue. While the export of Danish design products for the and behaviour. majority of people goes to neighbouring countries and other parts of Northern Europe, major growth potential can also found Design boosts Danish export beyond European borders. The Danish design concept goes far beyond the classic design The global demand for quality and design products is industry and enables companies such as Novo Nordisk and exploding in line with the number of consumers, particularly in Coloplast to develop global and award-winning export successes new growth economies experiencing signifi cant rises in wealth. like the Novo Pen and the catheter range SpeeediCath Compact. According to UN fi gures, the global export of creative goods and Both are good examples of how Danish design facilitates the services more than doubled from 2002 to 2008, and from 2010- creation of products that consumers are willing to pay more for. 2011 global trade in the creative economy rose from USD 560 As much as 38 per cent of total Danish exports are based on billion to USD 624 billion year. this type of upmarket product, where Danish design justifi es a Several Danish design companies have succeeded in gaining higher price. a share of this signifi cant growth and thereby lead the way onto In many ways, the Danish design concept permeates Danish the global markets. The world’s biggest auction house for furs, society and contributes to highlighting Denmark globally as an Copenhagen Fur, is a good example. The trading company is attractive country and business partner. When the well-known owned by Danish fur breeders and currently represents a third magazine Monocle cites Copenhagen as the world's best city, it of total Danish exports to China, and a large part of the growth is done with reference to the high quality of life that charactises in Danish export to eastern growth nations can be attributed to the city and is a product of the many years of hard work put in the Danish mink trade.

64 DENMARK’S EXPORT CANON

“The companies in this category have broken down the traditional Danish design silo. Instead of designers sitting alone in their ivory towers, sensing the colour purple, they now combine design, products and services in a way that can easily be upscaled and sold in international markets.”

Christian Stadil, co-owner of Hummel and Thornico

Another example is shoe manufacturer ECCO, from the South over the world adapting to increased urbanisation, an increase of Jutland, which has grown from one to over 800 shops in China in elderly people and greater pressure on public expenditure. in less than 10 years. And the over 100-year-old furniture manu- The business community is also demanding strategic design facturer Fritz Hansen, now called Republic of Fritz Hansen, has because, according to statistics, it increases productivity. doubled its turnover several times over and paved the way for With internationally renowned architect fi rms such as Hen- new design gaining a classic status on the global market, thanks ning Larsen Architects and Bjarke Ingels Group, the Danish archi- to a successful relaunch of Danish furniture classics such as the tect industry has gained a solid foothold in a number of markets Egg and the Swan. outside Denmark. The presence of a large public sector, trust Just like ECCO, Fritz Hansen has moved its production and a strong tradition of collaboration makes Denmark a coun- abroad, where they believe they can get better quality while try that tests and develops strategic design solutions ready for keeping costs low. It is not 'Made in Denmark', but 'Designed exporting. A multitude of Danish design companies have spotted in Denmark' that has been the foundation of their export suc- the potential and are in the process of carving Denmark out as a cess. If production had not been moved abroad Danish design global front runner in this area, exempllifi ed by companies such would not exist today. Both companies are aware of putting their as Designit, who has developed into one of the biggest global products into a context that foreign consumers fi nd interesting, players on the market for strategic design solutions for the US, the so-called co-branding. But the design is unmistakably Dan- Israel and South America, among others. ish and is rooted in that special Danish design tradition, where Denmark is far from the only nation to spot the growing export aesthetics and functionalism reaches a higher level. potential of strategic design and design as fashion. Other Nordic Following years of stagnant growth and red bottom lines, countries also consider themselves design nations. In Southern the Danish fashion industry is well on its way to a global break- Europe the large fashion houses and their brands represent through. a strong platform for continued growth in exports and in Asia In just a few years, Copenhagen Fashion Week has turned nations such as South Korea value strategic design. Danish into Northern Europe’s biggest fashion event, with over 50,000 companies have to fi ght for a larger share of the world market professionals from the fashion world attending. Attracting because despite many recent successes, the Danish design investment that enables volumes in production is still proving world is still dominated by small players and one-man busi- tricky, though. nesses. With its 'Growth Plan for Creative Business and Design', the Danish Government is prepared to strengthen investments Enormous potential in strategic design in the industry and thereby the access to the capital required to Even if Danish design is still best known internationally for conquer global markets. furniture and lamps, the export potential is vast when it comes to designing development and management processes, public services, digital products and other less physical solutions. Global demand for strategic design solutions that can contribute to the streamlining and increased quality of services in the city and health area, is rocketing in line with nations all

65 ECCO The premium brand from Bredebro

In just under 10 years , ECCO has opened decisions made by Karl Toosbuy. When the In brief 800 stores in China. This has required a founder decided that ECCO should have a Export share: 97 per cent combination of strong local business part- factory in Indonesia, that was what hap- Turnover: DKK 8.06 billion ners and the outposting of the company’s pened. And it was Toosbuy’s contact to a Employees (home/abroad): 500/19,000. best people – because experience shows Russian businessman that landed the fi rst Industry: Clothing//shoes that China is far from a do-it-yourself ECCO-branded shoes to Russia. Founded: 1963 by Karl Toosbuy market. Russia is currently run single-handedly CEO: Dieter Kasprzak by one distributor who is responsible for Chinese girls fi ll ECCO stores to bursting the entire network of Russian stores. This point. They are either looking for comforta- is what works best for ECCO in Russia. ble foot-shaped leather shoes or malleable In other markets, ECCO owns the stores. Lessons from ECCO trekking sandals. This type of footwear is Or the company co-owns them with other ✳ Penetrating new markets requires your not even on the shelves in Denmark. Here partners. A number of stepping stones best people. However, you can only girls want stilettos with the Danish logo apply every time ECCO heads abroad: it succeed in partnership with locals who stamped on the soles, which are branded is about bringing your own support, which know the market and the culture. directly onto the shoe’s leather. This translates into internal support for the ✳ China is a demanding market with shape-cast sole is the physical difference venture. Even if only a few employees tough competition. Invest in branding between ECCO and all other shoes. But the are involved in setting up a new market, yourself and securing a place in the shoes’ appearance also makes them stand penetrating a market like China is such a market where customers associate you out from other fashionable western shoes major project that it requires extra work with specifi c values – For ECCO this is in Chinese cities. from everybody. When everyone from pro- Scandinavian quality and simplicity. The design oozes Scandinavian quality, duction to the accounts department knows ✳ Take time to set up good local networks which is precisely the perception Chinese what to expect, it is also easier to get help and build networks with other western consumers have of the Danish shoe during busy times. companies with experiences in the brand. This Bredebro company has landed ECCO’s success has been built on a market you want to enter. straight in the deep-pocketed conscience network of partners, and fi nding the right ✳ Cultivate the area you are unique in. For of the Chinese consumers as a luxury partner is essential. ECCO it is the highly technical moulding product without the oppressive legacy of And when it comes to China, ECCO’s of the sole directly to onto the shoe that eing foot-shaped that the brand continues experience reveals that it is not a 'do-it- makes it particularly soft and malleable. to have in some European markets. yourself' market. However, you also have This core skill is the foundation of all However, the journey from Bredebro to provide the right team, and one which product innovation and a focal point we began long before ECCO’s founder Karl includes your best people. Conquering continue to develop. Toosbuy began talking about ECCOM going the Chinese market is far from easy. It is to China in the 1980s . And long before CEO a tough and very competitive market fi lled Dieter Kasprzak operationalized this vision with obstacles and you have to focus on in- putting ECCO on the Chinese map with 800 tense branding. Half the world’s shoes are stores in less than 10 years. made in China, and new competition is con- ECCO’s export history began shortly stantly surfacing. Within a fi ve-year span, after Karl Toosbuy founded the company the competitors will have changed. Chinese in 1963. The company is among the fi rst companies will create strong brands or buy in Denmark to move its production abroad. into brands, as we have witnessed in other In terms of sales, the company’s export industries. However, China will also be a fu- history is to a large degree, dependent on ture growth market for ECCO. But up to 60

66 DENMARK’S EXPORT CANON per cent of the company’s turnover contin- A great story about a little shoe shop in Bredebro, which has ues to come from the European continent, now become one of the most dominant shoe brands in the just as the North American market seems “ to be stirring again, accroding to ECCO. world. In China, ECCO has developed a retail network that is In neighbouring markets, ECCO needs to even bigger than Starbucks.” communicate how 2013 saw the arrival Per V. Jenster, Professor of high heels and innovative golf shoes. More store openings are on the agenda for the growth markets, as is the challenge of getting online channels to interact with the physical stores. ECCO must retain its strong position, regardless of whether a customer is looking for shoes online or buying them ECCO brings more work home. It is an from a shop, or trying them on in a shop but expensive solution but if you want to have a then buying them online from home. brand at the expensive end of the market, Finally, there is a need to keep a check you need to keep a check on the quality, on the process 'from cow to shop' if you from raw leather to ﬁ nished goods in the want to stay a premium brand. While shops. Otherwise you cannot retain your others pass on work to subcontractors, brand and develop it.

