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75 be achieved by conducting on sight observations, as well as including more participants in the research.
As it is valid to classify local microbreweries around Copenhagen as a cluster, the following step was the determination of its cluster power. The gathered data was therefore cross referenced with the determining factors of cluster power set by Rosenfeld (2007). Out of the 12 set
requirements, the Copenhagen microbrewery cluster evidently supports 10 fully and two partially.
Especially strong is the cluster in the aspect of networking. During this research I found multiple evidence of regular cooperation amongst the local microbreweries, with the goal of sharing
knowledge, experience different business strategies as well as learning aspects. This aspect of joint effort increases the cluster power by a great margin. The goal of collaboration in the
microbrewery industry, are the development of beer quality as well as styles. Similar findings were made by A. D. Alonso et. al (2017) In his research on the “Collaboration and the Emerging Craft Brewing Industry”. He points out the four main factors of collaborations in between craft beer breweries, being quality improvement, increase the basic knowledge about beer recipes and equipment, increase the knowledge about the operations of fellow breweries and increasing the number of styles of beers (A. D. Alonso et. al 2017). It can therefore be argued that the intensity of networks especially in terms of collaborations, is a common phenomenon amongst microbrewery clusters.
A further especially powerful aspect of the Copenhagen microbrewery cluster is the social infrastructure. Copenhagen offers the microbrewery industry a multitude of potential customers in form of bars and bottle shops. The data shows multiple evidence of friendly engagements with the local customers. The weakness of the cluster is mainly the proximity of suppliers. Whilst malt as well as brewery equipment in form of tanks, is readily available on the Danish market, most of the packaging equipment, as well as raw materials such as hops, and yeast are sourced foreign. To what extent this can be justified as a weakness of the cluster is debatable. As F. Hagos et. al.
(2008) points out the supplier proximity as a source of power can be next to neglected due to the globalized world, we live in. The important aspect is a close relationship (F. Hagos et. al., 2008).
The gathered data showed evidence of multiple close relations toward their suppliers and the importance of the close relationship on the industry. A further aspect, according to Rosenfeld (2007) potentially weakening the cluster is the R&D capacity. In the data no evidence was found
76 on dedicated research facilities. Whilst the Carlsberg group evidentially conducts research in context of the brewing industry in Copenhagen, information on the connection, as well as access to their findings was vague in the gathered data. Whilst this is a potential factor weakening the cluster according to Rosenfeld (2007) it is to acknowledge, that dedicated R&D facilities are very capital intensive. Throughout the analysis it became evident, that the Copenhagen microbrewery cluster is lacking these financial capabilities and must therefore rely on third party innovations.
Looking at all determining factors, laid out by Rosenfeld (2007) to determine the cluster power, It is to say that the Copenhagen cluster should be categorized as powerful.
In terms of social capital, the main challenge for the entrepreneur is the establishment of relations and networks. Key factors in those are for once a good knowledge of the local industry, as well as a clear targeting strategy. As it became evident, a good family like relationship is a common occurrence in the local microbrewery industry of Copenhagen. In terms of targeting the right firms at the right time, it became clear that a main goal must be established previous the network establishment to the firm. Furthermore, it is on the entrepreneur to evaluate if a network is worth while maintaining.
Throughout the research it became clear that the Copenhagen microbrewery cluster, sources a multitude of resources internationally. The notion by H. C. Moon et. al. (1995), that Porters
diamond model on the local environment would not hold up was evident in the Danish industry of microbreweries. Being one of the smaller economies in the global market environment, industries in smaller economies must turn to the global market to stay competitive. Therefore, the double diamond approach considering global as well as local aspect was a valid approach, in researching the Copenhagen microbrewery cluster (H. C. Moon et. al., 1995). In terms of the local demand for beers produces by microbreweries, there was multiple evidence of an increase in the local
demand. As a reason for the increasing demand, there is for one the spread of knowledge about craft beer in the Danish market, pioneered by Mikkeller, as well as an increasing demand for specialized products. Additional evidence of an increase in the demand for microbrews, is the increase in beer bars as well as bottle stores. The local microbreweries, around Copenhagen take a big part in serving this demand. By producing premium quality products, as well as experimental innovation, Copenhagen became an attractive location in the microbrewery industry. An increase
77 in demand by the local population further nurtures the development of the industry, with an increasing demand of quality and innovation towards the microbreweries. Whilst this increase, is evident on a local scale, there is evidence of it being a global phenomenon. Looking at the
European market, the “Brewers of Europe” statistic presents next to an increase in Danish microbreweries, an overall increase of microbreweries in the European market. Whilst there is evidence, that the global market is not relevant for new and upcoming breweries, and the smaller local market size is considered sufficient, the data showed evidence that the international demand satisfaction is connected to the growth potential of a microbrewery due to the small Danish market. These finding support the notion by H. C. Moon et. al (1995) that global activities are needed in smaller economies. In terms of factor conditions, the findings showed strong limitations in context of the local aspect. Whilst certain raw materials as well as brewing equipment are readily available in the Danish market the majority is sourced globally. Reasons for the global sourcing are evident as patent rights, the growth environment of raw materials, as well as lower pricing. It became evident as well that major breweries such as the Carlsberg group, support the local microbrewery cluster, by providing access to advanced process equipment to the
microbreweries. Once more the findings support H. C. Moons et. al (1995) criticism of the original diamond model by M. Porter (1998). Whilst all materials for the daily operations of
microbreweries might be accessible in larger economies, such as the United States, the notion of gaining a competitive edge through local factor condition doesn’t hold up for the microbrewery cluster in the Copenhagen area. In terms of local Firm Strategy, Structure and Rivalry, the
presented data showed an easy registration process of new firms, which can be conducted online.
