Customer analysis

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Instead of prioritizing the individual customer analyses, the author believes the response from Erik Joergensen to question 3, in his interview in appendix 14, calls for a more emergent focus area;

HDG’s inability to get the attention of the key stakeholders in their largest potential customer’s organization.

11.3.2. B2B Purchasing analysis through the “Box” model⁷⁰

First and foremost, is it relevant to figure out, who are the key stakeholders or in other words the

“buying centre” of the target customers? Erik Joergensen describes, in his interview, that the key stakeholders in Vattenfall is located on the director level. HDG has so far, not been able to

successfully reach the key buying centre in their potential customers organizations. Therefore most sales meeting has been with lower-level purchasers, that has mainly, if not only, had price as a comparative factor in mind.

The below illustration is an author-amended/translated organizational decision-group model, inspired by an educational paper by Steen Ehlers, made on the background of Orla Nielsen’s box model:

Figure 8 - Source: “Efterspoergselsmodeller” by Steen Ehlers, CBS – based mainly on the work of Orla Nielsen and his box model.

70 The ”Box” model of B2B customer analysis is created by Orla Nielsen and used in his book “Organisationers koebsadfærd i grundtræk" written in collaboration with Ricky Wilkes. (Material from this has been sourced via an educational presentation from Steen Ehlers CBS)

Director &

Board level

• Strategic decisions

Production management

• Technical decisions

Purchaser level

• Commercial & Transactional decisions

Germany, main factor at this level is price)

HDG currently

Target level

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With Steen Ehlers being a lecturer at CBS and consultant for the author in writing this report, this source is deemed to be highly reliable.

HDG’s lack of ability in reaching the required decision level in Germany is believed to be a key contributor to the fact that HDG are currently only operating with export to their existing Danish customer base in their biomass energy division.⁷¹

The later introverted micro level analysis of HD/HDG and their strategic market management capabilities will highlight further how this trend can be reverted. However as a complimentary note on the above model, the author acknowledges a clear link to the statement by Niels Joergen

Pedersen in appendix 15, as he describes HDG’s international ventures’ growth ability, as typically being short-lived due to the market “saturating” from customers excluding HDG in their supply chain or integrating vertically. Again the author believes that by engaging with the correct strategic level of their customers organization, HDG/HD are less likely to be replaced in their customers supply chain.

If HDG can manage to reach the strategic and technical decision level, and convince these key stakeholders of the value that HDG can offer, will benefit their business, the below author-amended/translated model visually explains how the complexity of repeat and routine purchases will be reduced and hence the sales efforts will be reduced accordingly:

First time purchases Repeat purchases Routine purchases Strategic decision New activity budgeting Adhere to budget Adhere to budget Technical decision Product specifications

from budgeting

Boundaries of product specifications

Given/known product specifications

Commercial decision Offer comparison & negotiation according to given product specifications

Choice between existing suppliers

Transactional decision Contract and order execution Repeat order supply Table 6 - Source: “ibid. to above used model from Steen Ehlers

It has not been within the scope of this report to conduct a.e. qualitative interviews with key stakeholders in Vattenfall or RWE, but the author would advice for HD/HDG to draw on their

71 Postulation made by author, considering that earlier efforts have been made to reach this decision level, sadly without any luck so far.

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extensive experience with similar customers, such as DONG Energy in Denmark if no such data can be retrieved.

A final factor HD & HDG needs to appreciate in their attempts to reach a higher decision tier in their potential customer’s organization is the type of personality they will be faced with. This naturally varies from person to person, but the earlier used cultural mapping tool, created by Geert Hofstede, can help shed some light on the typical national and organizational culture that dominates the German customers compared to their Danish counterparts:

Figure 9 - Source: The Hofstede centre “country comparison tool”; http://geert-hofstede.com/denmark.html Gert Hofstede’s cultural mapping tool is a very commonly used tool in explaining cultural differences in IB economy

theories, and the reliability is therefore valued to be high. The validity of the usage of this model, is deemed highly valid, with the below conclusion in mind.

Apart from the earlier explained difference in uncertainty avoidance, which in a case of communicating with German customers, might reveal itself in the classic prejudiced quote on German culture:

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“Ordnung muss sein”⁷²

By relating to this quote, the author is attempting to get across the message that HDG must ensure that all parts of their service is clearly illustrated and explained in a sales meeting, so that no doubts to the responsibilities of the various processes are left coincidental.

The large difference in masculinity vs. femininity also calls for a non emotional & factually based sales pitch, which keeps focus on technical specifications and potential product superiority from a factual perspective. Therefore reaching the technical decision tier in a target customer’s organization is valued to be of upmost importance for HD & HDG when operating in Germany.