Fritz Hansen Globalizing Danish Design

Danish furniture icons such as the Seven ing the company in the European market. In brief series, the Swan and the Egg adorn Today the wave is continuing eastwards. Export: 75-80 per cent companies and private homes from Sao But how do you sell minimalist furniture Turnover: DKK 460 milion Paolo to Seoul. The company behind the rooted in Danish design and craftsman- Employees (home/abroad: approx. 120/ furniture is Fritz Hansen, procuring 75 ship to customers in South Korea, Taiwan approx. 50 per cent of their sales of just under DKK and China? According to Jacob Holmit, it is Industry: Furniture. 500 million abroad. about affording products relevance in lo- Founded: 1872 by Fritz Hansen cal markets. Fritz Hansen will not change CEO: Jacob Holm In 2020, Fritz Hansen’s turnover is the design of the furniture to make it expected to be in the region of DKK one American, Asian or Southern European. billion, double its current sales. A growth The Seven series, the Swan and the Egg of this scale cannot rely on Denmark are the same wherever you go, but when alone, which is why the company needs selling them, the story of Danish Design to become even more international in the will be translated and immersed in sur- near future. roundings that make the furniture easy CEO Jacob Holm refers to this develop- to understand regardless of whether the ment as the design company’s second customer is French, Chinese or Mexican. wave of internationalisation. The ﬁ rst For Fritz Hansen success is about mar- wave took Fritz Hansen from Denmark keting material and marketing partners. and the Nordic countries, ﬁ rmly establish- Strategic collaborations or co-marketing,

67 as Fritz Hansen tems it, allows the Tai- of internationalization, the many foreign Lessons from Fritz Hansen. wanese customer to experience Danish employees help show how the Seven ✳ Your own employees take more owner- Design furniture as relevant to Taiwanese series, the Swan and the Egg should be ship of developing the market for your culture, yet characterised by a specifi cally explained and marketed in Asia and other company than local agents who are not Danish Design tradition. growth markets. on your pay list.. The second crucial success factor The Egg, the Swan and a number of ✳ Penetrate few markets and spend time for Fritz Hansen’s export is ownership in recent designs are now produced in developing them rather than relying on the countries in which the company is Poland, as the majority of the Republic's many agents to enter multiple markets: present. Just after the millennium, Fritz other production will be in future. In the agent method does not grasp the Hansen fi red all its agents and distribu- Denmark, they continue the production feeling of the market and makes you tors, who had up until then been helping of smaller design series, including furni- vulnerable to market changes. retailers sell Fritz Hansen's furniture. ture by H. J. Wegner and Poul Kjærholm, ✳ Even if the product is the same in all Instead, the company invested heavily in however, production of Danish Design markets, it is essential that your brand- its own subsidiaries, who supported the outside Denmark is a dilemma that many ing ensures product relevance within retailers. Danish Design icons struggle with. In line local culture and that you know how it is Fritz Hansen also sharpened the with increased internationalization more going to be used there. company profi le. Previously, half the and more classic brands are moving their company’s turnover came from the sale of production out; what was once branded offi ce furniture. However, a strategic deci- 'Made in Denmark' has become 'Danish sion changed this as the market for offi ce Design'. furniture is very competitive and not an For Republic of Fritz Hansen, the area where Fritz Hansen could compete. choice of Poland is a compromise that Instead, CEO Jacob Holm relaunched the combines quality craftsmanship with Egg and the Swan, two classic icons, un- costs. 'Designed in Denmark and manu- der the shared brand of Republic of Fritz factured in Poland' is the company’s way Hansen, now fi rmly integrated in the niche of matching global competition. of high quality and durable brands. In line with the company increasing its shares of sales abroad in the 00s from half its turnover to the present 75 per cent, the need for more international resources also grew. Today the company has its own training academy, which trains employees Fritz Hansen has taken a proud Danish Design product - from all over the world in Danish Design furniture – and placed it in a new context.” traditions. And this knowledge works both “ Christian Stadil, co-owner of Hummel and Thornico ways, because while Fritz Hansen had to learn how to explain Danish Design to the European market in the fi rst wave

68 DENMARK’S EXPORT CANON

Henning Larsen Architects Foreign competition keeps you on your toes

Buildings are needed everywhere, so are a number of reasons for this: seeking In brief the whole world is the architect’s play- global opportunities allows the company to Export share: 45 per cent ground. Yet many still prefer to stay at grow. It is also challenging and inspiring for Turnover: DKK 179 million home. Henning Larsen Architects do not the company’s architects and it supports Employees (home/abroad): 157/60 understand why. growth, development and creativity. Industry: Architecture The driving force behind the company’s Founded: 1959 by Henning Larsen Ever since the company was formed back export strategy is the numerous architec- CEO: Mette Kynne Fransen in 1959, Henning Larsen Architects has ture competitions set up by contractors always worked abroad. They have built the worldwide. When the management is Lessons from Henning Larsen Norwegian University of Science and Tech- considering which competitions Henning Architects nology in Trondheim, the Ministry of Foreign Larsen Architects should enter, it is no ✳ Encourage an adventurous spirit to Affairs in Riyadh, capital of Saudi Arabia, longer merely enough that the project ensure that employees will not stag- as well as the Concert Hall and Conference seems exciting, it is equally important nate. Send them out to experience and Centre in Rejkjavik, Iceland, which only last that there is some kind of follow-up once research new markets year won the coveted Mies van der Rohe the project has been completed. A good ✳ Once you enter an emerging market, Prize, one of the world's most prestigious example is Germany, where Henning you must become better at making use architecture awards and just one of the Larsen Architects won the contract for of it. Getting in is often the most ex- many won by the company over the years. Siemens Global Headquarters in Munich pensive part, so use your new partners Although foreign projects have always and established an offi ce in the city. With to help you acquire new contracts in been a company feature, it is only within the Siemens project as a networking emerging markets last ten years or so that people have begun platform, Henning Larsen Architects has ✳ Look for new markets within the old referring to it as a specifi c export strategy. subsequently acquired further contracts ones. Globalization means that the Whereas the big overseas projects were and today employs a staff of 26 at their companies you work with will often often prestigious and professionally chal- Munich offi ce. These new opportunities do have subsidiaries or contacts in other lenging adventures, export is now a per- not only occur within the market in which countries. Networking is often the best manent part of company strategy. There the company is currently working. Col- way into new markets

69 laborators on a project are often interna- Architecture is so much more than beautiful buildings. It tional, and this also opens doors to other has a culture-bearing effect and plays an important role in markets. Success is all about networking “ productivity, innovation and creativity.” and developing the right relationships, something the company has been very Christian Stadil, co-owner of Hummel and Thornico successful at. Over the years, architects from Henning Larsen Architects have managed projects in Indonesia, China, the Caucasus, Saudi Arabia, Syria, Turkey, Nigeria, Norway, cause, from the outset, the company has Holland, England, Spain, Germany, Iceland worked on the premise that international and Denmark, to name but a few. In many markets require international members of countries, success has been so great that staff. The company has over 200 employ- the company has opened subsidiaries in ees, representing more than 20 different order to keep pace with developments. In nationalities, although this is only one addition to the head offi ce in Copenhagen aspect of internationalization. Through and the Munich offi ce, Henning Larsen development contracts and training, the Architects is now also represented in Oslo company directs the focus of its employ- in Norway, Riyadh in Saudi Arabia and ees out into the world. They are sent out Istanbul in Turkey. The subsidiaries employ to the various offi ces and encouraged to almost a third of the total number of staff, fi nd ideas for new projects in emerging and international business brings in about markets. half of the company’s overall turnover. It improves their professional skills to Focusing on the global market has be constantly challenged to think about ar- kept the company’s head above water chitecture in different ways, as well as the during a period when Western European challenges presented by different working companies in particular have been hard methods in other cultures. Henning Larsen pushed because of the fi nancial crisis. In Architects’ philosophy is that exposure contrast to many others in the industry, to other cultures and their architectural Henning Larsen Architects recorded a 50 traditions creates better architects: better per cent increase in turnover over the last architects, better buildings. Better build- four years. This has only been possible be- ings, better business.

