ANNUAL REPORT 2012
QUARTZ+CO BAROMETER
ON THE HUNT FOR GROWTH BY DITTE ROSING-SCHOW
Nine top executives discussing growth potential in Europe August 15, 2012
E
urope is in flames! This seems to be the picture painted by the media, analysts and commentators alike. Greece, Spain and Italy have made headlines with their rapidly declining economies and massive unemployment. These years, conceptualising strategies for businesses in Europe has caused
“We don’t focus on new markets, but exclusively on how to gain MARKET SHARE in the European markets where we’re already present” Søren Schriver, CEO of Hummel
SØREN SCHRIVER CEO of Hummel
LYKKE FRIIS Member of the Danish Parliament, The Liberal Party
ANDERS WILHJELM CEO of GEA Process Engineering
JENS-PETER SAUL Group CEO of Ramboll Group
plenty of grey hair and sleepless nights for executives in all lines of business. While Nordic companies have traditionally looked for growth opportunities in the BRIC countries, the potential in their own European backyard is often neglected. EUROPE UP FOR DEBATE
But are there growth pockets in Europe worth exploring? This was the question nine top executives debated in August 2012 when they were invited by Quartz+Co and the
ANDERS HEEDE CEO of BDO
The Quartz+Co Barometer is based on a survey including more than 400 Danish companies and was conducted in the summer of 2012. In August 2012, the survey was followed up by a panel debate hosted by Quartz+Co between nine top executives about “Growth in Europe”.
QUARTZ+CO
Decompose Europe and look for growth regions 1. Reconfigure the borders: Don’t divide Europe according to countries but rather decompose it into growth regions. Countries and regions should be analysed separately.
2. Build an effective regional set-up: When a company approaches markets by region, it's able to quickly respond to changes in the market.
Danish business daily Børsen to participate in a discussion on growth opportunities in Europe. The stances represented in the panel were somewhat fragmented. Most could agree that there are several unexploited opportunities in Europe which companies are missing out on, but how to seize them was up for debate. Do you try to beat the guy next door by gaining market share in your current strongholds, or do you go for breaking new grounds by growing in unfamiliar territory? Beating the guy next door
“We don’t focus on new markets, but exclusively on how to gain market share in the European markets where we’re already present”, says Søren Schriver, CEO of Hummel. “Growth to me is about beating the closest competitor. If we’re able to do so there will always be opportunities for growth”. Adapting to new markets
Icopal, a manufacturer of roofing and other building materials, has turned its focus to Eastern Europe. “We’re forced to face a new reality. We produce quality products with a durability of up to 30 years. But if we adjust the quality to a durability of only 10 years, the Eastern Europeans can afford to buy the products today. In these difficult times, it’s essential for us to adapt faster to cope with the demand”, explains Miguel Kohlmann, CEO of Icopal. Get moving
Companies have become more risk averse and consider their moves in Europe carefully. According to Søren Sørensen, Group Executive Vice President of Grundfos,
3. Incorporate macroeconomic perspectives into your strategy: Companies need to find new sources of information, enabling them to identify, understand and attack the right regions in Europe.
4. Go shopping: In countries struck by crisis, there are plenty of interesting companies to be acquired at a good price. Exploit this opportunity.
companies ought to get moving. “We’re not giving up on Europe, and we’re focusing on gaining market share. But we recognise that we have to rethink our go-to-market approach”, says Søren Sørensen and urges other companies to do the same. SUCCESS LIES IN REGIONS
“We’re not giving up on Europe, and we’re focusing on GAINING market SHARE. But we recognise that we have to RETHINK our go-tomarket approach”
According to partner in Quartz+Co, Anders Bruhn, “Danish companies put the wrong effort into accessing low-potential and lowgrowth areas by targeting entire countries. Companies Søren Sørensen, Group Executive should adopt a focused reVice President of Grundfos gional approach to capture potential markets”. Countries suffering from budget deficits and recession often contain regions with growth. Numbers from OECD reveal that the 10 biggest regions constitute about a third of the total economy ONLY 20% OF THE RESPONDENTS CONSIDER in the European countries. Among these GROWTH POCKETS AS GEOGRAPHIC AREAS, LEAVING POTENTIAL IN REGIONAL GROWTH regions are the areas around the cities of POCKETS UNTAPPED Paris, Düsseldorf, Stuttgart, Milan, Madrid and London. In these areas, the economy Respondents consider growth pockets is stable and growing. “Quartz+Co’s survey according to different criteria shows that half of the companies don’t try to exploit the opportunities in these growing regions, but rather look at whole countries. No 68% No 80% With this in mind, European companies should make sure not to leave the contracts for the Chinese or the Americans to sign”, Yes 20% says Anders Bruhn. Yes 32%
GEOGRAPHIC AREAS
PRICE NICHE
No 73% Yes 55% Yes 27% No 45% JAN JOHAN KÛHL Managing Partner of Polaris Private Equity
BIRGIT NØRGAARD Board member at DSV and Lindab
SØREN SØRENSEN Group Executive Vice President of Grundfos
MIGUEL KOHLMANN CEO of Icopal
INDUSTRY
PRODUCT NICHE