Next to a multitude of different entity registration possibilities, the data showed as well Supporting programs for new entrepreneurs, such as IVS. In terms of firm structure, the data provided evidence of a hierarchical structure, with the underlying notion of mutual respect. In multiple instances, the data showed even family or friend like behavior amongst workers in the microbrewery industry, that in certain instances even exceed beyond the work level. Whilst local rivalries exist, the microbrewery cluster around Copenhagen, see competition as a source of mutual success. Through rivalry amongst cluster participant, new innovations and creations enter the market. Through sharing of knowledge in form of collaboration or general exchange, these strengthen the cluster by profiting all participants.
78 In terms of global strategy, the data supports P. Maskells (2013) notion of establishing “Pipelines”.
By establishing and maintaining networks towards suppliers of raw materials, such as hops and yeast, as well as the maintenance of these networks, the local microbrewery industry guarantees the supply of those. In context of P. Maskell (2013) theory on problem solution, the Copenhagen microbrewery cluster is one example of this approach. Knowing the problem, in the case of this research the local lack of raw materials needed, as well as the solution, in context of foreign suppliers of this resource, a connection amongst this firm is established. Strengthened is this notion by the data in terms of finding the right supplier. Here the presented data showed evidence of information exchange amongst cluster participants in context of their supplier choice. Maskell (2013) states in this matter, that an unclear problem solution in terms of a target firm is the case, the firm engages in sourcing. Whilst this is just one example, the presented data showed evidence in establishing “Piplines” to foreign sources of knowledge. In this research it became evident, that it is common to target specific firms in terms of collaboration or engagement in context of their mutual learning potential on a global scale. Furthermore, P. Maskells (2013) take on low problem awareness, as well as low source solution resulting in the participation of trade fairs. As it became evident during this research, the participation at beer festivals on a global scale is a great source of knowledge in terms of new trends as well as unique flavors. Furthermore, the participation in these lead to general contact exchanges as well as potential collaborations in the future.
In terms of local related and supporting industries, multiple could be found in this research. Whilst the local availability of related and supporting industries differ from nation to nation, such as the dependency on distribution as well as water, and close buyer proximity in the research presented by Dennet and Page (2017) in their research on the London brewery cluster. In a similar manner, Copenhagen hosts a multitude of bars and bottle stores, making the customer proximity evident.
Furthermore, the danish malt industry and their supply to the Copenhagen microbrewery cluster, are part of the related local industries. In terms of equipment, the Danish steal industry allows for easy access in terms of brewing equipment such as custom-made Brewing plants. Whilst the relation between the cluster and Carlsberg´s research operation could not be proven in this research; the existence is to mention in this context. As I referred to previous in this section.
Multiple raw materials are sourced on a global scale, due to their unavailability in the Danish market. Whilst multiple ties toward foreign firms could be uncovered during this research, the
79 relation to local as well as foreign related industry was described, as an important factor by all research participants. This notion is underlining the statement by F. Hagos et. al. (2018), that a close relationship towards supporting industries is from greater importance than their proximity.
Whilst a close industry is an attractive aspect, they are from little importance in determining the firm’s success, due to the easy world wide access in this globalized society (F. Hagos et. al., 2018).
The data therefore showed two aspects of the internationalization process. For one there is the entering of the global market. As it was outlined previously, the internationalization process was deemed a necessity by microbreweries of the Copenhagen cluster, with the impact on the local growth potential. The second aspect is the internationalization process of accessing foreign resources. Whilst entering the international market in a competitive manner is correlated by the size and output of the firm, the internationalization in form of foreign resources is a necessity involving all cluster participants. As it became evident on multiple instances, cluster activities are influencing this form of internationalization to a high degree. For one to mention it became evident that foreign suppliers are chosen by research of the individual firm, but to a more significant degree by experience sharing amongst cluster participants. This cycle impacts the cluster in the way that new innovations as well as newly developed resources are constantly entering the cluster. The sharing of experience in this context, further eases the implementation process.
Whilst the aspect of governmental influence and chance weren’t originally included in Porters (1998) diamond model evidence of their importance was uncovered during this research.
Governmental regulations in form of tax reliefs as well as support during the foundation process, are determining factors in the economic operations of the microbrewery cluster of Copenhagen making the location further attractive. Whilst the notion chance factors seem to be farfetched at first glance, the recent Covid-19 pandemic showed unexpected forces, not able to be influenced by the industry. Especially in the B2C sector, the data showed evidence of the restructuring process of cluster participants.
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