Designit Follow the unforeseeable development

The company culture is Danish, the prod- They speak English but recruit glob- countries, does not necissitate burning uct is Danish Design but at Designit, the ally. In fact, recruiting a new nationalityis the bridges to your own. Although dif- employees and customers come from considered a virtue at Designit, and cur- ferent cultures have different ideas and all over the world. In just a few years, rently the team comprises 30 different preferences, it is important to have a Designit has become one of Denmark's nationalities. national company base, which provides biggest international design successes. But just building solid bridges to other the company with its identity. And when

70 DENMARK’S EXPORT CANON you are a Danish Design company, this is fer an all-in-one solution. Designit would. In brief obviously an advantage. Danish Design And so they did. Export share: 70 per cent is known the world over as a benchmark During its fi rst ten years, the company Turnover: around DKK 200 million for quality. Designit is defi nitely an inter- grew so rapidly that Designit became a Employees (home/abroad): 100/190 national Company, but it is also a Danish preferred supplier for the biggest Danish Industry: IT and design international company. Its customers are companies, including Novo Nordisk, Georg Founded: 1991 by Anders Geert Jensen Mikal never in any doubt about this. The Danish Jensen and Arla. Suddenly, they were Hallstrup and David Fellah love of anti-authoritarian management not only competing with other Danish CEO Main Markets: David Fellah and fl at managerial structures are evident companies but they also had international CEO Expanding Markets: Anders Geert Jensen no matter which of the company's 15 competition. So, they decided to take on offi ces you visit. Most of the employees the opposition in its own backyard. Desig- are called designers, although not all are nit wanted to prove it could also compete trained as such. The company's open plan internationally. offi ces are a veritable zoo of industrial de- The fi rst steps took them to Paris, Lessons from Designit signers, service designers, programmers, where the company opened an offi ce. This ✳ Follow the unforeseen development. economists, statisticians and even a was not initially a success. Not a single You cannot plan your way to success brain researcher, creating an atmosphere customer turned up. However, others had and certainly not export success. So, if in which divergent opinions and points of noticed the ambitious Danish company. In the opportunity arises to open an offi ce view come together to create cohesive Germany, a couple of enterprising design- or get orders from abroad, take it. Even solutions to customers’ challenges. It ers saw an opportunity for collaboration if it does not form part of your latest fi ve-year plan may sound as if Denmark's biggest de- and Designit opened an offi ce in Munich. sign success is built on lofty ideas and a This decision turned out to be one of the ✳ Recruit employees with as many dif- highly organised structure, but this is not best in the company’s history. Today, the ferent nationalities and professional the case. As they put it themselves, their German department is one of the most backgrounds as possible. If you are going to have international partners, strategy is opportunist. If a market seems profi table in the business. you need international employees. And promising, they will enter it. If a customer But more importantly than the suc- if you want to have a more alternative is exciting, they will begin working with cess, the German market opened the approach to your client’s problems them. door to other countries for Designit. And than that of your competitors, you need However, it all began with a strategic the opening of one door quickly led to an alternative team. decision. In 1991, three newly trained the opening of one more. Once you are ✳ Size is important. The world will only industrial designers found themselves at considered an international business, the come to you once you make your a crossroads in their lives. David Fellah, international customers appear. All they presence felt. Go after the big orders, Anders Geert Jensen and Mikal Hallstrup have to do when planning a new design even though you may not be that big either had to fi nd a job or live the dream is scan the list of companies who can do yourself. It is the only way you will they had often discussed as students, the job. Designit is on this list. And that attract the attention of international which meant starting their own business. places them in a stronger position than companies. They wanted to re-think a classic design their medium-sized competitors. company. However, instead of designing a The lesson is simple: seize the unfore- specifi c product, they wanted to think de- seen opportunity. Moving into Germany sign on a grand scale. They would design was not necessarily part of the plan for products and services, while also working Designit when the Paris offi ce opened, but with communication and branding. In a the opportunity arose. And that is how it sense, these are all different parts of the has been ever since: follow the unforeseen same picture, but very few companies of- development in a fast developing market.

Designit is part design and part industrial enterprise: it provides “all design solutions for businesses and they do it to increase their sales by giving them the edge Designit themselves have.”

Christian Stadil, co-owner of Hummel and Thornico

71 LEGO From international to global company

The LEGO Group knows its customers - The fi rst quantum leap towards the In brief children - and develops a constant stream Lego Group’s internationalisation was Export share: over 98 percent of new products to maintain their interest. taken in 1956, by then managing direc- Turnover: DKK 23.4 billion Flexibility and the ability to adapt quickly tor Godfred Kirk Christiansen, who went Number of employees (home/abroad): are vital to the company’s success. against the advice of all the export con- around 4,000/8,800 sultants who told him to stay away from Industry: Toys The production of 45 billion LEGO® bricks Germany, which at the time was the most Established: 1932 by Ole Kirk Christiansen and the fact that LEGO is the world’s third successful toy manufacturing country in CEO: Jørgen Vig Knudstorp largest toy manufacturer are not concepts the world. 'If we can conquer Germany, we you might normally associate with quali- can conquer the world, was his response. ties such as fl exibility, speed and being And true to his word, by ensuring LEGO constantly able to change and adapt. bricks’ appearance in the windows of Ger- Nevertheless, it is precisely these quali- man shops, while at the same time telling ties that have in recent years, enabled the German consumers how to build with the LEGO Group to improve its annual results little plastic bricks with the hollow tubes up to the point where, it is now about to in the bottom, the German market soon take the fi nal step from international to became bigger than the Danish market. global company. Last year, bricks were Since then, things hav moved fast. To- sold for more than DKK 23 billion, more day, North America is the Group’s biggest than 98 per cent of which was generated market, followed by Europe. Alongside from sales outside Denmark. these two core continents, the company is

72 DENMARK’S EXPORT CANON now expanding to include Asia as the new The third crucial success factor for Lessons from the LEGO Group growth market. LEGO abroad is to its ability to maintain ✳ They are sudcessfulat selling the same The growing Asiatic countries already a high turnover of new products, while at product worldwide, but marketing represent a signifi cant part of the LEGO the same time ensuring that they target must be relevant and adapted to the Group’s sales. Last year, sales to Chinese the right market with the right product at specifi c market and the culture you are consumers grew by 80 per cent and gener- the right time. 60 per cent of the LEGO selling to. ally in Asia, consumer sales grew by almost Group’s annual turnover comes from new ✳ In a market where newness equals 50 per cent. Its designation as a core mar- products, large numbers of which are success, it is important to manufacture ket indicates that the LEGO Group plans to introduced each year. New products are close to your market, so you can change be even bigger in Asia. The LEGO Group’s vital for maintaining children's interest if and when demand changes. experience is that if you want to enter a the world over. For them, newness equals ✳ In the toy industry, innovation is vital if new market, you have to be visible, both excitement. you want to keep children interested. in terms of product and sales. It is crucial As the development of a new product But innovation must be based on your for the LEGO Group’s growth strategy that usually takes from between one to three core product – for LEGO, it’s the bricks. its manufacturing facilities are close to the markets where the product is sold. Because once the consumers understand how to play with LEGO, the Group must be able to deliver on demand. And this can change very quickly, because its hardest LEGO has stayed true to its design and brand DNA but has critics - children - always want something also consistently managed to go in new directions, whether new. With manufacturing facilities close “ this has been into social media, animation or collaborations to their customers, the LEGO Group can be fl exible and adaptable. The second key with Hollywood.” factor in the Danish toy manufacturer’s Christian Stadil, co-owner of Hummel and Thornico success is the fact that the company owns its own factories. Following LEGO’s greatest crisis in the early 00s, newly appointed Manag- years, the LEGO Group’s development ing Director Jørgen Vig Knudstorp, departments must always be at the cut- outsourced part of the production to ting edge of what interests children – in external suppliers. However, production China as well as in the US. Development of was quickly brought back home again. the popular LEGO Friends series for girls Not to company headquarters in Billund, took four years to reach the shelves, from but to LEGO owned facilities close to the which they disappeared much faster than two core markets in the US and Western the Group could have imagined. Europe. The handling of millions of bricks But although innovation needs to be had shown itself to be more demanding speedy, the LEGO Group has no intention than the LEGO Group had imagined. To- of shortening development time for new day, having complete control of everything concepts. Because this is the reason from moulding to decoration and from why the LEGO brick is at the core of the assembly to packaging is vital for the Group’s philosophy; to develop toys that Group, so they can control quality and encourage children’s development and react quickly if the market changes. creativity.

73 74 DENMARK’S EXPORT CANON

The Chameleons

These are among the most innovative and adventurous companies in Denmark. They have taken strategic U-turns which mark a radical departure from their previous business models or have developed completely new products or service concepts to gain success in the export market. Denmark has quite a number of chameleon companies and FLSmidth and Fertin Pharma are two excellent examples. They have understood that global competition, characterised as it is by turbulence and great inconstistancy, constantly making new demands and that only the most active and agile companies can survive. At times, this may even require the management to redefine the company's raison d'être.

Fertin Pharma - The transformation from a sweet manufacturer to a pharmaceutical company has provided the foundation for a new growth adventure. Page 78.

FLSmidth - Globalisation and hard price competition persuaded the old cement company to develop a completely new business supplying cement plants, equipment for mineral plants and sale of service concepts. Page 80.

75 Chameleon companies are very different from each other and sulted in the company Fertin Pharma, manufacturing medicinal yet they also have many similarities: in the driving seat you will chewing gum from its Vejle plant. usually fi nd a board of directors and managers who are able to make controversial, tough and often unpopular decisions, Breaks with the organisational past outsourcing jobs from Denmark for example, and who in spite The most daring aspect in this type of transformation is the fact of the organisational problems still manage to survive the that from the outside, the company looks nothing like what it change. Many Danish exporters have completely changed their used to, which can be a potential risk. The transformation itself business structure due to almost seismic shifts in the marketing requires taking some tough and often organizationally unpopular landscape. decisions. FLSmidth’s decision to create a global value chain with, Two examples of this type of company are cement group at present, 4,000 engineers in India spelled the end of certain FLSmidth and chewing gum producers Fertin Pharma, previously types of job in Denmark. And Fertin Pharma's departure from the known as Dandy. production of traditional chewing gum also meant waving goodbye In 2004, FLSmidth had to seriously rethink its business when to a potentially huge market. There are many international exam- a Chinese company sprang up like a jack-in-the-box and entered ples of transformation being undertaken because it is the only the cement factory market, offering solutions that were 30-40 viable way forward. In 2002, 3M, the company primarily known for per cent cheaper than those offered by FLSmidth. The Danish its Post-It notes, began to manufacture sandpaper. The American company's resolute response was to break completely with company DuPont, who purchased Danisco, began as an explo- traditional thinking and create a new and more cost-effective sives manufacturer but today they sell glue, fi re extinguishers and global supply chain, as well as offering extra insurance and enzymes. And IT giant IBM has gone from producing punch-card development services, allowing FLSmidth to retain its techno- machines to massive main-frame computers and calculators logical leading position. and today they focus on software development and consultancy Fertin Pharma – a name few today will recognise but most services. We tend to forget that all businesses change over time. Danes will almost be able to recall the taste when you mention Who today would associate Vestas Wind Systems with a small the name Dandy, is another example of a chameleon company. blacksmiths shop in the town of Lem in West Jutland, which was After 1989, when globalization fi rst began to take hold, Dandy where the company was started in 1898. realised that marketing brands such as V6 and Stimorol from a Danish base was no longer viable. Companies have shorter lives On the other hand, Dandy possessed some highly specialised The pressure on businesses' ability to change and adapt is be- skills in the manufacture of nicotine chewing gum, which re- coming greater. In the export market, many Danish companies

76 DENMARK’S EXPORT CANON

“ I met Bill Gates 15 years ago and he said, quite prophetically, that Microsoft’s greatest competitor in five years time probably had not even been started yet. This illustrates how one should think about business in a global world, where the competition is forever changing.”

Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more

will be faced with the same challenges that faced FLSmidth and areas, the quality of the product becomes less important. The Fertin Pharma. company then begins to reward its sales people because they Technological development is so rapid that it will constantly are the ones directly generating profi t. They get promoted, while change market conditions, customer relations and business the product developers get demoted and become demotivated. models. The former Apple founder is not alone in this analysis. According Changes such as these are due to what Professor Clayton M. to Steve Denning, management theorist and blogger for Forbes Christensen has called 'disruptive technologies'. This illustrates Magazine, all management functions in a company that do not the increasing tendency of new technologies to completely focus on customer needs can become a problem. He talks about change the game and we must either react to this immediately, accountants and fi nance people who are only concerned with or allow other companies to pass us by. It is not an easy thing to cost-cutting. These people will never become customer-focused do, and many businesses cannot make the change. but highly regarded despite systematically contributing to the Analyses of the life-cycles of businesses show that the need future demise of the company, he explains. to think radically is greater now than ever before. One study undertaken by Innosight, based on information in the American Only the paranoid survive S&P share index, showed that while a company might have had In Danish management circles, we notice a tendency to almost an average “shelf-life” of 68 years in 1958, this was down to 25 want babysit the customers to keep them happy. LEGO's CEO in 1980 and it is only 18 today. Within innovation circles many Jørgen Vig Knudstorp has also describe his almost paranoid ten- people seriously contemplate the reasons for the apparent life dency to keep an eye on how the organisation retains its customer crisis that many companies will face. There is some agreement focus. If attention is increasingly turned to internal issues, he will that one solution could be paying greater attention to customers' intervene, otherwise focus may be distracted from the company’s needs and the changes this may require. This may sound elemen- raison d’être, which is fulfi lling the needs of the customer. Perhaps tary, but is often quite diffi cult to carry out in practice. there really is something in former CEO of Intel, Andy Groves’ famous comment that “Only the paranoid survive.” The focus on profit can affect business Steve Jobs, the deceased founder of Apple, had a theory that at some point all companies forget their customers in the hunt for profi t. In Walter Isaacson's 2011 biography, Jobs states that when a company does something well, like inventing new products and thereby almost creating a monopoly in certain

77 Fertin Pharma From sweets to pharmaceuticals

Dandy went from manufacturing classic chewing gum, and Fertin Pharma which, In brief chewing gum such as V6 and Stim- among other things, produces nicotine Export share: 99 per cent orol to upholdnig a leading position in chewing gum. Fertin Pharma is a classic Turnover: DKK 592.3 million the pharmaceutical industry of medicinal chameleon company. Employees: 550 chewing gum as Fertin Pharma, employ- The former Dandy group, owned by the Industry: Pharmaceutical ing 550 people in Denmark. Today this Bagger-Sørensen family, has shown that Founded: Fertin Pharma was founded in seems logical and well thought through, it is absolutely possible to change horses 1978 as a subsidiary of the chewing gum but in 2001 it seemed like an extremely mid-stream and that in a hyper-globalised manufacturer, Dandy. risky course of action. world and it can be absolutely necessary CEO: Søren Birn to make drastic changes to a business Few people will have heard of Fertin model under pressure. This was the situa- Pharma, but when you say Dandy, it will tion Dandy faced at the end of the 1990s. probably bring back some tasty memories The chewing gum market was undergoing Lessons from Fertin Pharma for many. The major chewing gum pro- a period of consolidation and it was obvi- ✳ Be sensitive to and understand the ducer in Vejle, a company behind some ous that the company in Vejle would not developments in the market and make of the most prominent brands such as be able to maintain its dominant position the change in good time. V6 and Stimorol, or Dirol in the Russian in the market. Of the two companies that ✳ Aim at areas with a high degree of market, is now a completely different remained following the sale of the best knowledge and knowhow - then the company to what it was during its heyday known brands to Cadbury, Fertin Pharma wage share becomes less important. in the 1990s. is an example of how one part of a larger ✳ Always look for competencies within Today, the group comprises Gumlink, company can suddenly blossom in its own the company that can be developed which produces so-called ‘private label’ right. But Fertin Pharma is not just a story into independent business areas.

78 DENMARK’S EXPORT CANON of how some considered decisions have oral ingestion of medicinal substances. proved worthwhile. It's also an example According to the company, the lesson of how different competencies can come learned from the change of course at together in new ways, while keeping jobs the beginning of the new century is that in Denmark at the same time. Today, it is necessary to make diffi cult decisions Fertin Pharma comprise two factories with and drive the business from a strong 500 employees, and they are considered and rational position. With the sell off of a leading producer of nicotine chewing these well-known chewing gum brands, gum to global pharmaceutical brands. In the media was fl ooded with stories about hindsight, it was a wise decision, but back 'selling of the Danish family silver', but in 2002, it was one that bore consider- the Bagger-Sørensen family believes that able risks. The aim to become a market there is no room for nostalgia in business. leader in nicotine chewing gum meant that Fertin Pharma had to gain a foothold in the American market. The company therefore invested USD 100 million in a new plant that had to be approved by the FDA (Federal Drug Administration). The new Vejle plant was completed in 2004 and it was then just a question of waiting to see if Americans would buy the product. Happily they did. Curiously, the The company has re-defined itself, which is impressive. But it's decision to try and enter the American also important to remember that the change of course from market explains why Fertin Pharma is still “ confectionary manufacturer to pharmaceutical company has in Denmark. The process required some competencies that had been specifi cally required massive investment and that Fertin Pharma is only just developed in the Danish organisation. In beginning to find its feet.” addition, the wage level is less important Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more in the market for fast consumer products – which explains why the other former Dandy company Gumlink, now produces its goods in Turkey. With the formation of the new company, Okono, the former Dandy group is continuing its developmental journey. The company is collaborating with the Altria Group, owner of the tobacco manufacturer Philip Morris, on the development of smoke-free nicotine products. With this collaboration, the company is adding to its particular competencies in the fi eld of the

79 FLSmidth The company that reinvented itself

In 2004, the FLSmidth Cement Group gan re-thinking what the company was all In brief was suddenly challenged by Chinese about. What did customers actually buy, Export share: 99 per cent. competitors who could supply cement and what was it they wanted to buy? How Turnover: DKK 24.849 billion plants at 30-40 per cent less. This could FLSmidth do better and surmount Employees (home/abroad): initiated the development of a new type the challenges it had always faced and 1,691/14,200. of company whose business concepts which had created an insecure founda- Industry: Cement and mining are centred around its customers' tion: the fact that customers typically Founded: 1882 by Frederik Læssøe individual needs. bought cement plants when the global Smidth economy was at its peak but curbed their CEO: Thomas Schultz There was a certain amount of anxiety spending in times of crisis? One of the at FLSmidth's headquarters in Valby, Co- most radical suggestions was to forget penhagen, in 2004. The group’s manage- the products for a while and concentrate Lessons from from FLSmidth ment, at that time led by Jørgen Huno on selling services instead. ✳ Do not be afraid to make strategic, risky Rasmussen, had heard that new Chinese Whereas in the past, FLSmidth would and also unpopular decisions when the competitors had surfaced in the cement build the cement plant and leave the market suddenly changes. plant market, which FLSmidth and some premises as soon as the keys were hand- ✳ Listen to customers and ﬁ nd out what Western competitors had dominated for ed over, the group would now offer to run they need. This can often be the most over 100 years. And they were not just and maintain the plant. This turned out direct way to further develop your busi- new competitors, the Chinese company to be just the service customers wanted. ness model. could build plants that were 30-40 per Since the changeover, the service busi- ✳ Build up foreign subsidiaries with mainly cent cheaper. In the boardroom they be- ness has grown by 15 per cent every local employees who know the market.

80 DENMARK’S EXPORT CANON year and now comprises 50 per cent of FLSmidth’s ability to react quickly is its the group’s turnover. And this small historical dominance in the global market adjustment has also had an interesting of cement factories, which soon provided side effect: service work provides very evidence that something was happening. useful information on how the plants can FLSmidth has always had a global be adjusted and adapted so they become outlook. Shortly after founding the com- even better in the future. pany in 1882, Frederik Læssøe Smidth, Developing newer and better plants Alexander Foss and Poul Andersen trav- was another response to the Chinese elled to the US, the Far East and South challenge. Since 2004, investments in America to offer their services. The Group research and development have doubled is international to the core. Its working and now FLSmidth has one of the most language is English and the ability to advanced test centres in the world, at Mariager Fjord in Jutland. FLSmidth recognised that the group would never be able to sell plants and services to match the Chinese prices, but on the other FLSmidth has survived a long transformation, and over a num- hand, the company could place itself in the technological leader position and “ber of years, they have succeeded in redefining the company, develop energy-friendly plants with lower enabling it to keep its original base in Denmark.” running costs. In spite of the increased Lone Fønss Schrøder, board member, Volvo, Handelsbanken value, however, total costs also had and more to come down. This was achieved by establishing an engineering department in Chennai in India, where FLSmidth now employs 4,000 engineers. cooperate across cultures is part of its The plan succeeded and today FLS- DNA. There are 60 different nationalities midth is a healthy business which has in the company's head offi ce in Valby, adapted to the global winds of change. Copenhagen. The company has a strong position in the FLSmidth has also developed the fi eld of cement factories and equipment most appropriate organisational model for mineral extraction. to suit its individual markets. Most of the However, the Chinese jack-in-the employees are local, although there are box story illustrates how rapidly circum- usually a couple of Danes in manage- stances in the global market can change. ment and thus FLSmidth has been able It also shows how important it is to be to achieve the best possible form of local able to react quickly and make some integration through awareness of the diffi cult, controversial and often risky indigenous culture and the use of local decisions. One of the explanations for employees' networks.

81 82 DENMARK’S EXPORT CANON

The Born Globals

Some businesses struggle for years to get out into the world. Others are 'Born Global'. Not prepared to follow the traditional route, the new generation of companies is not prepared to wait until they have secured a base in the domestic market before launching themselves into the export arena. Some companies may feel limitated, but the 'Born Global' companies do not know the meaning of the word. They have set their sights on being global from the outset. Their offices may have a Danish postcode but the customers are located all over the world.

Io-Interactive - Hitman fascinated millions of children and young people all over the world, but the innovative company was sold to a foreign owner to escalate its success. Page 86.

Orana - The fruit juice company from Funen built its global export success by targeting markets at the periphery first. Page 87.

Universal Robots - In just five years, an accelerated growth plan has ensured global success for these flexible Danish robotics solutions. Page 89.

Maersk Line - The shipping giant was Born Global long before the expression became part of our vocabulary. Today, Maersk is a model for many young global businesses. Page 90.

83 “Too many businesses think they have to develop the home market before they can become international. But many products and business concepts would never survive in Denmark alone. An international roll-out plan is therefore vital right from the start.”

Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more

Many of the so-called 'Born Global' companies are products of the than that. It also makes entrepreneurs more aware of what is fall of the Berlin Wall, which dramatically altered the global trade happening outside Denmark. And once they get used to thinking map. Since 1989 and the liberalisation of trade, all the world's outside the Danish border, the fi rst draft of the business plan will markets have opened up and Danish export markets are no longer automatically be aimed at international suppliers and partners. just Germany, Great Britain and Scandinavia. Russia, China and In fact, these companies do not even consider Denmark as a the rest of the world are now open to Danish companies. At the natural place to begin trading. Instead of considering the geog- same time, the internet has grown, foreign telephone calls have raphy, they think about where the customers are and these can become cheaper and the price of air travel has also reached an be found in Slagelse, as well as in Shanghai, Stuttgart, Salvador affordable level. All of this has made it easier for entrepreneurs to and San Diego. They gravitate much more naturally towards think along export lines right from the start, and a new generation customers and partners across national borders. of 'Born Global' businesses has shown much higher growth and levels of job creation than other Danish companies. When Denmark becomes too small The ambition to trade with the whole world means that the 'Born Born to export Globals' have a global strategy from the start, which is where A 'Born Global' company is characterised by having an export they differ from most other Danish companies, who primarily share of over 25 percent within the fi rst three years. It is not see themselves as Danish businesses in a Danish market. If actually a new phenomenon. Denmark's biggest company, the they have export plans at all it is usually to master the domestic A.P. Møller-Mærsk Group was a 'Born Global' company from market fi rst and then move on to foreign ones. This not only the outset. At that time, at the beginning of the 20th century, delays the company's forward march into foreign markets, what the concepts of globalisation and 'Born Global' companies did is worse is that this attitude smothers many good business ideas not exist, but Mærsk is still the prime example of what the new from birth. Denmark is a small country and the market is not big generation of 'Born Global' companies might be able to achieve. enough to support all products and services in the long run. Since the fall of the Berlin Wall, the front runners in the new Irrespective of whether we are talking about Mærsk's con- generation of global businesses have had three recognisable tainer ships or Universal Robots' robotic arms, Denmark is just features: the founders have a good international network, em- too small for companies to stay at home. ployees have good IT skills and the goods are usually niche products in one way or another. This is the short-cut out of Denmark. The virtual life Having contacts abroad always makes it easier to navigate in In recent years, there has been an increase in companies that foreign markets, although an international network does more think in global terms from their inception. One reason for this

84 DENMARK’S EXPORT CANON

“Born Global companies are the best examples of who and what Denmark can profit by. Denmark should be a source of highly trained and specialised competencies with the world as its marketplace.”

Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more

is the pace of technological development. Businesses market should be capitalised on. Having a global vision has proven fruitful themselves digitally, their customer service is digitalised and from day one. Entrepreneurs, who start out with an international they also make great use of digital tools in their internal work. business plan grow faster than those who only think nationally. Why sit in grey conference rooms when you can use virtual This was conclusion researchers at the University of Aarhus and conference facilities? This makes a company enormously ﬂ exible the University of Southern Denmark reached last year, based because they are not bound to the ofﬁ ce. on their extensive mapping of Danish start-up enterprises. An emphasis on IT is also common to most of these compa- 'Born Globals' also achieve a higher turnover and employ more nies, not least with regard to their products. Most 'Born Globals' people faster. Export and growth factors go hand in hand. For are IT businesses; Io-Interactive, the company behind the Danes dreaming of running their own businesses, 'Born Global' computer game Hitman. Their products are digital, which makes companies present a strong recipe for growth. They strengthen them easier to export. And when your product is bits and bytes, the country's connection to the world outside its borders, create storing and transportation does not cost much, nor is there any jobs and improve the balance of payments. Of the almost 20,000 sell-by date. Companies can easily distribute their products new businesses that spring into life each year in Denmark, all throughout the world and without great investment in logistics. have good reasons for thinking in global terms from the start. Quite simply, it makes sense for their business. Just look at what Change in mentality Maersk Line has accomplished from travelling the seven seas. Even though most 'Born Globals' are to be found within the IT industry, other businesses can also join in. One example is Orana, producer of fruit juice concentrate for dairies and juice manufacturers in more than 40 countries. In their case, having an international outlook from the beginning made all the difference. Instead of thinking of themselves as a Danish company in a Danish market, Orana have always thought of themselves as a global company in a global market. Manufac- turers worldwide want Orana's products and it is therefore quite natural that the company should move into export. Being 'Born Global' means locating the universal in your product. If the product strikes more than one single Danish nerve, it has the potential to reach a much wider market abroad, and this

85 Io-Interactive Be yourself

November 2012, fans of the suited as- This cultural difference can also be seen In brief sassin, Hitman, were once again waiting in the marketing of the new games. Here Export share: 99 per cent in mile long queues to get a copy of the everything from fashion to music must be Turnover: DKK 176 million popular computer game. This was the fi fth adapted according to whether the market Employees: 117 version of the Danish export success to is the US or Europe. Today, the US, Great Industry: Gaming 120 different markets. Since its inception, Britain and Germany are Io-Interactive’s Founded: 1998 by Jesper Vorsholt Jør- the Danish company Io-Interactive has largest markets, the US providing the gensen, Rasmus Guldberg-Kjær, Martin been developing games for the interna- largest turnover. And the Japanese market Munk Pollas, Karsten Lemann Hvidberg, tional market. is also developing rapidly, helped out by Jacob Andersen, Janos Flösser and David Guldbrandsen Io-Interactive's parent company, Square CEO: Hannes Siefert Thirteen years after the balding assassin's Enix Europe, which is part of the Japanese fi rst killing, the game is still in the top ten publicly listed company, Square Enix. of most popular computer games. Today, In 2004, Io-Interactive was sold to a Hitman, from the Danish games developer foreign owner. and with the backnig of a Lessons from Io-Interactive Io-Interactive, has more than 2.4 million new global games giant, Io-interactive can ✳ The development of computer games Facebook fans and more than 24,000 fol- create more ambitious productions and such as Hitman is so expensive that lowers on Twitter. market itself at the level necessary for it is important to think of the world as The latest version alone has sold more gaming in the global top ten. A product such your market immediately if you want to than 3.6 million copies. Its fi rst fans have as the latest Hitman has involved around recoup your production expenses. And even if the basic product is the same, now reached an age where their games 1,000 people and the costs are only cov- the language, music and not least consoles have been replaced by shorter ered when a certain volume has been sold. the marketing must be adapted to the games sequences on smartphones and Another way of creating a good busi- individual market. tablets. This requires new products for the ness in Denmark is effective outsourcing. new platforms and at lower prices because A small part of the business is responsible ✳ In a market where there are many competitors, it is vital that customers players on mobile phones and tablets play for its long-term development, it is about can easily tell your product from the oth- for shorter lengths of time than those play- knowing your strengths and weaknesses ers and recognise it when you produce ing on computers. and leaving everything but your domestic a new one. While other players choose Io-Interactive has witnessed an ever market to others. For example, composing to get their latest products out quickly, chaning business model and innovation a specifi c piece of music or being in charge Io-Interactive maintains that originality has been their main focus ever since of the mass production. comes before “speed to market”. the company was started back in 1998. The company will continue to increase The company's recipe for global success its outsourcing in order to remain competi- is maintaining its originality and never tive from the beginning, More departments copying its competitors. Once a solid brand name has been established, it is important to keep it on course and make it easy for customers to fi nd and recognise. In the computer games industry you Io-Interactive can inspire young people so they understand that have to think globally. The Danish market even their own little nerdy business can become a star and be is much too small to be profi table. Games “ from Io-Interactive are identical in all coun- in demand.” tries, but are available in many different Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more languages and there are also elements that only occur in some in one country's version but not in another’s.

86 DENMARK’S EXPORT CANON will be transferred to studios in Europe and In most cases, Io-Interactive uses local Asia, new deals must be made with new distributors to ﬁ nd the right marketing partners, and more productions must be strategy for getting the game onto the lo- produced externally. cal market. This was the case with Turkey, This will allow Io-Interactive to hold where Hitman has a big fan base but where onto its core skills - the creative process Io-Interactive do not sell as many games and development. Recently, the company because of a loophole in the law that turns streamlined its core skills, and now the a blind eye to pirate copies. However, the company is focusing all development on its right partner is now changing customers blockbuster success Hitman, while keeping are now happily buying original versions in all other projects on hold. increasing numbers.

Orana Take over small markets while all the others fight over the big ones

Exporting is not diffi cult. You do not need Niels Østerberg bought the company in In brief market analyses, only adventurousness. 1999. From its fi rst steps as an independ- Export share: more than 90 per cent Just get out there and do it, says Orana, ent company it regarded the whole world Turnover: DKK 184 million the fruit juice company from Funen - and as its natural domestic market. Even Employees (home/abroad): 52/168. keep in mind that no market is too small. then, the name Orana is not well-known, Industry: Food although the taste will be. Since before it Founded: 1984 as part of Rynkeby You do not need extensive market analy- became independent from Rynkeby, the Mosteri (Rynkeby Juice) A/S. Became an ses to fi nd out where to begin your export company made fruit concentrate for the independent company in 1999 drive. Just try it out bit by bit. Even in the big dairies, juice producers and bakeries CEO: Niels Østerberg markets no one else will touch. In fact try in Vietnam, Malaysia, Egypt and more than those markets fi rst. It is all about looking 40 other countries. Exporting has come to the future, and not just for the coming naturally right from the start and is driven year or two. in part by business strategies but also by This is the message from Orana, the sheer adventurousness. The company's small company with the big success story. profi ts are invested in new projects in The name will not mean much to most new countries such as Vietnam, India and Danish families, but if you say Rynkeby, Egypt, and in all these three countries, the company's home town on Funen, you Orana has been such a great success that will undoubtedly get a reaction. it has opened its own factories to be able Orana was part of the juice manufac- to supply the demand. In the development turer Rynkeby when Development Director phase in Vietnam and Egypt, Orana supple-

87 mented its own contacts and experience Orana's representatives visit larger dair- Lessons from Orana with support from the Danish Ministry of ies, juice manufacturers and bakeries to ✳ Reinvest everything and maintain Foreign Affairs and the Investment Fund convince them that they should try Orana's development. Do not export to live, live for Developing Countries. products. It is not too diffi cult, says Orana, to export. The support was in part a cash injec- you just have to knock on the door and this ✳ Save on consultant's fees, buy a plane tion (in the shape of co-funding for the is how the company has acquired most of ticket instead. It pays dividends to factories) and in part advice on local rules its customers. visit local areas and create your own and regulations. The factories have been The overall strategy is to take on as contacts. Use local knowledge that can a great strength for Orana in more ways many of the small markets as possible be supplied by Danish agencies such as than one. First and foremost, it has meant while leaving the compition to fi ght over The Confederation of Danish Industries that Orana is closer to the raw materials. the larger ones. Which is why Orana (DI), The Ministry of Foreign Affairs and But because the factories are closer to the currently dominates the entire market in the Investment Fund for Developing customers, delivery time has also been Vietnam, while sitting on less than one per Countries. considerably reduced. cent of the Chinese market. The general ✳ Go for the small markets while your Transporting goods from Denmark to feeling is that it is more trouble than it is competitors fi ght over the big ones. You India is very different from transporting worth; much better to secure the smaller will have these markets all to yourself goods from Vietnam to India. It takes markets. Today, Orana sells to the Middle and if one goes down, others will keep you afl oat. longer and is also more expensive. The East, Europe, Asia and Africa, and the shorter response time also fi ts Orana's im- rationale is simple, these markets are not age of itself - small but fast, which is also all likely to crash simultaneously. why the company supplies all the smaller markets that big companies will not touch with a bargepole. And now, Orana has its sights set on Africa. Prospects look good Orana is inspirational because without any fuss, the company in Zimbabwe, Kenya and Tanzania. They has launched itself in the global marketplace. will not be making a killing right now, “ but in time, these countries may prove a They prefer action to staying home, daydreaming behind a desk.” goldmine. These are three countries on their way up and when the standard of liv- Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more ing rises, Orana's experience is that there are always three requirements: food, drink and mobile telephones. The company cannot provide phones, but the fi rst two Their latest adventure is in Myanmar. are within its areas of expertise. Everyone Orana believes this will be the new Thai- likes fruit and Orana can supply the taste land, only practically no one has caught of fruit in both large and small amounts on to it yet. It is a slow market, but there very quickly. And with that approach, it is is progress, and no market is too small as just a question of getting on with the job. long as there is progress.

88 DENMARK’S EXPORT CANON

Universal Robots Visibility and size open doors

In less than fi ve years, Universal Robots, in Odense, they contribute to ensuring that In brief from Odense has gone from selling this small Danish robotics comet under- Export share: 95 per cent. its small fl exible robots exclusively to stands its growth markets. Turnover: DKK 76 million the Danish market to having a global For Universal Robots, it is not so much Employees (home/abroad): 75/6 presence. a question of whether there is a market or Industry: Robotics not, but more a question of fi nding the right Founded: 2005 by Esben Østergaard, Universal Robots was founded in 2005 way into the specifi c markets. The com- Kasper Støy and Kristian Kassow and sold its fi rst robots in Denmark in pany's small robots can replace their larger, CEO: Enrico Krog Iversen 2008, then in Germany in 2009. Just heavier and much more expensive prede- one year later, the whole of Europe was cessors and make it possible to automate Lessons from Universal Robots on its books, then Asia, then the US. And a lot more than previously. for example, the ✳ When your ambition is to reach as just this summer, the Chinese authorities process involved in laying small slices of many countries as possible in a have approved the establishment of a pepperoni on a pizza, which was what gave short space of time, it is important subsidiary. An accelerated growth plan is the company from Funen the idea in the to adopt a simple approach to new a prerequisite for success if a small Dan- fi rst place. As everyone is always looking for markets. The company always goes ish company wants to be the leader in the cheap solutions that can increase produc- through representatives to gain entry fi eld of small, fl exible robots, according to tivity in all areas, Universal Robots can look to a new country. It takes too long to Universal Robots at least. Because, the forward to great growth opportunities in the do it yourself and would affect the best protection of a new business and a future, and these will be capitalised on by company's position as pioneers. new technology is the development of new entering new markets quickly, either via ✳ Universal Robots supply a standard products and increasing ownership of the the company's own subsidiary or through a product to their representatives who niche so that when competition arrives, local supplier. The aim is to make it as easy then undertake the adaptation of the Universal Robots will be to small robotics as possible and to use the same tactic in all product to the customers' specifi cations what Kleenex is to paper handkerchiefs, in markets. With rapid growth on the agenda, themselves. the words of CEO Enrico Krogh Iversen. there is not always time to build everything ✳ Instead, Universal Robots use a lot of The precondition for maintaining oneself, so Universal Robots supplies the energy paving the way for their repre- this level of ambition is innovation. The robots, while the company's partners in sentatives by coming out personally company's largest department is therefore the individual countries fi t the holding tools to talk about the company and its pio- the development department, employing and other applications that the end user neering technology. Size and visibility a quarter of the workforce. Rapid growth requires. means a lot in the export market. If you are a smaller player you have to use constitutes a challenge in terms of fi nd Universal Robots uses the same mar- muscle to look bigger. ing suitably qualifi ed employees. The CEO keting strategy in all its markets. This is insists that development must stay in primarily to make Universal Robots visible Denmark, and at the moment, Universal and make potential customers aware of Robots imports development staff from the existence of the small fl exible robots other countries to meet requirements. At and more importantly, that they are already present, the company has 13 different being used by well-known customers, nationalities and from their headquarters which is why it is vital that the company

89 gets international references that can open An example of a new technology developed in Denmark hitting doors to a given market and show how the a megatrend and helping to solve one of the great challenges of technology can be used. Universal Robots “ globalisation. Globalisation has meant the outsourcing of many has noticed that size si important outside of Denmark and with the right customers jobs to low-income countries, where living conditions are often as references, it can appear bigger than poor. Robots can free many people from poor living conditions, it actually is. Similarly massive exposure allowing them to concentrate on other things such as education. in the right media can do the same job. According to CEO, Enrico Krog Iversen, Robots will help make the world a level playing field.” Universal Robots' success in the export Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more market is due to the company's belief in its product and daring to think big from the beginning. The company never looked to market analyses before venturing out into the marketplace, instead they found local partners that became the link between Universal Robots and the end user.

Maersk Line Fingers on the global pulse

The shipping company, Maersk Line was the company has been able to adapt to In brief global from day one. Ever since 1904, new global trading patterns, keep competi- Export share: over 99 per cent. the company has expanded its shipping tors at bay and achieve the status of the Turnover: DKK 150 billion activities from its Danish head ofﬁ ce, world's largest container shipping com- Employees (home/abroad) 1,100/23,900 while at the same time adapting its busi- pany, with a global market share of 14.5 Industry: Shipping. ness to the global market by delegating per cent. A share that further elevates Founded: Captain Peter Mærsk Møller and responsibility to its employees around Maersk Line and its parent company A.P. his son, Arnold Peter Møller. the world. Møller-Mærsk to standard bearers in a CEO: Søren Skou. cluster of Danish maritime companies In one sense, the development of contain- that, according to ﬁ gures from the Ministry er shipping company, Maersk Line, is a re- of Trade and Industry, are responsible for minder of how the world has become even 24 per cent of Denmark's total exports and more globalised since 1989. Before the employ 80,000 people in Denmark alone. fall of the Berlin Wall, all the most impor- For many years, it has been Maersk tant trading routes from Asia went to the Line's strategy to be a presence in all US and Europe. But today, to an increasing corners of the world and to participate in extent, goods are also transported from growth where and when it happens, even if the rapidly growing developing countries to this strategy can try one's patience. Thus, the developed markets in Europe and the the company was already in China in 1975, US. A global strategy and a global mind-set some years before Den Xiaoping's 1978 inherited from the company’s founder, go a market reforms. Maersk Line has had long way to explaining how over the years representatives in India and a number of

90 DENMARK’S EXPORT CANON

African countries long before these coun- run its organisation and systems with a Lessons from Maersk Line tries' macro-economic fi gures rocketed. keen eye on the future. Maersk Line is part ✳ Being the fi rst player in a new market Maersk Line now has 30 offi ces in Africa, of an industry where costs are constantly pays off, as does the understanding of with approx. 1,500 employees. under pressure. Transporting a container being local on a global scale. A large part of their global success can from Hong Kong to Rotterdam is relatively ✳ Delegation and rotation of employees be ascribed to a particular focus on talent easy, so prices are kept low by discount creates growth and prevents narrow developing. Year after year, one trainee af- companies. But as the container industry's silo-thinking. ter another has been trained to serve the answer to Irma (Danish quality supermar- ✳ Always look fi ve to ten years ahead and company and been given great responsibil- ket), Maersk Line uses other parameters plan your business accordingly. Global ity. Many of these trainees were sent to the such as easy order processing and a green growth can mean sudden and extreme farthest corners of the globe, both during profi le, which is only now, after many growth, so it is important to have all and after their training, entrusted with the years' effort, being requested by their your systems in place to cope with it. job of building up a business. A signifi cant large customers. Since 2007, Maersk Line ✳ Maintain objectivity in relation to new element of this was the great amount of has reduced its carbon emissions per unit ideas and markets but remember that freedom they were given to carry out the of freight by 25 per cent and the aim is a the fi rst loss is often the smallest and task. They were also given a mandate to reduction of 40 per cent by 2020. that there is a limit to everything. adapt the company to local conditions wherever in the world they happened to be stationed. The responsibility was, in other words, enormous, although a great degree of delegation of responsibility was part of company culture since the early days, Although Maersk Line is global in outlook, the company has tra- when company captains plied their trade ditionally had a very Danish recruitment base. This has influenced on the seven seas. Because of the diffi cul- “ ties in communication, it could be months the entire maritime sector in Denmark, with trainee programmes, before anyone heard from them, and so maritime schools and marine engineering courses.” they were obliged to act independently. Lone Fønss Schrøder, board member, Volvo, Handelsbanken and more Maersk Line’s strategy of maintaining a solid position in the global market has also meant participating in an ongoing consolidation and thus also take-overs. In 1999, Maersk Line bought its competitors, Sealand and Saf-marine, and in 2005, it New ideas are, to a large extent, still took over the Dutch container company developed in Denmark, where most of P&O Nedlloyd. However, expansion has the 1,100 employees work with strategy- also taken its toll and these experiences oriented activities: new concepts, organi- are now all part of the Group's shared his- sational problems and action areas. One tory. The purchase of P&O Nedlloyd in par- action area that has borne fruit in recent ticular caused problems. A new IT system years has been the transportation of designed to handle all the new customers foodstuffs in so-called 'reefer ships', which was delayed, so many procedures had to require great knowledge of the contents be done manually for a prolonged period. of the containers. Today, Maersk Line has Maersk Line gained much experience 25 per cent of the world market in reefer from this and today, the company tries to shipping.

91 The canon panel

The 30 companies in the canon were chosen by the canon panel's seven expert members:

92 DENMARK’S EXPORT CANON

Thomas Bustrup Christian T. Ingemann Helle Søholt, Director, The Confederation Director, The Danish Chamber Partner and CEO, of Danish Industry of Commerce Gehl Architects

Thomas Bustrup is Director of Christian T. Ingemann is Director Helle Søholt is co-founder and CEO International Activities at the of Dansk Erhverv (the Danish of Gehl Architects. The company Confederation of Danish Industry. Chamber of Commerce), a member works on projects in cities all over He has worked for many years with of the Danish Growth Council and the world, including Vancouver, the international aspect, including the Danish Tax Council. He is a for- Mexico City, New York, Sao Paolo being responsible for the CDI’s mer CEO of Geelmuyden.Kiese as and Copenhagen, which has won work on globalisation from 2005 well s CEO and Country Manager her many prizes and much recogni- to 2007, in collaboration with the of Burson-Marsteller. Christian T. tion. Helle Søholt is also a board government's Globalisation Coun- Ingemann has a law degree from member of Realdania (philan- cil. He has a politics degree from the University of Copenhagen as thropic association) and The Blue University of Copenhagen and a well as an an MBA. Planet (the Danish Aquarium). PLD from Harvard Business School. She trained as an architect at The Royal Danish Academy of Fine Arts and studied at the University of Washington.

Christian Stadil Lone Fønss Schrøder Philipp J.H. Schröder Per V. Jenster Co-owner of Hummel Board member, Aker Solutions, Professor at the Institute of Eco- Professor at the Nordic International and Thornico Handelsbanken Volvo and more nomics, the University of Aarhus Management Institute, China and Nyenrode University Holland

Christian Stadil owns Thornico A/S Lone Fønss Schrøder is a member Philipp J.H. Schröder is Professor Professor Jenster is an economist and the sports equipment com- of the boards of Aker, Volvo and in the Department of Business and who was appointed as Professor pany, Hummel. He is Chairman of Handelsbanken. She has more Social Sciences at the University and Chairman of the Board of the the Board of both companies. He is than 30 years international experi- of Aarhus, Institute of Economics. Nordic International Management also a board member of numerous ence and is one of Denmark's most He is also a member of the govern- Institute in Chengdu, China in other companies, advisory boards experienced senior managers. ment's Productivity Commission, 2010. He was Professor at the Chi- and think-tanks. He is well-known She has held leading managerial Director of the Tuborg Research na Europe International Business for his personal and innovative ap- positions in A.P. Møller-Mærsk from Centre for Globalisation and School in Shanghai in 2005 and is proach to management and busi- 1982 to 2003 and was CEO of Wal- Firms and part of the Univer- also a Professor at Nyenrode Uni- ness philosophy and has written lenius Lines from 2005 to 2010. sity of Aarhus. Philipp Schröder versity in Holland. He holds a PhD the book Company Karma. He is She is co-founder and partner of has researched globalisation, in Strategic Management from the an internationally popular speaker the consultancy company, PGU international trade and business University of Pittsburgh, USA and on subjects such as management, Norfalck. Lone Fønss Schrøder for many years and is one of the has advised global groups such as branding, creativity and innovation. has a business degree from the leading experts in the obstacles Exxon, IBM, Unilever, Nestlé and Copenhagen Business School and and barriers that export companies Novo Nordisk. In 2004, he received a law degree from the University of experience when they market their the Danish Marketing Award for Copenhagen. goods globally. his work in establishing the MBA programme at CBS (Copenhagen Business School).

93 The 50 semi-finalists

94 DENMARK’S EXPORT CANON

De 30 finalister Denmark’s Export Canon